4 Tips for Real Estate Investors and Landlords to Pick up Distressed Properties

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Real Estate Investment Distressed Residential Rental Property

1. Identify distressed properties.

 2010 will continue to provide opportunities for picking up distressed properties. Over the next 3 years the commercial debt for acquisition of apartments is coming will be coming due and it will be difficult to refinance these properties in the new conservative lending environment. Owners who are able to add equity to the properties will be able to survive but others will have to walk away from their properties.  This provides an opportunity to pick up some great properties at pennies. It is important to be continuously scanning the horizon to find valuable distressed properties and a good real estate agent who understands the investor’s criteria is a great asset.

2. Raise Cash to move quickly

 Landlords and real estate investors with cash in hand have an upper edge as they lower the risk with closing and accelerate the deal as compared to others who will need to finance the purchase.  Cash may also enable better discount on a property from the seller.

3. Can’t Raise Cash, Find Lenders

 Overall lending requirements have become very strict and lenders are demanding more stringent loan terms for acquiring residential rental properties. In order to pick up properties at pennies, if no cash is available, raising capital from financial institution may be the only option. So finding a bank or mortgage broker who can find financing is critical for success.

 4. Move quickly and execute fast

As more and more real estate investors and landlords become comfortable with the economy they will open their wallets leading to some competition in acquisition of distressed properties. Therefore, the key to success is going to be working with a real estate broker who can find discounted deals and the ability to move fast on making offers and closing the deals.

The next few years provide opportunities for savvy investors to pick up properties at discounts and by following these tips, they can improve their chances of adding more valuable residential real estate properties to their portfolio.

Comments (5)

Craig Snead
Quality Home Investments, LLC / Dearborn Heights, MI - Dearborn Heights, MI
Real Estate Investor

Niman - as an investor, I found some valid points in your blog.  Opportunities are ahead and cash is king. If an investor is looking to buy and hold or even buy and wholesale, they need cash. Another alternative to lenders is to have a private money partner. Private money partners are all around us. It could be a doctor, a lawyer, a family member or another investor. If one of these persons has money in the bank earning 2-4% and you can offer them a better return on investment, it can be a win-win for all parties involved.

Jan 29, 2010 02:28 AM
Robert D. Thorburn

Niman:  Thanks for the great tips,

You have given me some things to think about concerning financing.  And I think that you are right that now is the time to buy that distressed property.  Thanks!

Jan 29, 2010 07:28 AM
Don Eichler
Eichler Properties - Granbury, TX

Niman. Good information no matter what part of the U.S. you live in.  Ther are some relly great deals on apartment buildings in our general area.  And as Craig said cash is king.

Feb 02, 2010 10:23 AM
Niman Singh
SimplifyEm - Fremont, CA
Property Management Software

Hi guys, thanks for stopping by. Just read this article about Investors wrestling with first-time home buyers over foreclosed properties, thought you might like it.

As always, cash is king!

Feb 12, 2010 05:47 AM
Tim Holtkamp
Gold Financial Services - Waco, TX

Niman, Thanks for the tips. They seem to be good advice on Real Estate investment. I would also add to get involved in a local Real Estate investment club where you live. Most have lots of good people with lots of experence.

Feb 22, 2010 06:52 AM