There’s always an up side in a down economy, whether it comes in the form of huge retail discounts or a great deal on a home. Fortune magazine’s latest issue includes this really interesting story about people who are buying up foreclosure properties. And no, it’s not just rich folks who are making incredible deals in my hometown of Phoenix, which has been hit hard by declining property values after a decade of too-good-to-be-true increases.
Pompay’s partner, Derek Turner – one of half-a-dozen lenders, brokers, investors, and contractors along for the tour today in Pompay’s rented limousine – wants to buy this place. The bank lists it for $92,900. He thinks he can get it for, “like, 30, 35 thousand,” or slightly less than he paid not long ago for a nearly identical bungalow next door.
“This is basically what our template is,” Turner says, leading me through the one he bought. “We come in, we just paint, put in a new baseboard, put in raised-panel doors instead of those flat-panel doors. These old windows, they’re single-pane, so we just replace all the broken glass, polish up the steel, paint ’em up, make it clean. And then the floor and new cabinets and stuff.” He’ll accomplish all that for about $12,000 – “That’s with landscaping and everything” – and then he’ll put the property back on the market and try to sell it for $80,000. Already he has two potential buyers lined up.
