Where Are The Deals? Look For Vacant Properties

For a good five years there was a steady source of good deals. Short sales and foreclosures made up more than half the listings. Those short sales and bank owned properties are no longer driving the market in South Florida. They haven't for a couple of years now. At one time distressed property sales were at least 75% of my business. Now it's almost zero. Buyers still want a deal but where can you find them in today's market?

I would consider any vacant property a target for an aggressive offer and a potential good deal. These empty homes are costing the owners money every day and they should be the most motivated to sell. Even if they don't appear to be. Best of all they may not be in need of expensive repairs like the foreclosures typical were. 

A home may be vacant of any number of reasons.

• The owners have bought a new home already.
• The property is being flipped.
• The owners were transferred out of the area by their employer.
• The owner past away - Estate Sale
• The home was a vacation home and not the primary residence.

A vacant home has carrying costs the owners must contend with, such as: 

• Insurance
• Mortgage payments
• Property taxes
• HOA Fees
• Utilities
• Maintenance - Lawn, pool, repairs

On a home with a market value of $500,000 the carrying costs could be as much as $3000 per month. Even if they own the home outright and don't have a mortgage, the equity could be making them a better return elsewhere. This is known as an opportunity cost. A home that is being flipped (fixed up and resold), often have very high interest loans on them. The carrying costs in this case can be even higher.

There are very few homes that are listed right now with prices that look like a real deal. We aren't really in a true sellers market right now, but conditions are slightly in favor of the seller.  I have said it before, buyers have to make the deals themselves and not be shy about making offers. Right now I think the best opportunities are those vacant properties. Do you think that someone that has bought their new home already is seriously motivated? What about the flipper paying 10% interest or more. They may not show it with their asking price, but I bet you they really want to sell.

Searching for listings on the major real estate web sites can be difficult. Some will be obvious because the photos show no furniture. It isn't unusual for owners to move out after the photos have been taken though. So just searching visually isn't very accurate. Those sites won't let you filter out the occupied homes either. The MLS will and it is far more accurate. Send me a request for vacant homes and I will make sure you see the deals as they come on the market.

If your number one priority is getting a good price, seek out these hidden opportunities. 

Related:

Buying a Vacation Rental in South Florida

Buying a Pompano Beach Waterfront Home