A real estate broker once mentioned that the term “distressed property” applies more to the owners than the actual physical condition of the house. According to experts like Jeff Barcy, the property itself might be in top excellent condition but circumstance have forced the owners to sell the property at severely low bargain prices – or risk losing it all due to foreclosure.

In a hot real estate market, distressed properties often do not last long and would be gobbled up by realtors or investors the moment a flag is raised that the property is for sale. According to Jeff Barcy,  this may not be the case with the current economic situation, bringing the prices of such properties much lower than what was previously anticipated. This would result to higher profit margins for investors who will be dealing with much lesser competitors in the market.

Finding a distressed property that is being sold by the owner himself would provide you with the most bargains according to Jeff Barcy. For one thing, these owners are racing against time to dispose of these properties and would usually grab the first real offers accorded to them, even though they would be letting go of the properties at prices much lower than the average market value.

The real estate market bubble burst that experts predicted and feared a few years ago eventually occurred and ushered in the new economic crisis the nation have not know since the Great Depression of the 1920s. Right now, the country is still reeling from the effects of the global financial crisis and the real estate industry suffered the brunt of this problem, resulting to a rash of foreclosures never before seen in recent history.

But not all opportunities are lost even with this very sour housing market. According to experts like Jeff Barcy, the opportunities are still there but you must be more creative in looking for ways to gain from this predicament. As things really get tighter, people selling their homes, particularly with distressed luxury properties, all sorts of incentives are offered right now just to entice investors to make the purchase.

According to Jeff Barcy,  aside from the already tremendous discounts that investors can gain in purchasing these distressed properties, owners are offering a wide variety of incentives: from even more discounts if the property is bought within a certain timeframe, to strange incentives like round-trip airfares, Vespa scooters or even a month of professional massages – just to make the sale.

It is still unknown for how long this real estate slump will continue, but experts like Jeff Barcy is saying that investors should look into the opportunity made available with distressed properties and understand the great potential for venturing into this market – even beyond what these bizarre incentives can offer.

The question that would come to mind would why should a real estate investor focus on distressed properties. According to Jeff Barcy, the opportunities in the distressed and foreclosed property niche are huge right now and continue to grow at a very rapid pace. Sadly, this was spurred by the tremendous increase of foreclosure rates brought about by the global financial crisis and which is clearly evident in hard-hit states like California, Nevada and Florida.

For real estate investors, focusing on distressed properties could be very profitable due to its unique nature, allowing investors to work on distressed luxury properties minus the traditional risk that such properties would normally entail during normal mortgage transactions. According to Jeff Barcy, lenders now are more flexible than ever in negotiating distressed luxury properties as most definitely do not want to retain or hold on to these properties for any while longer.

The current mortgage marketplace is filled right now with foreclosures as well as distressed properties that pose excellent opportunities for investors. Aside from the lower risk, Jeff Barcy says that the amount of investment required is much lower than what it would normally be under normal circumstances. Aside from that, transactions would be faster and much easier as you will be dealing with sellers that are fully motivated to let go of these distressed properties. Truly, a gold mine is waiting for real estate investors in luxury distressed properties.

People who think that the term pre-foreclosure is just the same thing as a foreclosed property are not actually familiar with the term and most likely don’t know the advantages of investing in pre-foreclosures. According to Jeff Barcy, a pre-foreclosure is a property that is already on the final stages of the foreclosure process before it is taken back by the lending agency or bank. The owner still has control of the property but is just a shy away of being repossessed by the bank.

A property investor can find several benefits in investing their money in pre-foreclosure. Investors miss out on these opportunities simply because they don’t how and where to look for them. According to Jeff Barcy, the number one benefit an investor can get is the lower prices associated with such a property and would reach to more than 50% off the market value. The owner is desperate in selling the house before the bank takes it away and would be very much open to any offers that they will receive from investors.

Aside from the obvious bargain in such a sale, the investor will deal directly with the owner and not with the bank or a lender. They still have control of the property and will most likely not turn down any offer or risk losing everything. With a pre-foreclosure sale, they can at least get back some of their money invested in the property. Jeff Barcy says that investors will also face less competition with pre-foreclosures as they would normally encounter with foreclosed properties. This will give them a chance of getting a great price from this deal.

