MANATEE — Anne Melton is looking to buy, renovate and rent out two foreclosed duplexes, but she’s not your typical real-estate investor.
She’s in the market on behalf of Family Resources Inc., a nonprofit group of which she is executive director. Armed with a $400,000 grant from the federal Neighborhood Stabilization Program, the agency hopes to buy the duplexes and rent them to young adults transitioning out of the foster-care system.
But its search has been fruitless so far.
“There are a lot of properties out there, and nothing I’ve seen that I thought was just right for us,” Melton said.
Officials of other agencies participating in the federal program echo her predicament.
Despite the glut of foreclosures on the market, they say they’re having difficulty finding suitable properties to buy, rehabilitate and then sell or rent to qualified low-income people. They say they’re being outbid by investors who are snapping up foreclosed homes, especially at the lower end of the price spectrum.
“There’s a lot of availability, but it’s difficult because there’s multiple bids and we’re not an immediate cash buyer,” said Laura Taylor, project manager for Goodwill Industries’ GoodHomes Manasota program, which also is participating in the federal program. “We’ve lost some nice places to investors.”
Other cities that implemented their programs earlier — including Orlando and Phoenix — have encountered similar problems, according to news reports.
Investors grabbing best
The investor influx has left slimmer pickings for the local programs, which already are constrained by limited funding, tight spending deadlines and restrictions on where the money can be spent.
“We’re seeing the investors and first-time homebuyers picking the choice properties, which means we’ll probably be looking at the second or lower tier,” said Suzie Dobbs, the county’s community development manager.
That could limit how many local homes are ultimately bought through the program, which awarded $5.28 million to the county, distributing it among several nonprofit agencies, and $2.57 million to Bradenton, which is implementing its own program.
Neither the city nor the agencies likely will be able to engage in protracted bidding wars, as the federal program limits how much they can offer for a property. And while passed-over homes might be less expensive to buy, they also might be in worse shape and require more money to repair.
Taylor said GoodHomes Manasota has passed on a few prospective purchases because the rehabilitation costs were prohibitive.
As a result, local officials are setting modest goals for their programs.
“We’ll probably find the choice foreclosed properties snapped up by investors,” said Tom Cookingham, Bradenton’s deputy director of planning and community development. “We figured we probably would be in that situation and, given our limited resources, we aimed for the low side in the number of units we want to do.”
Bradenton hopes to buy, fix up and resell as many as seven homes and already is in negotiations to buy one property, he said. Some of the money also will be used for down-payment assistance to buyers.
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