The Obama administration may be close to approving a pilot program to sell government-owned foreclosures in bulk, according to the research group The Wall Street Fraud Watchdog.
The group, which provides investors with due diligence assessments, predicted this move months ago, because Fannie Mae is not in a good position to become landlord to its expansive REO inventory.
However, private investors taking on the task will not only need to know exactly what they are doing, they will also have to be fully aware of the minefields awaiting them, before they throw down big on a Fannie Mae or Freddie Mac REO portfolio.
One suggestion the group offers investors interesting in purchasing the properties should they come up for bulk sale is to discount the Fannie Mae offering by ten percent, because that is the number it has pegged for residential real estate market devaluations for the U.S. in 2012.
Investors also are warned to tread carefully, obtain due diligence, and avoid some of the known risks with these properties. For instance, in Florida, Alabama, Mississippi, Louisiana, Southeast Texas, and Virginia, investors had better know everything there is to know about toxic Chinese drywall, which is said to cause fumes that smell like sulfur, and even corrode electrical components. Fannie Mae has been selling these foreclosed properties marked “AS IS” but with no other disclaimers, according to the group.
“Not only can we do the due diligence, but we can also prepare a fair market rental rate estimate for each home, that includes a market absorption calculation, along with an annual budget for each property in portfolio. In addition we can advise the investor what areas of the country to go for, and what areas to avoid, based on our sense of future appreciation, rental appreciation potential, and we can even set up an extremely transparent management structure, to manage, maintain, and keep the properties rented,” says a spokesperson.
For more information investors are always welcome to contact the Wall Street Fraud Watchdog at 866-714-6466, or they can contact the group via its web site at http://WallStreetFraudWatchdog.Com.
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