Secrets to Making Money on Distressed Properties: Property Investor, #4

Distressed Property

Investment

INTRODUCTION

This book in the Property Hub educational series has been written  in  association with Property Hub, the UK's most respected  provider  of  professional training programmes.

Property Hub and its associated network of industry experts and partners have a wealth of property investing knowledge. Property Hub trainers and customers derive from all ages and backgrounds and have over a decade's experience of working with new and existing investors from all over the world.

This book in the Property Hub series looks at distressed property and the opportunities it offers to the investor. Distressed property is all about adding value or buying below market value. Ideally you will do both! The creative strategies explored in  this  book  can  enable  you  to  advance  way  beyond  the  parameters  of  the  average  property  investor.  We  explain  how  to make distressed property work for you, helping to open your eyes to the  potential that is available and giving you that vital edge when investing.

CHAPTER ONE STRATEGY EQUALS RESULTS

The number one requirement when investing is having the right mindset. Your property success rests on convincing people to sell their properties at the price that works for you. You also want people to lend money to you, partner with you, and work with you as part of your power team. Believing in yourself is key to success with others!

Adopt an aggressive buying strategy. Be creative – if you do the same as everyone else, you will find there is more competition for the deals.

Develop clarity and vision. Know where you want to be in five years time, in  three years, next year... Take massive action. By this we mean do something that you are not doing right now - change your approach. It is through action that you acquire knowledge. Finally, get educated and stay close to other positive, like-minded people.

So, let’s get started with distressed property. You can find it at all points in the spectrum, ranging from inexpensive (£0-£150k), mid-range (£150k-£500k) to large projects (£500k plus).

A low-end distressed property might be a standard terrace or semi in poor decorative order and perhaps with minor construction flaws. It should be in an area of high rental demand and provide a good yield.  If you are looking to flip,

i.e. buy, do up and sell on, the property should generate at least £10k profit when refurbished. The benefits of low-end properties are that they generate cash flow and improve your financial profile. They may well provide you with a model that can be repeated. For example, you buy a run-down two bed terrace in an area where  three  beds are in  high  rental  demand. By reconfiguring  the  layout