One man in South Carolina buying and selling real estate foreclosures by the dozen
Yesterday, we blogged about the problems in the sub-prime mortgage market and the effect those problems would have on home prices. This is not good news for homeowners currently thinking of selling their properties. They’re probably not going to get the price they hoped they would.
Today’s Wall Street Journal has
an article about one man, James Odell Barnes, who buys foreclosures from lenders eager to unload their delinquent properties. In a recent acquisition, he bought 12 homes for $35,000. We’re not talking Manhattan real estate here. Barnes and his 40 or so investors then turn around and find buyers for the houses. They don’t fix them up preferring to unload them as quickly as possible. The buyers repay the loans over 15 years. The interest rate charged is 12 percent with monthly payments slightly less than what they’d pay for rental accommodation. Steep for anyone with good credit, but for those that can’t get a mortgage, this is their only way to buy a home.
How does Barnes make money?
For every deal he passes on to his investors, he receives $1,000 for his trouble. Last year he referred over 1,400 homes earning more than $1 million in fees. For some, there’s a silver lining in this sub-prime meltdown.