To find a pre-foreclosure, you can look for them in the same manner as finding foreclosed properties for sale – you just have to make contact directly to confirm if the property is still in pre-foreclosure stage. So, when looking for properties to invest in, don’t overlook pre-foreclosure properties as they can really be profitable.

Before investors can understand and appreciate the value of investing in distressed properties, they must first understand what the term distressed property actually constitute. According to Jeff Barcy, the recent global financial crisis has delivered a great blow to the real estate industry, but there are actually two ways for a particular property to become distressed.

The first and most common reason is when the property owner gets in debt over the existing property that is greater that what that particular property is valued in the market today. At first, the property may not be immediately classified as distressed but it will already place that piece of real estate on the watch list. It’s not until a notice of default or a notice of sale will the property be categorized as a distressed asset.

The second reason is not about debt or financing difficulties but rather on the condition of the environment where the property is located. This usually occurs with commercial properties. According to Jeff Barcy, the property itself might be fully owned by the responsible party nor have they defaulted on their mortgage, however it might be located in a blighted area heavily affected by foreclosures with little or no hope of tenancy may occur to occupy the vacancy the property is experiencing.

How grim the outlook can be, there are still lots of opportunities present with these distressed properties. For one thing, investors can be assured that there are still robust insurance marketplaces available that cater to distressed properties depending on the actual condition they are in. Key loss and risk management strategies can be implemented to minimize the potential impact of risks tied in with distressed property. Jeff Barcy says it’s just a matter of understanding where to look for opportunities in distressed properties.  

The state of the real estate industry is still depressed and industry experts say that up to $1.4 trillion in loans still needs refinancing until the year 2014, with over 60% of these already under water or where the value of the asset has already gone below the actual loan value. But despite this bleak scenario, Jeff Barcy says that sales of distressed properties are growing in momentum and has in fact accounted for up to 40 percent of all recent real estate deals.

Jeff Barcy has identified several advantages with investing in distressed properties, and many investors seem to be taking the cue with purchases climbing up by 3.7 percent with at least 35 percent of transactions paid through an all-cash deal. But despite the enormous investment opportunities distressed properties offer investors, it is not without the possibility of potential liabilities that buyers may face. 

According to Jeff Barcy the benefits far outweigh the risks, most of which can be mitigated by employing sound risk management to overcome any potential pitfalls that such purchases of distressed properties may incur. Buyers should adopt these strategies and get the best deals with their distressed property purchases.

Although the country and the rest of the world are slowly recovering from the global economic meltdown, the current economic scenario is still tight for the real estate industry. New developments and constructions are either cancelled or shelved due to the prevalent credit crunch imposed by financial institutions. But for Jeff Barcy and the rest of the team at Ridgeback Partners, investors should turn their focus and find great value from distressed properties.

Jeff Barcy has lined up several advantages to investing in distressed real estate that would easily overcome the potential risks that are holding back investors. Most lenders and financial institutions would want to cash-out from foreclosed properties sold in auctions the sooner as it can be possible, prompting most to significantly reduce prices much, much lower than prevailing market prices. Investors should grab this opportunity which can grow more substantially if investors pursue bulk acquisitions.

Investing in distressed properties can be a lucrative opportunity according to Jeff Barcy and as mentioned earlier, the benefits far outweigh the risk. And like any other investment, you can minimize any potential risks and ensure that you are making a safe investment. You can do this by carefully checking out all the legal formalities, titles, and all other pertinent documentations to ensure that a particular property is a sound investment free from all encumbrances.

Finding the fundamental value in investments has always been a trait Jeff Barcy has manifested in all his years of experience in investment banking and finance. Back in his days at Hearthstone Inc, at a period just before the collapse of the real estate market and the global financial crisis, Jeff was already making bold moves in the US housing market while others were still trying to find out what they should do next.

During that time, Jeff Barcy and his team where trying to find agricultural and other non-housing zoned lands, get the necessary approvals that will turn these lands into new communities, and then sell these community-ready lands to willing investors and home builders. There were certain difficulties and risks involved, which made banks and investors avoid such opportunities despite the high potential gains, but Jeff was not fazed by these issues and saw the great fundamental value in all these opportunities.

When the global economic crisis hit and affected the US real estate market heavily resulting in a rash of foreclosures, Jeff Barcy and the rest of the team at Ridgeback Partners are doing what they do best by finding great opportunities in this situation – particularly in the luxury real estate market.