Monday, November 13, 2006

Multifamily REO's In Colorado

The Denver Post reports from Colorado. "Homeowners aren't the only ones having problems paying mortgage loans. Some investors in Colorado have also had rental properties foreclosed upon recently, especially in and around Longmont and Greeley, where there's a big rental market, some Realtors say."

"Recent 'for sale' listings show at least 10 duplex and apartment buildings owned by banks and on the market in Longmont."

"'(Investors) thought they were going to make a fast buck, and they got caught, because the housing economy goes in cycles,' said Lynn Bishop, a spokeswoman for the Colorado Mortgage Lenders Association. 'You're going to 'walk' on it if you can't find a renter.'"

"If an investor with renters faces foreclosure, those renters are forced to move when a bank takes over, said Bryan Potter, a property manager at Alert Realty in Longmont with more than 2,000 rental properties. Potter said he has seen such cases two or three times in the past six months."

"If rental properties go into foreclosure, it's usually because investors have taken on interest-only mortgages with high monthly payments, said Lu Etta Legler, a Realtor in Brighton who also owns investment property. Investors who manage to find good renters still have to plan for a softer market and potential vacancies. For example, a rental home Legler owns in Greeley that used to take in $1,000 per month now reaps only $800 per month, she said."

"'A lot of people in this market say, 'This is the time to buy and rent it out and it will make my mortgage payment for me.' But they don't plan for vacancies,' Legler said. 'You have to plan for at least four months.'"


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