Most Important Points of Buying Distressed Real Estate

A lot of people find it far too complex to purchase so called “distressed” real estate. This is because this type of real estate is not the type you buy to move into with your family. Rather, you need to have a strong composure and a lot of imagination. But, if you want to make it in the real estate industry, then you need to have those things anyway. Now, interestingly, distressed properties are particularly popular with nonprofit companies, who buy and sell them for a profit to further their cause. For this, however, they need a broker. Many brokers, like Joseph Johnson Welfont, are professionals in completely different fields. Joseph Johnson, for instance, is a thoracic surgeon! The reason for this is that, once you understand the distressed property market and the link to nonprofit organizations, it is a very nice side-earning business.

What Are Distressed Properties?

Distressed properties are, more often than not, properties that have gone into foreclosure because the owners were unable to pay their mortgage. Generally speaking, these properties are also in a state of extreme disrepair. This is a risky business, but also one that, if worked with properly, can be incredibly lucrative. Take Donald Trump, for instance, who started making small purchases of distressed properties and is now the President of the United States (as well as a property mogul). These are the types of deals that Joseph Johnson Welfont also focus on.

How Does it Work?

  1. You must use the internet, which is the world’s cheapest resource, in order to find properties that are under foreclosure. Doing your own research is cheaper than speaking to the government or the bank.
  2. You must find a broker, like Welfont, to appraise the property and help you with completing the deal itself.
  3. You should inspect the area in which the property is found. This is particularly important if the property seems too good to be true in terms of upkeep and maintenance. If the neighborhood is terrible, you will struggle to sell. You should also look at the neighborhood to see who to target in terms of buyers. A property on a third floor of a building without an elevator, for instance, isn’t suitable for elderly people.

If you think that you have come across a good deal, it is time to instruct your dealer to speak to the seller. This could be the government or a bank, depending on how the foreclosure went. If you are pretty good at dealing, or you have a broker who is, then should be able to get a really affordable mortgage. It is best to have your mortgage pre-approved before agreeing to move ahead, because banks and the government want to get rid of foreclosed properties as soon as possible. This is because they simply do not have the skills needed to manage these types of properties. If you’re smart and you play your cards right, you should be able to get a great deal.