The Pros and Cons of Buying Distressed Properties

For more than three decades, James P. Knell has been leading the SIMA umbrella of companies in Santa Barbara, CA. Over the years, James P. Knell of Santa Barbara has worked to identify distressed properties that have the potential for turning a profit.

Distressed property is so appealing because of its low cost. Most property owners in foreclosure and banks that own foreclosed properties are looking to sell quickly. These distressed properties are priced low, and buyers often can negotiate even lower prices. 

However, there are some disadvantages to buying distressed properties. Many of the properties owned by lenders and banks have more paperwork and take more time to finalize. Buyers sometimes must wait months to hear if a bank has accepted their offer. 

Further, distressed properties are associated with higher maintenance costs. If the plan is to flip a distressed property, buyers must take into consideration the cost of repairing it.