Distressed Properties: How to Identify Its Hidden Value
Distressed properties: high Risk, high reward—but is it right for you?
Either beginner when it comes to real estate investment or a seasoned professional (looking to expand his portfolio), at some point, both of them may have thought of buying distressed properties. Be it land, houses, or commercial space– there are certain things you have to consider.
Given the flourishing real estate industry in Nigeria, it is undeniable that there are plenty of deals to be had (especially in Abuja and Lagos). It is important to note that these real estate investments are not just limited to Nigeria but can be found throughout Africa.
Why Distressed Properties are Popular Among Investors?
The answer is short: these are discounted. Thus, investors can have increased profit margins when they sell the property. Finding foreclosed properties means looking for sellers who are motivated to sell. Commonly, these sellers own properties that need maintenance.
In this article, PlistHub will cover ways you can find sellers and eventually buy from them.
Look What We’ve Found: Undervalued Real Estate Properties!
What are distressed properties? Commonly these are real estate properties such as houses, land, or commercial spaces that their current owners can no longer manage. More often than not, these are neglected and, not surprisingly, in a poor state. Among the top reasons why such happened or continues to happen is because of the owners’ financial situation. Worst case scenario: they have debts they need to pay off. On the other hand, foreclosed properties can also be considered undervalued.
Essentially, owners of such properties are passionate about selling and, more often than not, as soon as possible. Read on the tips below:
If you want to invest in undervalued properties…realize that.
- No homeowner calls their own home “a distressed home” (unless they need to sell the house immediately)
- It is discounted because the owners need to sell it urgently.
- Specific real estate properties possess the characteristics of not-so-good properties but won’t be called or listed as such.
We hate to spoil it, but if you were to search online for “distressed properties,” you will miss out on a large percentage of homes that are “undervalued.”
Do you want to have some adventure while looking for real estate property around Lagos or Abuja? You may drive around your neighborhood. Read on:
1. Neighborhood. It is essential to look around your targeted neighborhood in Abuja or Lagos. Before that, you should have done some research. Once potential property (ies) is spotted, note down a few details like the address for reference sooner or later.
Bonus tip: if you want to save yourself from legwork, employ the services of a reputable real estate company.
2. Banked-Owned Properties. Banked-owned properties are also another example and are repossessed and are under foreclosure. Banks seize a specific property for reasons like the inability to keep up with their mortgage payments. Worst case scenario, the owner used their house as collateral.
Bonus tip: Banks list cheap real estate on their websites. You can always give them a ring.
3. Government-Owned Properties. In Nigeria, the Asset Management Corporation of Nigeria (AMCON) stabilizes the financial system by purchasing non-performing loans from banks and related financial institutions. Commonly, these non-performing loans are collateralized with a property. Then, AMCON will seize the said property and will market it to recover the debts owed.
Bonus tip: You can find a list of available AMCON properties on their website.
Real Estate Investment: Search Real Estate Listings Online (and Offline)
With Nigeria’s burgeoning real estate industry, it is impossible not to find houses for sale online and offline. You can find many sellers through forums, online classified sites, and newspapers.
Always bear in mind your investment plan: you are searching for properties that are below market value. When browsing through online listings, take note of the properties that have been listed for three months and up. Now, if these listings expire, you may contact the agent or the owner directly. Only then can you offer them a deal and see if they accept.
Work With Us. Work With a Real Estate Company!
Real estate companies like PListHub are an invaluable resource when it comes to buying any real estate property. Not only are they networking with other agents, but also they are in direct contact with banks, lenders, and government agencies. Hence, sourcing deals on any property type you are seeking is made possible. What are you waiting for? Have access to the best deals before it’s too late. Do not wait for another year to buy distressed properties for flipping or rental yield (after renovation). Visit our listings today!