Distressed real estate assets can be a great investment for a seasoned commercial real estate investor. However, if you are not a seasoned real estate investor, a distressed commercial real estate investment may conclude to a potential financial disaster. Some fractured condo projects are just that, distressed assets that may have been incomplete by the developer. Possible explanations why the development was incomplete:
- Real Estate Meltdown
- The bank stopped funding the project
- No qualified private money or commercial hard money bridge loan
- The developer went bankrupt
Acquiring a distressed commercial real estate asset like a fractured condo development requires a plan for an exit strategy such as:
- Buy and hold
- Repair and Sell (Flip)
- Condo Conversion
To begin with, a seasoned commercial real estate investor requires great personal credit, strong cash assets, a good real estate attorney, a budget and a sharp real estate agent to assist with the distressed commercial real estate transaction. The commercial real estate investor should ask themselves will this projected cash flow work? Can this project become a possible condo conversion?
Not all fractured condos are good investments; real estate investors should consider the demographics of the area besides assuming the distressed asset will have a fast resale or fast rental occupancy. If you want to invest conservatively with fractured condos, purchase fractured condos that are near your area, do not purchase distressed real estate assets that are in unstable markets.
Discounted distressed commercial real estate doesn’t necessarily result in a good investment; it may turn out to be to a costly loss and a huge nightmare for you and the lender.
For more information on how we can best serve your South Florida Fractured Condos, Southwest Florida Fractured Condos and the Great State of Florida Fractured Condo loan requests, please fill out the online contact form or give us a call at 855.477.9007. Read what people have to say about First Pro Capital on our Testimonials page.
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