A distressed property is the one that can no longer be maintained (either financially or physically) by its owner for any reason. In the world of real estate investing, distressed properties represent the homes for which owners have been unable to keep up the mortgage and now are at the risk of foreclosure. While some properties are found in a bad condition due to negligence or any other reasons.
Distressed properties are often good investment opportunities as they increase the profit margin and have less competition. We, at National Wealth Builders, train a team of apprentices to identify, locate, and secure off-market and undervalued properties that need light to heavy renovation. We then purchase these properties and renovate the entire look to sell them on market prices to earn a healthy profit.
The Majority of the real estate investors are unaware of the ways to find out and secure the distressed properties. Hence, we have pulled up our socks to help you in this regard and made a list of important tips to identify the best undervalued and neglected properties.
- Properties with delinquent mortgage payments: Properties with delinquent mortgage payments represent the epitome of being distressed. The owners who want to avoid foreclosure and financial woes may be willing to sell it at a discount price.
- Properties with delinquent taxes: Homeowners with delinquent taxes depict that they are in financial trouble. These taxes are public records and you should search for it quite regularly. You can reach out to them and can make a decent offer.
- Properties of bankrupted owners: The properties of bankrupted owners are auctioned with prior notice and a savvy investor will never miss this chance.
- Out of state owners’ properties: The owners who are currently living out of state are most likely to sell their properties and might be unaware of the current market trends.
- Bank/Govt. owned properties: It shows that the property is already repossessed by the lender and lenders usually want to get rid of non-performing assets.
- Neglected properties: The properties that are neglected by owners depict that the owner either is losing his interest in that building or is not financially stable and might be planning to sell it.
- Properties in probate: The probate properties that are left due to any significant event in the life of the owner (death or divorce), represents an opportunity for real estate investors.
Though this list goes a long way, but a savvy investor will keep an eye on the possible opportunities and won’t miss any chance to grab the profit-maximizing chance.