Before Buying a Distressed Property
The dream is find a BMV and make a huge profit right? Easier said then done! First there is the money issue. So many new investors look for that Unicorn investor who is getting virtually zero return in the bank and would love to give it to you for 1% a month…or a share of the profit. Firstly I would suggest, this is not reality. Unicorns do not exist. Investors want to see a track record of deals. So it is chicken or egg scenario. Simple solution, is outline the deal….expected renovation costs…expected profits. Give a larger share to the investor as they are taking all the risk. They will become your capital partner if you are successful and will help you grow.
Next big issue is buying that proverbial distressed property. Most of our properties we bring back to the brick. This takes experience and knowledge. If you do not have a full grasp of costs you can be easily shocked. So firstly…learn and know your costs. More so I strongly suggest getting a survey. We have seen more properties that have had subsidence that I can count….cracks…movement…you name it.
This is Manchester. Not knowing these issues can cost you big time. It comes down to money. How much will this or that cost. Sometimes the bigger the muck…the bigger the buck ( USD slang). However you need to know what you are doing.
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