In order to get the best return on investment for a distressed real estate purchase one must consider many factors. These details include but are not limited to, the current and future state of the housing market for a given area, the cost of construction and related services, the median rental, lease or sale prices, the property taxes, the title cost and insurance, as well as any legal implications of the purchase and subsequent sale, lease or rental. Most importantly one must pose the question, “What is it that I hope to achieve from investing in a distressed property?”
Provided the sum of $150,000 I would choose to invest in the Las Vegas housing market, because it is where I currently reside, and second because it is one of the hardest hit by the economic downturn and therefore has vast inventory from which to choose. Despite the toll of unemployment and its consequential effect on the market, Las Vegas has a steady group of resident and visitor that will undoubtedly rebound in the coming years thereby making it a sound venture.
The first order of business is to ally with a professional real estate broker that has comprehensive knowledge of the Vegas market, Nevada real estate laws, and some experience with auction, foreclosure, and distressed properties. To fill this role I would choose from a stable of trusted family members that are licensed Nevada realtors whom have no vested interest in the distressed properties.
The next step in the strategy would be to research and retain the services of a qualified home inspector for thorough analysis and evaluation of the realty. Following which I would determine three to four contractors to call upon for bids on repairs and upgrades for the homes. Finally, I would consult a certified accountant, lender, title company and real estate lawyer to secure any final details or potential oversights before initiating the search.
In searching and procuring real estate I would seek out single family dwellings such as townhomes, condos, duplexes or free standing homes approximately 1,000-2,000 square feet with some sort of outdoor space and preferably with community amenities such as pool, fitness room, garage etc. I would concentrate the search in west Las Vegas as it is among the most desirable, with quality schools and has great access to freeways shopping and many other sought-after activities.
Once the property is found, I would consider the extent of damages, repairs, and upgrades needed to raise the dwelling to respectable standard for living. Special considerations would be taken to assure structural integrity first and...