Can short sale properties be a boon to buyers who are investing in a place to live, but a risky strategy for the profit oriented investor? Unfortunately, there are no easy answers to these questions, and each individual deal must be considered on its own merits.
In a simple case scenario, a short sale to a buyer who really loves the home, plans to live there for at least several years, and can purchase it at below or close to market price so there is some equity, has made a good deal. Certainly, if it is a nice piece of property in a stable, popular neighborhood, the home will build further equity over time.
A Las Vegas Real Estate Investor however, faces more complex issues when considering a short sale purchase then would a potential home owner, issues that may or may not prove worthy of the time or investment in a given property.
For example, is the property –under current market conditions- considered to be “under water,” meaning that the remaining balance on the mortgage, and/or a lien or liens of one sort or another are greater than the property’s fair market value?
In such a case, the investor would be looking at a property with no equity, so it would appear that there wouldn’t be any motivation to further pursue this deal.
Or would there be? If the investor is determined, the lien holder or holders might possibly be persuaded to release the lien or liens at less than face value. That could be one way of adding some positive equity to the property.
Of course, the lender would additionally have to agree to sell the property to the investor at a mutually agreeable price in order for that deal to make any sense to the investor.
Is a scenario such as this worth the investor’s time and effort, or should he/she be pursuing less complex and more promising deals?
Once again, there are no easy answers. Since there are so many variables to each and every deal, the investor, and his advisory team of Realtor, broker, attorney and CPA must evaluate every transaction on its own individual merits.
Although Las Vegas Short Sales are most often not the pot of gold at the end of the rainbow that some naive investors may think, there can be a decent profit potential in some short sale deals if all the right factors that are advantageous to the investor are in place.
Certainly, knowledgeable Realtors and investors are aware that the real estate “picture” will be constantly changing throughout the year, and no one knows when or what exactly will occur when lenders begin to release a new flood of REO properties to the marketplace before the year’s end.
One thing for sure, there is no doubt that the successful Las Vegas Real Estate Investor in these rapidly changing times will be the one who is flexible, observant, and able to adjust his/her goals to accommodate these changes.
If you have any questions about investing in Las Vegas Real Estate, feel free to give us a call at 702-376-0088.