Are distressed properties a good idea

Are Distressed Properties A Good Idea?
I always have mixed feelings about the subject of buying distressed properties. Having wholesaled many properties in Phoenix, I have made myself and my clients a lot of money. But in doing so, my goal was not just to make a profit. It was also to make sure that the seller was treated fairly. It was important to me that it was a win win situation for all parties involved. As a licensed realtor, I easily researched just how much the property could be sold for. And owning a construction company, the cost of fix up was efficiently and accurately calculated. Once the property was purchased and the construction was complete, the property was listed and sold at a discounted commission. This process served me well for many years.
Today, I see more and more wholesalers that sell the properties at figures that I find unbelievable. I have worked with a few clients that have bought from these wholesalers, and they are all losing money. One client bought a $400,000 so called investment home. The realtor did the deal having told the client that they cold sell it for a certain profit. When the deal closed the client was left with a $3000+ mortgage and a vacant home that is still on the market. Another client bought a $600,000 investment home that they could not sell I helped them get an additional $400 a month on their rent, still leaving them $2500 a month short. That’s a lot of money!
Considering the current market, I would consult you to really THINK about what you are buying. My rule of thumb is to never buy a home that is over $250,000 in Phoenix. Today, I would not even do that. The market is very soft, and chances are, all you will get is monthly bill. People will tell you, “Buy now. The value will come back.” I do believe that the value will rebound, but unless you are willing to take a monthly loss, you may want to rethink your strategy. That type of investment is speculation, betting on the future. I want to put money in your pocket today!
My company is currently buying homes in the Midwest that not only appreciate, but put money in your pocket every month. I bought a duplex in Kokomo, Indiana, at 212 N Webster, for $18,000 cash with $6,000 in fix up. Once repaired, I rented both units for $425 each, with $150 a month in expenses. I collected my cash for 6 months, then got a credit line against the property. It appraised for $40,000. That gave me $16,000 dollar profit, wow! I did it in this market for way less money with great cash flow to boot! Finding good deals like this takes knowledge and patience. I find them for me and my clients. So don’t get wrapped up in these huge profit deals that turn into another house payment. Be smart and look for deals that will cash flow today, not just in the future.

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Brett young
Valley Realty
Owner/ CEO Roof Top Investment
Real Estate Investment
http://www.rooftopprofitmax.com/