Pros and Cons of Buying a Distressed Property

In areas of tremendous growth and low housing inventory – like Denver – many potential home buyers are considering purchasing a distressed property as a way to break into home ownership. While the classification of “distressed housing” may conjure up images of less-than-desirable digs, these properties can often be a great deal – and in better shape than you might think. Whether or not your experience purchasing a distressed property is a positive one has a lot to do with understanding the process. If you know what to expect, the experience will undoubtedly be much more pleasant than if you go in blind.

Pros of purchasing a distressed property:
The most obvious reason to purchase a distressed property is the reduced price tag. While not all distressed properties are in dire need of renovation, it’s likely the previous owner didn’t have the time or money for extensive repairs, which account for the lower price tag you see. If you’re planning on making the distressed property your residence, you may find some favorable financing options to help get your foot in the door. And, if after a few years, you decide to move on to something else, you can still utilize the property as a rental unit for added income!

Cons of purchasing a distressed property:
Distressed properties vary. One may look great, but conceal sub-surface problems like a shaky foundation or poor electrical work throughout. Others may look horrible from the outside, but upon inspection, are structurally sound and only require some cosmetic upgrades to make it livable (or marketable, if you’re planning on flipping it.) It’s important to truly understand your budget, how much you can spend on repairs, and never ever skip the inspection!

The bottom line is: purchasing a distressed property doesn’t need to be scary or stressful – especially if you have the right team on your side. Metrowest specializes in distressed sales – if you considering this route give us a call today – we’d be happy to help you start the process!

 

Ken Blevins

About Ken Blevins

Ken Blevins, CEO of Metrowest Real Estate Services, is a veteran in mortgage and default servicing with more than 24 years of experience in collections, foreclosure/bankruptcy, loss mitigation and real estate disposition (REO). Blevins was an original co-founder of Metrowest in 2003, a Real Estate Brokerage and Services Company focused on the resale, recovery and liquidation of distressed real estate in Denver, Colorado and surrounding metros. Blevins assumed the role of CEO in January 2014 and provides strategic direction and has management accountability for the day-to-day operations. Under his direction, Blevins drives all default management operations to maximize asset value recovery and reduce loss severity through a strategy focused on customer service and state of the art technology. Blevins has 18 years of direct operational experience in all facets of REO Asset Management having managed large national REO Disposition contracts for Fannie Mae, Freddie Mac, Wells Fargo, JP Morgan Chase, CitiFinancial, GMAC Mortgage and other various financial institutions. Blevins specialties include REO asset management, real estate investment, bulk REO acquisitions and distressed asset recovery and liquidation, and he has directed the resolution and liquidation of over ten billion in institutionally-owned residential real estate.

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