Distressed Properties

My old friend Allan Thompson used to say, “There is no such thing as a bad property, just untimely ownership.” I have been thinking lately that maybe these times have proven him wrong. Maybe not. The old adage about real estate, “Time heals all wounds” Seems to no longer apply. Maybe it does. We just don’t know yet.

In most cases, what are called “troubled assets”, really refers to troubled ownership. When foreclosure proceedings are filed they are not filed on a piece of dirt or a building. They are filed on an owner who did not make payments on that dirt. A property will always sell for what it is worth. Some properties are not worth much. Will they ever be worth what the owner paid for them? What if the owner had what they are worth now? Could that owner buy something better with that money and make more money in the long run?

The situation is similar to the stock market. Wachovia stock dropped in value until it became almost worthless. People who held it got about 1 share of Wells Fargo for every 5 shares of Wachovia. How long will it take for that stock to be worth what the Wachovia stock would have sold for even a week before the merger was declared? What will the yield be over that period of time? Sometimes it is good to look at our untimely ownerships. Sometimes we may be better off letting other people keep their untimely ownerships.

David Segrest is a REALTOR® in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com He is also a contributor on Argentina to: http://realestatebloginternational.com/