Real estate investors are quite familiar with distressed properties, but what is a distressed neighborhood? And how does a distressed neighborhood offer opportunities for large-scale investors or investment groups? Well, that’s precisely what we’ll explore in today’s article from The Short Sale Gal Kristine Zelazo.
What is a Distressed Neighborhood?
While a distressed property refers to a specific home that’s in poor condition and/or is owned by an individual who is in financial distress and is unable to afford to keep the home, a distressed neighborhood refers to an entire neighborhood with multiple properties.
Distressed neighborhoods typically involve homes that are in poor condition due to the bad economic/financial situation of the residents in that area. As a result, the properties may be dilapidated and poorly maintained. Many properties may be vacant and in bad condition, which brings down the property value of the entire area.
The primary differentiating factor is that a distressed neighborhood’s condition is beyond the control of any single property owner, which makes for a rather challenging situation for a single investor. But it’s a different story for large-scale investors or investor collaboratives.
What Investment Opportunities Exist in a Distressed Neighborhood?
A home in an distressed neighborhood can certainly be rehabbed and re-sold for a profit or maintained as a rental holding. But the potential for even greater profit exists when a large-scale investor or a group of investors can join forces to purchase and rehab multiple homes in the same area.
This type of investment opportunity requires a significant investment since multiple properties must be acquired and rehabbed in order to have a significant impact on the neighborhood as a whole. But an aggressive approach can bring tremendous results. If a dozen small scale investors join forces and each rehabs 1 or 2 homes over the course of a year, then this can dramatically change the face of a small neighborhood. The result is a higher average property value due to the improved standard of living.
What’s more, a change in the neighborhood culture can result in positive effects on the property owners who do not choose to sell. These homeowners often start caring for their property more effectively when they see that the standard of living is improving.
This type of situation can lead to a win-win for everyone involved. The residents of that neighborhood enjoy an improved standard of living and the investors collectively see better returns on their investments since the distressed neighborhood is no longer so distressed.
Need Help Getting Started in Real Estate Investing?
If you’re getting started in real estate, consider working with a real estate investing mentor like The Short Sale Gal, Kristine Zelazo. Getting started in real estate investing can be somewhat challenging, but when done right, you can stand to make significant profits. You’ll have lots of advantages in this regard when you work with a real estate investing and short sale expert like Kristine Zelazo, better known as The Short Sale Gal.
Based in Florida, Kristine works with both buyers and sellers and she is an experienced negotiator. So if you’re an investor seeking to get started in buying short sales and need a great mentor or wish to pursue a short sale transaction for the sale of your property, turn to Kristine Zelazo, the Short Sale Gal!
To get started with selling your home, simply complete the home pre-sale form to provide Kristine with additional information on the property in question. Then, call 786.570.0360.