Distressed properties are homes with owners who are having trouble with their mortgage obligations and possibly facing foreclosure. There are various reasons why a homeowner might find himself in such a position including job loss, medical emergency or financial mismanagement. In any case, these unfortunate circumstances could open the doors for great investment opportunity for home buyers.
"Foreclosure is one of the least desirable alternatives to the loan holder-the loan holder becomes an owner of the property and is one of the most costly and most time-consuming to them," says Lance Falow Partner at The Heathcote Group.
The seller of a distress home is easier to talk to considering the urgency of the situation. In many cases, the bid or offer is immediately accepted especially if local competition among sellers is tough. For your offer to be considered and accepted, you should make a reasonable and fair one. You can do this by studying the local housing market and doing a bit of research. You and the seller can agree to a non-monetary compromise that will allow the both of you to walk away satisfied from the sale.
Keep in mind that a distress property may require some major repairs and you should have the property professionally inspected before closing the deal. In addition, you might want to include the cost of the repair in your overall budget in order for you to avoid going overboard. The search and purchase of a distress home is riddled with challenges but if you are able to overcome them, you will reap the full reward.
The Heathcote Group
The Heathcote Group lends money on commercial property and non-owner occupied residential property. It also buys defaulted mortgages and distressed property, both in New York and Florida.
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