Many first-time property investors want to know how they can go about capitalizing on distressed property investments. And why not? Buying, renovating and selling distressed housing can help you rake in big bucks in a short span of time. All you need to do is find a run-down house, purchase it at a bargain, fix it up enough to sell it off.
Dominique Grubisa Youtube videos detail how you can make money from distressed property and are a good place to start if you want a quick run-through of the process involved.
Often house-sellers sell their property at a discount because they are unable to put in the required effort for upkeep. Then there are unforeseen circumstances and personal grievances such as divorce, sudden unemployment, addiction and illness that further complicate the problem. Financial and other limitations prevent them from affecting the required repairs and as a result, the property becomes low-priority. Sometimes, it even goes into foreclosure.
What to look for when buying a distressed property?
Home-owners have the hardest time selling off property that appears to be in shambles but only actually needs cosmetic repairs here and there to place it in competition with other houses for sale in the area. The reason most buyers bypass these houses is that they most often do not want to take on the responsibility of shelling out down payment, buying new furniture/appliances, investing in roof repairs, get carpeting, pay closing costs and for other maintenance work required the revive the house back into shape.
If the house only needs some carpeting, painting and cleaning up done – you’re good to go. Try not to invest in houses that need structural repairs as this requires a certain amount of experience as a buyer which you are not privy to as somebody just entering the market as one.
Say, you do have your heart set on buying a property which is in need of structural repair, get experienced professionals involved first. Talk to them and get an estimate of how much it might cost you before going forward with the purchase.
How to find such distressed housing?
Suppose, you are looking through the classified ads, keep your eyes open for words like “fixer,” “as is” and “handyman special.” They’ll lead you to a property in duress.
How to go about the purchase?
Once you’ve searched out a distressed housing to your liking, proceed to close the deal. Speak to the seller and try to offer solutions to his property-related problems. One thing in common with sellers of distressed housing is that they often happen to be in need of immediate money. If you are willing to close the deal soon, you will most likely be able to do so at a much lower price than you usually would have had to pay, had it not been in similar circumstances.
Additionally, if you already have a lender in place, there is nothing like it. The lender’s approval “pre-qualifies” you in the eyes of the seller and progresses you further up in line as compared to other potential buyers.
Which houses sell the best?
Houses located in a popular neighborhood are most vied for. Also, if the house has the number of bathrooms, bedrooms and basic amenities a buyer is looking for, it becomes a more attractive purchase to them. Usually, a home-buyer is looking for a house that meets their basic convenience and emotional needs.
Using colors to influence emotions works beneficially to draw in buyers. For, eg, If the main door to the house is painted a happy color, it is more likely to draw in a prospective buyer due to the appeal it adds to the house.
Why come to DG Institute?
Read DG Institute reviews to verify for yourself our expertise in flipping distressed property. We offer a free webinar that teaches you how to identify properties that can be bought under market value and then repaired and sold for a sizeable profit. We also share tips on how you can purchase pre-foreclosure properties from the bank at an unbelievable discount. Learn how you can help homeowners with distressed property beat the bank and work with you. Valuable tips as to how to avoid commonly made mistakes during distressed property investment are also shared.
Founder and CEO of the DG Institute, Dominique Grubisa bought her first distressed property in her 20s and managed to make a profit out of it. She used her professional experience as a lawyer dealing with debt to devise a 3-step procedure on how to invest in distressed property in Australia. Register for the Flipping Houses webinar and you can learn the same.