Unconventional Investing. Why Buying Condos In Litigation Can Be A Great Investment.
“Invest at the point of maximum pessimism” — John Templeton
This is one of my favorite quotes. I read that in a book during 2010–2011 when the economy was coming apart. Real estate prices droped 30% in a year. I was young and just starting out. That quote had a big effect on me.
I look back now in 2015 and see how right that was. The market is up 30–40% in Minneapolis since I read that quote. I go through about 20–30 condos a week in Minneapolis and every once in a while a building is in litigation. Lenders won’t lend on it, buyers don’t want to buy, and as a result the demand and price for the unit goes down.
I see this as opportunity. If you do your due dillengence and the price is right you might be able to score a great deal. I have seen this happen in Hotel Ivy, The Sexton, and Groveland Terrence.
So if you find a condo that is in litigation don’t rule it out. Do some investigating and see if there is an opporunity there. If you can strike a good price when the pessisism is high, you might be able to gain a bunch of equity when the situation turns around.
But don’t take my word for it.