Michael Santos

MLB Residential Lending

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Dos And Donts Of Buying Distressed Real Estate

June 20, 2014 by Michael Santos

How to Build the Ultimate Tree House for Your Children in Just Seven StepsDistressed real estate is real estate in need of serious repairs. These properties are often called “handyman specials.” If you have the skill or the money to complete the repairs, you can often find great deals. Here are some dos and don’ts of buying distressed real estate.

DO Get A Home Inspection

Distressed homes need repairs. Some of these repairs, like broken floor tile, are easy to see. Others, like water damage in the attic, can be easily hidden. The only way to know for sure what you’re buying is to have the property inspected by a professional home inspector.

DO Pay Attention To The Home’s Market Value

You don’t want to buy a home and spend your hard-earned money for repairs only to find out the home is worth less than what you paid for it. Have your agent complete a comparative market analysis so you know what the home is worth.

DO Have An Estimate For Repairs

There’s no point buying a distressed home if you can’t afford the cost of the home and the repairs. Get an estimate from at least three contractors before you buy. Knowing the cost of repairs beforehand will help you make the best decision.

DON’T Think About Potential Profit

You’ve probably heard countless stories about people who bought distressed properties and sold them for outrageous profits. However, the reality is that most distressed homes are sold for a small profit or no profit.

DON’T Buy A Home Just Because The Price Is Low

When you buy distressed homes, you have to consider more than just the asking price. Add together the cost of repairs, insurance, and what you can realistically expect to make from the sale. This will tell you if the home really is a good investment for you.

DON’T Buy If You Don’t Have The Money

No matter how good a deal you find on distressed homes, they aren’t worth it if they will stretch your budget too far. The last thing you want to deal with is damage to your credit score and the risk of foreclosure in the event you can’t pay for the home.

Filed Under: Real Estate Tagged With: Distressed Real Estate, DIY, Real Estate Tips

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Branch Manager Executive / Mortgage Loan Originator

Top Loan Originator Since 2001

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Michael Santos NMLS #199875 • MLB Residential Lending, LLC. NMLS# 1101220. Michael originates NJ loans only. MLB Residential Lending, LLC. is located at 51 Commerce Street, Springfield, NJ 07081, 732.243.0140. MLB Residential Lending, LLC. NMLS#: 1101220 is a residential lender, licensed by the NJ Department of Banking and Insurance; licensed by the PA Department of Banking and Securities; licensed by the CT Department of Banking; licensed by the DE Dept. of the Banking Commissioner; and is licensed under the FL Mortgage Lender Service License # MLD1128. All rates are subject to change without notice. MLB in no way, claims to represent or to conduct business on behalf of HUD, the FHA or the Federal Government. This site is not authorized by the New York State Department of Financial Services. THIS SITE IS INTENDED ONLY FOR NJ CONSUMERS.

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