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Look Out, Big Brother Is Coming To Town, And He Wants To Bully You Out Real Estate Investing!

Everyone loves a little bit of controversy, especially in the business of Real Estate investing.  Check out this recent bit of news, and let us know what you think. Quite frankly, I am all for the beautification and preservation of San Diego, but as a Real Estate investor, this concept is just a little too "big brother" for me. Read on, and let us know what your thoughts are. By the way, if you feel the same way as I do, there is only one thing investors can do about it: stick together and keep buying San Diego foreclosures and REO's, so that everyone can benefit from our efforts. Here goes: I came across an article in the San Diego Union Tribune that was very thought provoking. The article discussed some novel ways which cities were brainstorming to solve the problem of San Diego foreclosure and REO homes and the blight they create when they sit on the market. How will the City deal with rows and rows of San Diego foreclosures and REO homes lowering the value of homes near them and inviting squatters or worse. One solution being explored by the San Diego City-County Reinvestment Task Force is to create a regional bank. A new agency would be created that would buy up these San Diego foreclosure and REO homes before they became city blight or a speculators dream and instead create affordable housing.

The proposal was much more far reaching, but what intrigues me is the use of these homes to solve other growing problems, and how the same goals can be achieved one investor at a time, by individuals just like you.  Here's what they said:

"Form a regional land bank to buy foreclosed properties to create affordable buying opportunities while guarding against neighborhood blight. Purchased homes could be rented at affordable rates and later sold at affordable prices."

Wow! The idea of creating a bank using Government seed capital and private investment capital to buy foreclosed homes and fix them up for lower income people who have been priced out of the home markets in recent years and then sell these homes when the markets return is a total win for everyone. Variations of this such as rent to own for those who would like to get into the market at a later date when homes have reached price equilibrium is another great possibility.

Who Wins

1. The city that maintains vibrant neighborhoods rather that shuttered homes that are a blight, an invitation to crime and a potential health hazard

2. Real estate agents that see less property on the market

3. Rows of foreclosed homes can only lower the value of neighboring homes

4. Affordable housing is a community benefit

5. According to Task force member Robert F. Adelizzi, a retired banker and chair of the subcommittee that rafted the recommendations, this can be both profitable and socially beneficial.

 

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