subject: The Best Way To Handle Distressed Properties [print this page] We all know real estate can be tough at times and it can be good at times. But this particular article is about the best way to handle distressed properties. Sometimes, and most often, as a result of financial stress, owners of real estate distressed properties will be open to considerable discounts in their prices and terms if they have to.
Always remember, not all distressed properties are run down. A property can be distressed for a variety of reasons, such as illness, death, relocation, or poor property management.
However, when any one of these is a factor, the property usually will be run down to some extent, because of the owner's mental state or lack of funds to maintain the property. You don't want to get into the habit of taking advantage of people who are facing a tough time.
What you should do is try the opposite attack by taking a burden off someone's back and help them solve their financial problem. This way it can benefit both of you in a positive way in the long run.
Many of these properties are vacant, with someone still responsible for making mortgage payments, and they are probably not easy to rent due their condition. So the owner may have a big mortgage to pay on the property every month and may not be receiving any financial benefit from owning the property.
If you show up and offer them a way to make money, they'll often jump at your deal maybe out of desperation. When you do your research on a property, it's important to determine how long it has been vacant and the existing monthly payments. If the property has sat vacant for six months with maybe $1500 monthly payments, those owners have already lost a ton of money, with no prospect of the money drain ending anytime soon.
If you come up with an offer that solves their problem, you may be able to not only purchase the property with no money down but also get the property at a greatly reduced price. And in most cases, getting the property burden off the seller will be a win solution for everyone.
In summary, getting inside the owner's head is important because you can find out all sorts of things that will work to your advantage in the negotiations for this type of property. This is also where being a problem solver for the seller and thinking a little differently can pay big dividends.
