Foreclosed real estate being off loaded

Representatives of large institutions and even lone investors are standing outside US courthouses every morning and snapping up foreclosed property bargains as banks accept 'silly' offers.

As the crisis in US property continues it is possible to approach bankers who have bought houses via the courts and are eager to offload them there and then.

All it needs is a bit of knowledge and the ability to get up early, according to one businessman who has bought four houses out of foreclosure in the last ten months two of which he has then sold for a quick $453,000 profit.

'The secret is to see it as a purely business transaction. I've seen plenty of investors go under because they fall in love with a house. I work strictly by numbers,' said Kirk Leipzig of Nashville, Tennessee.

He does a lot of research on local prices and uses a monthly subscription to a listing service to compare prices on speed dial. 'If you know your area and do your research a head of time, you won't lose money, there are silly prices out there' he said.

His other properties he is looking to rent out as rental demand has increased. But you'll still see him outside the courthouses looking for more. 'The banks don't want to be bothered with selling so many properties so you can get them for a lot less by offering direct Half the houses I look at you can get for 40 to 50 cents on the dollar of the pre-foreclosure selling price. But banks are starting to think let's just get rid of it for less,' he added.

An estimated 3 million homes are expected to go into foreclosure in the US this year. Big institutions are buying them in bulk. The Blackstone Group, a US private equity group, has raised $11 billion to buy distressed property. A private equity consortium bought 8,500 properties in April from builder Centex Homes for $161 million, which was a mere 30% of their book value.

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