Distressed Property Blog

While it may seem like a stretch to invest in distressed properties out of state, that is exactly what some savvy investors are doing. For out of state investors, buying homes in foreclosure hotspots like Detroit is, as one investor put it, like buying up “unpolished diamonds.”

In a market where “credit is tight and cash is king, an investor’s cash can go pretty far,” points out a report today on NPR. “As the U.S. real estate market falls further into decline, some cities where properties are going particularly cheap are seeing a strange revival. In Detroit, where foreclosed houses can be found on nearly every block, foreign and domestic investors are buying up bargain homes in bulk as long-term investments.”

How do you do it? Well, businesses like Urban Detroit Wholesalers specialize in helping out of state investors invest safely and profitably. “Our mission is to give you a once in a lifetime deal everyday and our buyers will tell you that this is exactly what we provide,” says company officials. “We will help you with what due diligence you need to do on each house.”

You can also look on my site, Houses.net, the first and only Multiple Listing-like Service for pre-foreclosure and distressed properties. Houses.net features thousands of homes which are ready, willing, and able to be sold to real estate investors at below-market prices, making it easy for the out-of-state investor to pick and choose the right investment properties.

Regardless of the business partner you choose to use to locate and compare properties, make sure you avoid the following foreclosure investing minefields:

1. Steer clear of foreclosure investment scams: These days there are more scam artists out there than you can shake a stick at. Bone up on the latest scams and make sure you yourself are not a victim. For more on real estate and mortgage fraud prevention, see my colleague Ralph Roberts’ blog, FlippingFrenzy.com.
2. Research the title yourself: Ask the title company to supply you with a “title commitment” and examine it carefully yourself.
3. Inspect the property yourself: Sure, you may have to fly in from out of state in order to do so, but nothing quite compares viewing such a large investment with your own eyes.
4. Invest with Integrity: Do not mislead homeowners into believing that the only option they have is to sell their property to you. Distressed property owners always have options.
5. Anticipate delays: Homeowners take their time to make decisions (even those facing foreclosure), as do the courts or trustees.

Happy investing!