If you’re ready to get started as a real estate investor in the Chicago area, then you’ll want to be on the lookout for short sales, as these can be amongst the most profitable investment opportunities on the market.
The term “short sale” refers to the sale of a distressed property — that is, a property where the homeowners are behind on mortgage payments and facing foreclosure as a result.
A short sale involves the sale of the property for a price that’s less than what the property owner owes to the bank. So the sale comes up “short” on covering the total amount due to the lender.
The bank must approve a short sale offer before the sale and proceed. Generally, the property owner is released from further obligation to the lender once the short sale is approved.
Short sales are typically performed in a very prompt manner. The haste with which these real estate transactions are performed results in a sale price that’s typically significantly less than the property’s actual market value. Therefore, many investors will purchase short sale properties, which are then re-sold as-is for a profit.
Purchasing short sale properties can be very profitable, especially for those who are involved in flipping and rehabbing. Flipping and rehabbing involves performing repairs and upgrades to the property in order to boost its market value. This increases the profit margin.
When it comes to short sales, the primary risk surrounds the fact that you’re tying up capital in the property, so recovery of your investment funds (and profit) is contingent upon the sale of the home.
If you’re ready to get involved in fix and flips and other real estate investments in Chicago or the surrounding area, you’re invited to complete an investor’s form to get started.
Questions about getting your start in real estate investment and wholesaling? Contact Greg Teele with Teele Enterprises, Inc. at 224.343.6890.