By Richard Bleuze
The author has permitted the reprinting and redistribution of this article.
Distressed Property is defined as property that is either in a dilapidated state or is owned by someone who is facing financial hardships. With the housing market down and many people facing foreclosures, many investors are turning their attention to investing in Distressed Property. It should be noted that not all distressed sales are a good value, and those who are hunting for bargains should keep some very important points in mind.
When a house goes on the market advertised as distressed property, it will draw a lot of attention. Most people who are looking to buy this type of property usually buy it then sell it for a profit. The more people looking for distressed property for sale, the harder it is to actually purchase one. A serious buyer must be diligent about seeking out distressed property by scanning the Internet and newspapers to find out the circumstances behind the sale.
If you are lucky and are able to purchase a distressed property, you need to know or have an idea about where the housing market is headed and what the property values are in the area. When you own a distressed property, you will probably spend some money fixing it up. You want to be sure that the housing market is on the rise so that when you are ready to sell the property, you will recognize a profit. You must recognize that if the housing market is in a weak state, you may not make the money back that you invested.
You must also make sure that the home that you are purchasing doesn’t have liens placed on it that will become your burden. If the owner had problems paying the mortgage, he or she may have left other bills unpaid, so make sure you clarify this before you sign a contract.
It is always wise to use a realtor to help you identify deals for you. Searching the Internet is a good option, but some Internet information might be out-of-date or incorrect. A realtor will have an updated MLS listing that will give you the most current information available. Work closely with your realtor because with distressed properties, time is very important. A buyer must close on a date that is specified by an agency and can’t close after this date without facing stiff penalties. Make sure that your finances are in order so that your realtor can submit an offer as quickly as possible. Once the offer is submitted and accepted by the seller and you, the realtor will submit a ratified contract to the lender and closing agent to begin the process of the real estate transaction.
If you do plan on renovating and reselling the home immediately, make sure you keep detailed records of any expenses having to do with the purchase and repair of the property so that you can use them as tax deductions. And because the property is distressed or foreclosed, consider hiring a lawyer as your closing agent. A good real estate attorney will take care of any problems that may arise at the closing. And handle any special addendums or contracts that are issued by the bank.
Richard sells real estate in the San Gabriel Valley which is about 12 miles South of Los Angeles. For more information, visit his website at httpwww.westsangabrielvalleyrealestate.com
If you would like to take advantage of the market and learn how to invest in real estate and you are local to the Dallas Fort Worth area, I know a really great teacher and mentor here in Arlington Texas. Please take a look at his web site: DennisJHenson.com, Dennis has a great Mentoring and training program, I know because I am one of his former students. I learned a lot from his one on one teaching technique. – Michael Harman 817-457-7572 firstname.lastname@example.org>