Are you thinking about buying a distressed property?
Distressed properties could open your eyes to that dream fortune you've always wanted. But when you tell people you are planning on buying a damaged home, a lot of the responses you get are both positive and negative. Buying a distressed property in a prime area with an amazing price tag does seem tempting. If you are still doubtful in getting one, don’t worry! This is why we are here; Ready to give you all of our knowledge and experience from buying distressed properties from over the last 10 years. Please read some of our tips and tricks before discarding the idea completely.
Where can you find them
Typically a distressed property is put on the market when the homeowner is facing an auction and is unable to pay back the mortgagee the amount that he/she owes. The main thing about distressed properties is that to find them, it is a lot more challenging than what it seems; but with help of an experienced CDPS (Certified Distressed Property Specialist) who are not regular real-estate agents, it will make your life easier. Some of these properties might be ready for immediate purchase, while others may take some time to acquire.
The price tag
The first thing that catches your eye about a distressed property is that they are listed under market value for an appealing throw-away price tag since after all, most of these properties aren't in tip-top condition. So lenders and homeowners both are lurking the market for a proper buyer. One reason being that the lender wants to get a bad debt off their books and second that the homeowner wants to clear all his/her debt. Remarkably, its a win-win for everyone. You, the buyer, gets a property under market value; the lender gets to clear a bad debt and the homeowner walks away free and clear.
But in all of our years of buying distressed properties, not every deal that you find is a great one for you. The main thing when buying these types of properties is for you to do your research and get the help of a trusted and experienced CDPS or real estate company, to go through this whole deal without any hassle.
Owning in a prime location
Every real estate entrepreneurs, whether an amateur or veteran, goal is to own properties in prime locations in the city they are in. In New York, these places are typically Brooklyn, Queens, and Bronx, but they can usually be very harsh on your back pocket. In these top areas that you might be looking into, buying a distressed property rather than a new one, will benefit you in many ways, when trying to sell it in the near future.
Easier to negotiate
Distressed properties that are listed under pre-foreclosure, foreclosure, and short sales might have some type of damages. This benefits you when it comes to the price paid for these properties since you are able to negotiate some of the damage off of the purchase price when you approach the distressed owner. Since most of the owners try to get rid of the property as soon as possible, they might even agree for a price cut, for as much as 15% or more, but it all depends on how great your negotiation skills are.
Once you have your CDPS and a distressed property, you are still required to fill out paper work, which might delay the whole traction. Other than that, having someone trustworthy working with you to buy distressed properties, lets you leave all the complicated tasks to them and acquire the home right away. The main take away you should remember is that you need to be patient and educate yourself and work with professionals who can recognize the gross and the future value of property just by seeing it.
1. Is a Loan Modification the Right Option for You?
January 24, 2019
2. Our Tips Before Doing A Short Sale
January 7, 2019
3. Facing Foreclosure? Keep Clam and Know Your Options
November 30, 2018