What Is Distressed Foreclosures?

Properties in need of repair are referred to as "distressed."

When owners default on mortgage loans, the bank assumes control of the respective properties. When these properties are also in need of repair, they are referred to as "distressed foreclosures."

Benefits

Distressed properties can sell for nearly 50 percent of market value, and thus can be financially beneficial to property investors who purchase, renovate and then rent or resell.

Considerations

Distressed residential properties are sometimes referred to as "fixer upper homes," and typically require buyers to make relatively inexpensive repairs. As a result, the homes are sold at greatly discounted prices.

Types

Foreclosed properties in a state of distress can include homes, apartment complexes or commercial buildings.

Search

Locating distressed foreclosures can be difficult, but the process is simplified through the use of websites like bankforeclosuressale.com and distressedpropertiessale.com. These resources provide organized listings of foreclosed properties for sale in the U.S.

Warning

You are encouraged to use the services of property inspectors prior to purchasing distressed properties. This will give you a clear picture of what repairs are needed, and should be considered in determining a discounted sale price.

References

• How to Purchase Distressed Real Estate
• Distressed Propeties for Sale
• The Lowdown on Distressed Properties