Distressed Property

Real Estate that is under Foreclosure or impending foreclosure because of insufficient income production. See also Workout.

Real estate that is under Foreclosure or impending foreclosure because of insufficient income production.

See Workout.
Example: An Apartment Building is financed with Mortgages that require $25,000 in Annual Debt Service. Because of high vacancies and rising expenses, Net Operating Income drops to $20,000. The owners have ceased making loan payments because their resources are insufficient to pay the Negative Cash Flow. The property is considered distressed property.