Close to 700 Florida Foreclosures Sold to Investor
Recently, a San Diego company and the Federal Housing Finance Agency combined forces to purchase 699 Florida foreclosures. The bulk deal included $12.3 million in cash, and Pacific Companies is the first in a new program that was established to reduce the shadow of foreclosure inventory. Blocks of properties are being sold off to private investors who are expected to keep the homes as rentals for an undisclosed period of time before they are able to sell them.
Florida sold off three tranches of homes, 376 of which were located in the Southeast. They were repossessed and owned by Fannie Mae, who will receive the $12.3 million cash in addition to 90% of the proceeds from the homes until a $49.3 million cap is reached. After that point, Fannie Mae and Pacific Properties will share the proceeds. Pacifica will benefit from 20% of all gross rental income as a management fee for overseeing the daily operations of the rentals. Fannie Mae stands to make an estimated $78.1 million off the transaction.
According to a summary of the deal, “the transaction is designed to promote home price stability, improve quality of housing stock and enhance rental inventory of markets by utilizing a rent-and-hold strategy.” This new program is being offered round the country, and currently, there are approximately 2,490 Fannie Mae-owned homes that are included in bulk sales to investors. Many of the other properties are located in Arizona, California, Illinois, and Nevada.
Unfortunately, a similar grouping of homes in Atlanta could not warrant a high enough bid. Those homes will likely be repackaged or sold individually through the government’s traditional foreclosure process or the website www.homepath.com.
Some Florida realtors are not thrilled with the new program, saying it’s eliminating inventory in high-interest areas where the supply of homes is already low.
In fact, in Palm Beach County alone, there were 43% fewer single-family homes on the market than at the same time last year and 50% fewer than 2010. Around Florida, there is about a five-month supply of homes, or approximately 100,657 single-family homes for sale, which is 41% below 2011. Still, some believe that private investors are in a better position to handle distressed properties.
Pacifica Companies is not currently commenting on the deal, however, they have been in business since 1978 and are a real estate development firm that owns and manages hotels in housing communities around the U.S., in Mexico, and India. All signs point to their capability when it comes to handling these assets, and the hope is that this will set Florida real estate back on a successful course.
If you’re interested in learning more about Palm Beach short sales, please contact our team of short sale real estate experts here at Palm Beach Premier Real Estate.