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Real Estate Investment: 5 factors to look for before buying distressed...

However, there has been stress of cash flows among market makers. With pressure on sales and the Real Estate Act coming into shape, developers are struggling to re-align their business models as per the new norms. On the investor front, a number of them depended heavily on cash components for exiting their resale investments and are now left awry post the drive of demonetization. Given the current market conditions, property buyers are showcased with a range of opportunities across retail and office assets, single residential units, and even entire projects at attractive valuations. Smart property buyers can make the most of this opportunity. Some of the factors to keep in mind while buying a distressed property are as follows: 1. Leverage: With the current market scenario of increasing interest rates, a buyer must not over leverage himself for buying out the distressed asset. Any litigation against the property must be factored in as well. Distressed asset purchases should be done as an informed decision, which should be aligned with the investor’s risk appetite. An inadequately-researched decision of buying a distressed asset can lead to a massive financial setback and, in cases, even legal complications.