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Foreclosure buyers are now more likely to be
individuals purchasing a handful of homes each
year rather than institutions scooping up dozens of
properties each month, and that broader pool of buyers
is ensuring a steady demand for distressed properties,
even in stormy markets.
"Forty years as an owner-occupant; one
year as an investor," said Houston-based Alan
Goodwin, describing his experience in real
estate. Goodwin purchased his first investment
property—a bank-owned home—via an online
auction on Auction.com in 2019. He just
closed on a second investment home in late
March. "I am a flipper, trying to add a greater
than 15% return to my retirement funds."
Goodwin is typical of most real estate
investors purchasing at foreclosure auction or
online bank-owned (REO) auction, according
to an Auction.com buyer survey conducted
in February. More than half (54%) of survey
respondents said they purchased one or two
properties in 2019 while an additional 22%
said they purchased between three and five
properties during the year.
e share of buyers who said they purchase
fewer than five investment properties a year
has jumped dramatically even over the past
year, from 51% in a similar Auction.com buyer
survey conducted in June 2019 to 76% in the
February 2020 survey.
"Five to 10 years ago, the dominant buyer
at foreclosure auction or online REO auction
was the institutional investor with ample access
to large amounts of capital," said Ali Haralson,
Chief Business Development Officer at
Auction.com. "Auction.com has democratized
the distressed property marketplace with
innovative marketing and state-of-the-art sales
technology, empowering smaller investors to
compete—and often win—in this arena."
THE
DEMOCRATIZATION
OF DISTRESSED
PROPERTY BUYERS
Feature By: Daren Blomquist
