A distressed property is a property whose owner is in default on the home loan. During the recession, one-third of all home sales were distressed sales, although the amount available depends on market conditions. Distressed homes are still available in high numbers and represent an excellent investment opportunity.
Investors preparing to buy a distressed property should understand the difference between a short sale -- in which the final purchase price is less than the amount owed to the lender but must be negotiated with the lender and homeowner -- and a foreclosure -- in which a home has been repossessed. Distressed properties typically need extensive rehab work and are sold as-is, which means you need money on hand to make necessary repairs and flip the property for a profit, or turn it into a rental property.
Direct Investors offers hard money loans for distressed properties that may be used to purchase and/or rehab the property.
For foreclosures and distressed properties that need immediate repairs, a hard money rehab loan is the easiest and fastest loan to obtain for investors. Traditional lenders rarely want to front a loan for properties in need of work, particularly multifamily properties that have a record of deferred maintenance.
Timing is everything in real estate investing. While a bank loan will have a lower interest rate, it will likely take up to two months to close, compared to a hard money loan, which we can close in a matter of days. This puts you in the best possible position to make a strong offer, get the repairs done quickly and lock in a profit.
Our loans may be used in many situations, including:
If you are considering buying a distressed property for investment purposes, contact Direct Investors today. We offer the best rates to experienced investors with customized loan programs that fit the unique needs of your business.