Why Distressed Properties are a Great Investment Opportunity

Distressed properties, or foreclosures and short sales, can be a great investment opportunity if you’re not afraid of a little effort. A large percentage of Utah real estate for sale today is considered distressed, and many buyers are afraid of the longer transactions and potential pitfalls. So, why should you consider buying distressed Utah real estate? Here’s a look.

Why are Distressed Properties a Great Investment Vehicle?

Two-thirds of all investors buy distressed properties for a reason: with low interest rates and banks eager to get this Utah real estate off their books, foreclosures and short sales are a great buy. If you’re interested in passive income, consider the money you can make by fixing up distressed rental property. The National Association of Realtors projects an increase in property rentals of 4% through 2013 and beyond. Goldman Sachs also finds that Utah rental properties (if purchased today) will yield more than 6% return on investment.

If that doesn’t convince you, maybe Warren Buffett will. He recently stated that the best investment opportunity now is buying distressed homes using cheap leverage (ie, a mortgage) and then renting them out for a profit.

Types of Distressed Properties

If you’re thinking about buying distressed properties in Utah, you have a few options available to you. Short sales, which are properties that are destined for foreclosure, happen when the owner is trying to sell their Utah home for lower than they owe. Short sales can take a long time, so it’s important to work with agents who have a lot of experience working with lenders during a short sale. REO properties, or real estate owned foreclosures, are owned by the bank or lender and require making an offer directly to the bank. You can usually get a better deal from an REO property because the lender is eager to take this Utah real estate off their books.

Finally, if you have the money up-front, foreclosure auctions may be an option. These auctions generally aren’t best for individual buyers and they don’t allow you to use leverage to your advantage if you want to make money on a rental property.

Why Red Sign?

We’ve worked hard to understand the distressed Utah real estate market and have made foreclosures and short sales our speciality. We work with investors and home buyers to speed up the often lengthy transaction process and know how to find the best investment properties for the highest possible return on your investment. We’re dedicated to getting you want you want, quickly and with less money out of your pocket.

Please contact the team at Red Sign today to learn more about distressed property opportunities in Utah and how we can help you choose an investment property to meet your goals.