how do you make big money in distressed properties, i would like to learn this, would you recomend it?

Answer 1

'If you want to become a real estate investor, find a "fixer-upper" owned by an anxious seller. Finding distressed houses at bargain prices, fixing them up, and then selling them on a consistent basis can make you a multi-millionaire. '

Answer 2

Have you been watching TV infomercials? If buying and rehabbing real estate was such a good deal, those people advertising it would be out doing it instead of selling training courses.
Unless you can do all of the work yourself, and don't mind working for free, I don't recommend it.
First, you have to find a distressed property that is not in a distressed neighborhood. Remember the real estate business mantra: Location, location, location.
Second, if you find one, you have to compete with others who want to do the same thing, so you will end up paying "top distressed dollar."
Third, you will have trouble getting a mortgage (because the property is distressed). Or you will have to pay cash.
Fourth, you have to spend money on labor and materials to do the rehab. Either you have to find a construction loan or pay more out more cash.
Fifth, if you do a rehab, you have to find a buyer willing to pay the original purchase amount + mortgage interest + the amount of the construction loan + interest on the loan + commission to a real estate broker + an allowance for your time spent (your labor is worth something and work on this project takes you away from earnings on any job you may have) + an allowance for profit on your investment.
One of the reasons slum lords become slum lords is because of the above. They buy rental properties to earn a profit, then it becomes difficult to do.

Answer 3

For distressed properties, you first have to find them (which is easy), then you have to locate the owner, then you have to determine the value of the property (including land) as if the property and land were used in the best possible way. Then you have to subtract the purchase price, the rehab and/or tear down and new construction costs, holding cost (taxes, etc) and selling cost. If you can achieve a profit, then go for it. There are people who just focus on the house, but the land it sits on is just as valuable.

I personally don't like doing rehabs. I rather sell my contracts to people who do them. In which case, you have to locate them, determine value (as stated above) and tie up the property with the owner. You then sell your contract to another investor.

Regards