The old real estate 101 concept that advocates buying the worst home in the best area is still a sound method to use for the homebuyer looking for upside property value potential. Another very valid concept is to buy the home with a home drainage problem and a fearful seller.
A seller that just wants to bail out. A seller that does not have the money to correct the home drainage problems, and therefore probably cannot sell the home to anyone requiring a loan.
Big price breaks are common in this type of buyers market, and on these types of properties. For the mature investor this does not present so much a homebuyers problem as an opportunity. A property with a solved home drainage problem is a value added feature, not the scarlet letter. Not the evidence of something gone wrong, but of some gone right. A value added capital improvement.
Look for those types of problem properties. Those little gems are out there just waiting to turn you a fine profit or make you a great home. They come in many shapes and sizes, from recently constructed street of dreams type of homes to small homes on fantastic acres or lots.
The market for home buyers has changed for the better recently, and many homes will be coming on the market in the next 2 years as a result of the growing number of properties with drainage problems. Over leveraged sellers that are stuck are a dime a dozen at this point.
While this scenario is sad to be sure for the present homeowners, you did not make it that way. Help these sellers “bail out” prior to their banks foreclosing on the homes, ruining their credit status, and sticking those properties away in their “Reo,” real estate owned departments while the “former owners” get nailed with foreclosure, judgements, credit losses, and the loss of all equity.
Find one of these homes, and you may have found just the 5 figure profit picture that you were looking for.
The sellers stay out of foreclosure, get some money out of the home, and you get a property with considerable upside in property value. It is a win win deal.
Other than on a qualifying exchange of some sort, or all cash, no loans, the property has little chance of being marketed anywhere close to a value that a realtor would come up with using a comparative market analysis, for example.
The next step is to read my books to determine how to assess the groundwater problems and how to solve them by hiring a professional home drainage contractor.