The latest real estate ploy in South Florida: buying titles to homes from community association foreclosures, the Palm Beach Post reported. Savvy investors are nabbing the properties for only a few thousand dollars owed in unpaid home owners’ asscociation fees and then renting them out until the bank forecloses — a process which can take years. And while tenants may get quite a surprise when their landlord changes with no notice, the practice appears legal, experts told the Post. Tenants legally do not have to be informed about the bank foreclosure or community association foreclosure proceedings.
“We’ve seen some very creative ways for people to make money in this downturn,” Jack McCabe, chief executive of McCabe Research & Consulting, a residential real estate analytics company based in Deerfield Beach, told the Post. “Some ways have been illegal, some have been shady, and some have operated in a gray area, but they’ve all been creative.”
But investors buying the properties are gambling on a long bank foreclosure procedure, and may not always win that bet.
“There are a couple of different ways to play the game,” Delray Beach-based attorney David Kupperman told the Post. “It requires knowledge and experience, but I can tell you that, from the investor’s experience, it does work.” [Palm Beach Post] –Guelda Voien