Investing in distressed properties carries with it its own pros and cons. An investor can usually purchase a distressed property well below market value, but there is also a high likelihood of high-cost repairs and high competition from other investors. Understanding where and what to look for in distressed properties as an investment is vital to your success.

What Is “Distressed Property”?

A distressed property is a property that is either under foreclosure or headed in that direction, usually due to a defaulted borrower who has not kept up with mortgage payments. Foreclosure is not an immediate event, it is a process, so an experienced investor can create a mutually beneficial opportunity with a defaulted borrower by purchasing the property before it actually has entered into foreclosure. This arrangement can keep the borrower from having a foreclosure on their credit report while offering the investor a lower purchase price on the property.

Are Distressed Properties a Wise Investment?

Distressed properties can be a very wise investment as long as you do your due diligence. If the homeowner fell behind on making their mortgage payments, it is very likely that they also neglected regular maintenance, which could easily have led to high-cost repairs that you, the investor, will have to make prior to reselling the home or using it as rental property. So be careful about inspecting the property. Asking a trusted inspector from your professional network to accompany you is an excellent way to determine the potential value of a distressed property.

You should also research the area where the property is located if it is not one with which you are familiar. A good home in a bad location can, and usually does, drastically reduce its value and your Return On Investment (ROI). And a property with great potential in a great area is going to have many investors trying to purchase it, so the competition may raise the price out of your range.

Income generated from distressed properties can be used to make even more investments, thus increasing your original investment exponentially. The fact that you can usually purchase these distressed properties for a lower price also means that you spend less of your working capital, leaving sufficient funding for the purchase of additional properties. Lenders will also often offer better financing including lower costs and fees ad ower monthly payments.

Why Invest in the Pensacola, Florida Area?

Pensacola is an area of Florida known for its laidback lifestyle – which makes it an ideal location for raising a family. There is a vast variety of entertainment options as well, beyond the obvious appeal of the white sand beaches. Pensacola is home to dozens of museums, art galleries, historical sites, local cultural events, and even a lighthouse. There is something for just about every interest – nature, history, culture, art, fine arts, and other entertainment. So if you can’t find something interesting or fun to do in Pensacola, you’re simply not looking!

But what about the real estate market? In 2021, the real estate market in Pensacola was absolutely exceptional for investors. And, according to recent reports from Florida Investors, demand still exceeds supply so it remains a great market for investors.

New to Investing in Distressed Properties?

If you are new to investing in distressed properties, partnering with experts is a great way to get your feet wet. Here at American Made Home Solutions, we have the experience, resources, and knowledge to help you have a successful experience. We can teach you about property selection

Why America Made Home Solutions

American Made Home Solutions is part of a nationwide group of thousands of investors who are helping tens of thousands of homeowners every year. We can share that experience with you as a new investor.

Are you looking to invest in real estate with an experienced team creating solid returns and building lasting relationships to help diversify and strengthen your investment portfolio? Does the idea of multifamily intrigue you but you have no idea how to get started? Love your W2 job and solely want to invest passively? Looking to give back to the community and have a meaningful impact through 501c3 organizations? If so, follow the link below to fill out the questionnaire so we can start that relationship, which will also open the door for you to attend our deal opportunity webinars. F

And, filling out the questionnaire doesn’t commit you to anything other than receiving a phone call and/or email from us to discuss your goals. Your information is private and is not sold or given out to 3rd parties without your express consent. So contact us today at https://americanmadehomesolutions.com/investors/