LOCAL REAL ESTATE Q&A: Distressed property sales in Mesa County are dropping | PostIndependent.com
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LOCAL REAL ESTATE Q&A: Distressed property sales in Mesa County are dropping

Q: My boss bought a HUD home a year ago and suggested that might be a good way for me to get into owning rental property, too. I went to look on the http://www.HUDHomeStore.com where he found the property he bought but there were only 16 properties for sale. How can I buy an inexpensive future rental if that is all there are for properties?

A: That is a very interesting situation — the small number of HUD homes on the market in Mesa County. I cross-checked your web research and sure enough, I came up with the same number of active listings.



Two other sources of properties that may be good value for the price are short sales or bank-owned properties, known as REOs for “Real Estate Owned.” I say these may be good value because oftentimes the owner of a home that is being sold as a short sale, where there are not enough proceeds from the sale to pay off the loan, will not have maintained it in good condition.

As for REOs, they are often sold in “as-is” condition in which case the price may be lower than the price on that privately-owned home for sale down the street. It seems though more and more often banks are having the listing Realtor price those properties like any other privately-owned home in the same neighborhood. In some cases, the bank is even putting money into the house before listing it for sale by doing improvements like interior painting and carpet/flooring replacement.



There has been a lot of sales activities in all these home categories this year. Right now, as of this writing, along with the 16 HUDs, there are 38 REOs and 36 short-sale properties actively for sale. Those numbers are still so low that you and other potential investors do not have many of these “perceived bargain” properties to choose from.

A closer look at market statistics reveals that 47 HUD, 26 REO properties and 42 short sales are currently under contract. Short sales come on the market when a private property owner decides it is time for them to sell, so there is not real control over how many of those come up for sale in a period of time.

HUD and REO properties coming on the market are controlled by the decisions of those two national level property owners. By scouring neighborhoods you can see REO and HUD paperwork taped to many front doors, and those institutional property owners might seem to be missing out on sales right now by not having more of their properties on the market for potential buyers like you to choose from.

Year to date there have been 210 HUD home sales, 73 REO properties and 73 short sales in 2013. During those same nine months in 2012, the sales were 119, 322 and 60 for the three property types. If my count is correct, those sales total to 354 this year-to-date and 501 for the same nine months of 2012.

Based on these numbers, there have been about 29% less distressed property sales this year than last. That may not be good news for your investment strategy but it may be good news for the many Grand Valley residents who have been waiting for the distressed property supply to dry up so they may be able to get a higher price for their own property sales.

Properties listed for sale by Realtors are a direct way to look for investment properties; though as you first noted, there are few on the market now. With more work and possibly even more risk on your part you can try purchasing property at the weekly Public Trustee’s auction. This month the Mesa County Treasurer’s office will announce which properties have not had taxes paid current on them. It is a long shot but you could knock on some of those doors and see if the delinquent-on-taxes property owner may also want out of the house, enabling you to craft a good deal with them.

The Treasurer’s office website is http://treasurer.mesacounty.us/taxlien/treasurer-tax-lien-sales.aspx and the Public Trustee sale information can be found at http://www.mesacounty.us/publictrustee/.

Doug Van Etten is a local Realtor with Keller Williams Realty. He has been helping buyers, sellers and investors achieve their real estate goals for more than 20 years. For more information on investing and investment properties, consider joining the Real Estate Investors Network (REIN), http://www.REINWesCO.org and read Van Etten’s blog http://www.GJRealEstateAdvice.com.


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