Those planning to buy new property in New Jersey may be considering a home that is distressed. If done correctly, purchasing a distressed property can provide tremendous value. However, there are a number of things you must be aware of.
What Is Distressed Property?
Distressed properties are placed on auction when the owner is not able to continue paying the mortgage that is owed to the lender. Although finding such properties can sometimes be challenging, working with a realtor that is experienced makes the process a lot easier. Some properties which are distressed can be occupied immediately, whereas others may take some time.
Distressed Properties Are Affordable
Getting into real estate usually requires a lot of money or very good connections. Distressed properties provide the opportunity to invest without having either. This is because many of the homes are broken down and simply in need of repairs. If you or someone you know has the skill, discipline and dedication to fix them without spending a lot of money, you have an opportunity to gain substantial profits. This does not mean that all distressed property is good, some are not. Your job as an investor is to develop a keen eye and learn how to discern the difference between a good and bad deal.
Distressed Property Can Be Used To Launch Your Career In Real Estate
Those planning to build a career in real estate can use distressed property as a spring board. The price of such buildings are usually much lower than the market value, which means you can get started without having lots of money at your disposal. These properties are usually in need of some repairs and after they’ve been completed the property can be flipped, or sold for a profit.
Distressed Properties Are Usually Negotiable
Since distressed property is often damaged and in need of repair, sellers are often motivated to get rid of them, and will be open to negotiation. Distressed properties will usually be found under short sales or foreclosure listings, and their price will differ based on the lender. The simple fact of the matter is that as the buyer you will have a significant advantage when choosing how much you want to spend. Owners want to move distressed properties as quickly as they can so it isn’t unusual to receive a discounted rate that is 15 percent less than the advertised price. Your success will depend on how well you can negotiate.
Sometimes Distressed Property Is Situated In Good Locations
A common misconception regarding distressed properties is that they are always located in bad areas. While this is sometimes the case, it isn’t always true. If you’ve researched a New Jersey area very well, you will know which locations are prime and otherwise, and you will be able to choose distressed properties that are located in the best spots. These properties will tend to cost more than distressed properties located in bad areas, but less than normal properties situated in good areas, so you are still getting a bargain.
