Nowadays, looking for great bargains in the real estate market is relatively easy. With lots of distressed properties up for grabs in many parts of the country, a real estate investor doesn’t have to look far just to find an investment property that can bring him huge profits.
In a nutshell, a distressed home is a property that is undergoing foreclosure or is advertised for sale by its mortgagee. Such a real estate is usually in a bad condition because most owners of distressed houses are experiencing financial difficulties. But despite the problems attached to these houses, many real estate investors are itching to get their hands on distressed properties because of their low, low prices.
Before you buy a distressed home, however, you have to be sure that you’re betting your money on the right property. You have to be careful when investing in houses facing or currently undergoing foreclosures because there are some deals that are too good to be true.
Here are some tips that you should consider when buying distressed properties:
- Common sense dictates that you should never buy a house, distressed or otherwise, without taking a good look at it first. If you don’t want to regret your decision to buy a distressed property, see to it that you have researched everything there is to know about the house. Don’t be afraid to spend about $100 to $500 for the home inspection because it can prevent you from making a $100,000 mistake.
- Don’t rely solely on the words of the realtor. Find out how much the distressed home is really worth by running comps on the property, reviewing tax records, and finding out the selling price of similar houses.
- Determine the number of offers that a distressed property has received. Before you put your best foot forward, find out how many people are seeking to buy the same distressed home that you want and make an offer accordingly. If the property has received a number of bids, you might want to butter up your offer to convince the homeowner to sell you the property.
- Always do your numbers. If you feel that you won’t be able to get your expected return on investment, you should be prepared to walk away from the deal and find a better one.
Investing in distressed properties is a great way to build a real estate empire. However, you should be careful when buying such properties if you want to make the most of your real estate investing business. To find distressed homes in your area, meanwhile, go to www.RehabList.com.