Making Big Money With Distressed Properties
The term, "distressed properties" has always seemed rather amusing to me. It makes me think of a property that is sad or somewhat out of sorts, even lonely. When you think about it, a property cannot really be distressed. A house can be rundown and in need of repair, but that doesn't necessarily mean it's distressed. I know a lot of people who live in run-down properties and they're happy as can be to be living there.
When looking to make money in the fixer-upper type of properties, don't look for distressed properties; look for properties that are owned by distressed people. Then no matter what shape the property is in; you may very well get yourself a real bargain.
People may be distressed for one of many reasons. They may be distressed about their family situation, some neighbor they may not like, or their house may need some repair that they don't want to fix or pay to get fixed.
Maybe, you'll find some wacky negative thinking person who always supposes he is going to get the worst end of any deal. So, he will sell his property accordingly. In any of these situations, these people may be unloading what might be a diamond in the rough!
Once you find a property owned by a distressed person, chances are you can make a big profit with this property, whether it needs a lot of work or not. In a hot real estate market, any property that goes up for sale at a price below the going market rate won't last very long. The realtor himself may buy it and flip it in a hurry for a huge profit before you ever get to see it.
Finding a property for sale by owner is a better way to find a bargain. Here, the seller saves on realtor costs and may pass on this savings, at least in part, to you.
An even better situation would be if you could find a property through word-of-mouth. I know folks in the fix it up business that have fixed up and sold many properties. Many times, people who need to sell a property approach these professionals and ask them if they might want to make an offer for it. Many times these renovators do buy these properties, but other times they are just too busy to take on another house and the sellers end up listing the house with a realtor.
So, if you're looking for bargain properties to turn over and sell at a profit, and you keep missing out on the good deals, try to get to work with someone who is in the business of buying, repairing and selling properties. Approach him about a service you can provide for him. This is the best way to get started in this business and it gives you an inside track. It gives you the opportunity to see what's going on. You'll find out what is selling and what they're selling it for.
Once you're an insider, leads will come to you. Sometimes more leads than you can handle. I tell you all this, because the bargain property business is a hard business to get started in. There's a lot of competition, and with good reason. There's a huge profit potential in fixing up bargain properties as well as buying properties that have distressed people living in them.
Many times great deals come from distressed investors, particularly distressed partnerships. Lots of times these people will sell a property under the market value just to get out of their situation. These people will worship anyone who can take the property off of their hands.
There is no way that a short article like this can tell you all the ins and outs of dealing in bargain properties. But the lesson to be learned is: Don't go chasing after every property you see. Don't go after properties that many other people are interested in. Start slowly, work with someone else, if possible, and get to know the business from the inside. This way, you will gain experience without taking risk.
Once you have the experience, you'll be ahead of 98 percent of the people who are looking for bargain properties. This field is full of amateurs, but in a short time, you'll be a pro. Good luck, you might just become a real estate mogul!