Definition of Distressed - What Does Distressed Mean?
The distressed definition varies, but frequently a distressed property has fallen into disrepair or needs updating.
To define distressed property, we can consider the many situations that can lead to a home or condominium falling into this category: divorce, death in the family, job relocation, financial strain, condition of the property, partnership disputes or foreclosed/bank owned properties. All of these can be considered a distressed property.
What is a Distressed Property?
A distressed property is usually for sale by owner or by the bank. A property that is distressed, meaning it is offered on the market at a discount, can be a great opportunity for investment. The home owner or lender may offer the home for sale at a significant savings.
Finding Distressed Properties for Sale in Your Area
Wondering how to find distressed properties in your area? Finding distressed properties for sale in your area, or any area, is easy with the online listings that are available. A quick search will reveal a variety of properties and foreclosed homes that you could invest in. Another approach is to contact a real estate agent who specializes in the distressed property market in the area where you want to buy. For example, distressed properties in Florida are widely available and make great investment properties. As vacation homes or rentals, investing in cheap Florida housing could bring you great earnings.
Buying Distressed Properties – The Process
Wondering how to buy a distressed property? For many, the process starts with an online search or a real estate agent. The next steps aren’t very different than buying a regular home. You may want to do more extensive research on a distressed property and the process may take longer due to bank approvals, but overall, it is the same.
What to consider when buying distressed properties
Before investing in a distressed property, you’ll want to do the following:
- Think about your down payment and save funds
- Determine the location you want to target for your search
- Get financing
- Find a real estate agent
- Do your research and get comparables from your real estate agent
- Find the property and make an offer
- Get an inspection
Of course, the last step in any home sale is the closing.
What to Do After Buying A Distressed Property – Investing
Distressed home sales can mean a big bargain for investors and they are a popular way to build wealth. Foreclosure investing is popular because it is often a way to make a big return on your investment. Knowing how to invest wisely is the key to making a distressed property your investment gem.