Investing in real estate has always been a profitable business. It is one of the most popular and most common types of financing. People who deal with real estate mostly purposefully buy real estate for rent or sale and make a profit. Special attention should be paid to the ratio between the price of the property and its potential to generate income from the sale or rental.
When it comes to investing in real estate, it usually means buying a new or used property that will be remodeled and adjusted for sale or rent. However, have you considered investing in distressed property?
What is a Distressed property?
Distressed property is the result of a property owner who could not keep up with mortgage payments or a property tax bill.
In addition, such asset is not always seized due to late payment. Sometimes banks and lenders seek to return assets to protect their investment. Lenders may seize property if they discover any mortgage fraud or due to some other claim. Later, such asset is most often sold below market value.
Why invest in distressed property?
There are many reasons to invest in this type of property. The two key and most tempting reasons are prices and potential profit. Distressed property is sold at a price below market value. That way, there is the possibility, for example, of buying a property in a part of the city where, otherwise, you might not be able to buy it. Or to buy a property you once dreamed of, but the prices were simply too high.
Another good reason to buy distressed property is the profit you can make. If you buy a distressed property, at a price below the market price, invest in it and remodel it, you can sell or rent it out and thus make a profit.
In fact, investing in distressed property is a few-step process. It is first necessary to buy that property, remodel it, rent or sell it, refinance it and repeat the process.
After the purchase of the property, the most common question is how to renovate it and make it a pleasant environment for living. To increase the value of your property you need to dedicate yourself to arranging key things. A few things that you can do to improve your property that do not cost much are: painting the front door, finishing the floors and changing the tiles, installing blinds, power wash the house, removing obsolete awnings, replacing lamps, address or mailbox numbers, cleaning yards, planting grass, repairing a broken fence or gate, cleaning gutters, etc. These are some of the basic things that are not difficult to do, and which will certainly bring freshness and increase the price of the property itself.
The property thus arranged is now ready to be rented or sold. You decide for yourself whether it pays more to sell or rent it out, or whatever your ultimate goal is. Also, you can go through the complete process on your own and look for potential clients, or simply hire an agency to do it for you and in cooperation with you.
Whether you are already doing business in this field or you are new to this market, AMR Global Advisors works with partner company Black Mountain Group that provides investors, partners and lenders with outstanding and secure investment opportunities. Get your investment process easy as much as possible through modern technology and transparency.
Black Mountain Group operates in the US market, and you can read more about their projects at www.blackmgroup.com. BMG’s management team has decades of experience in investing in real estate in successful development, real estate management and constantly monitors development trends.