According to the Spaulding Decon, more than 1.4 million homes are vacant in the United States and a majority of them are in a distressed state.
What Are Distressed Properties?
Distressed properties are like gold mines for investors. It is a term used for properties that have been seized or are in foreclosure from the lender. This can usually occur when the property is experiencing some kind of incident or if the homeowners are unable to pay for the rent. Studies conducted at Stanford had stated that about 20% of people pass away in their homes – and sometimes they can be alone, and it takes a while until the bodies are found.
Moreover, another issue that often occurs to make houses go under distressing conditions is the space used for meth labs. In a report by the DEA, it was stated that there are more than a thousand meth labs all over the United States. And once these properties are found, they immediately become a hazard zone and can no longer be inhibited.
So how exactly can an investor make use of these distressed properties and make good homes for future homeowners? Learn useful information from professionals like Lloyd Segal working in the field.
Llyod Segal is a highly acclaimed real estate investor, mentor, author, and national public speaker. He is also the President of the Los Angeles Real Estate Investors Club, the oldest and the largest investor group in California.
The club focuses on providing its members with education, mentoring, and networking. Monthly meetings are held alongside vendor expos, seminars, workshops, boot camps, and much more. As the President, Segal is responsible for overseeing all committees and activities while also writing a weekly ‘Economic Update’ which is emailed to over 52,000 real estate professionals in Southern California.
As the writer of the famous book ‘Stop Foreclosure Now in California’, he has had the opportunity to travel to many countries and speak at numerous real estate groups, industry events, etc. Segal has also shared several tips on how to efficiently sell distressed properties.
Lowering House Price
You will find that some distressed houses don’t meet the criteria for appraisals due to their unkempt conditions that include exposed floorboards and water damage.
Fixing houses like that can put a dent in your pocket and might not even fetch a large price enough to cover it. You might need to lower the cost of the house as it would be the ideal option in such cases.
Verify the Buyers
Given that you are selling your property to people who will be buying the house out of their pocket, you need to ensure that they can pay for the total amount on the agreed time.
If you are unable to create a land contract, it is highly suggested that you should ask them for proof of income to ensure that they can provide the ongoing payments that they have agreed on. Simply work on your negotiating skills, as this will help you sell the house at a reasonable price.