Investing In Distressed Sales -If you’re looking to invest in real estate, some of the properties you may want to consider are those considered “distressed.” Investing in Distressed sales include short sales, foreclosures and Real Estate Owned sales (REOs). For instance Distressed sales are often considered deals by many real estate investors — but they aren’t a sure thing. While there’s a chance that your investment may turn out favorably, there are risks with investing in distressed sales. The following are some of the benefits and drawbacks of investing in the three main types of distressed sales in order to help you better judge whether the risk is worth the possible reward:

Investing In Distressed Sales

.   Foreclosures — Foreclosures are homes that are taken by the lender because the owner hasn’t been making their mortgage payments. Once a property has been foreclosed, the lender will sell the property to the highest bidder, auction style. If you’re looking for a steal, you’ll often find it by investing in foreclosed homes. Many foreclosures end up selling for at least 25 percent below their current market value. However, there’s a reason these homes go for so little, not the least of which is because there are a few risks involved. First of all, foreclosures are cash-only sales. You have to show up with a cashier’s check in order to purchase a foreclosed home. This means you can’t ask the bank for credits or attempt to get a refund if change your mind. equally important, there’s also little time to have the property inspected. You’re buying the property “as is.” If your luck is bad, the money you thought you saved could end up going into repairs. You may even lose money on it.

.   Short Sales — Short sales are properties that have a current market value that is lower than what the property’s owner owes to his or her bank. However, the homeowner is still the seller and has the majority of the say when it comes to the sale of their property. In some cases, a home is being sold as a short sale because the owner is required to move due to a change in their life, whether it’s a divorce, marriage or job transfer, to name a few possibilities. So what could be the issue with a short sale? The seller still needs to have permission from their lender to sell the home at below the cost of what they owe for the initial purchase. This can cause a delay in the buying process since banks are often slow to respond to a bid, even if the seller has accepted the bid. The bank could end up rejecting your offer after you’ve waited months to hear if it’s been accepted. If you’re looking to move into a new house by a certain time, looking into short sales may not be convenient for you. However, if time isn’t an issue, then a short sale could end up saving you as much as 10 percent off the property’s market value. Short-sale properties are often listed below the current market value because the sellers know that most buyers won’t want to wait around for the lenders to make a decision.

.   REOs – An REO is a foreclosed home that nobody purchased when it went up for auction. Therefore When this happens, the bank ends up taking the property back and it becomes an REO. No bank wants to bother being the owner of real estate, which means they are going to attempt to sell it as quickly as possible. The risks of investing in an REO is similar to the risk of buying a foreclosed property — the property is sold as is. You will have more time to inspect the property. The bank may even hold an open house or two, and you can even hire a professional home inspector to come take a look. in addition to, there are few or even no disclosures, which means you could still end up with a property that has issues if none of your inspections were able to uncover them. REOs are often considered fixer-uppers. You can purchase an REO for roughly 15 to 20 percent off its current market value, but after making renovations, you may end up with a property that is worth as much as 30 percent more than what you paid for it.

REOs are often considered fixer-uppers. Moreover Investing In Distressed Sales You can purchase a REO for roughly 15 to 20 percent off its current market value, but after making renovations, you may end up with a property that is worth as much as 30 percent more than what you paid for it.

furthermore Investing In Distressed Sales -These are the three types of distressed sales that you could invest in. These properties could net you a tidy profit if you know what you’re doing, but it’s important to understand that their are risks involved. If you plan on investing in distressed sales, make sure that you do your research and that you know what you are getting yourself into. As you can see, Investing In Distressed Sales can be a great way to increase your income.

For more information on Investing In Distressed Sales in Hagerstown contact Roberto Gonzalez