Distressed companies offer a great property buying opportunity

For some distressed businesses a financial struggle can end in bankruptcy and liquidation. It’s a sad tale for those firms that experience it, but it’s a fact of life in the business world.

However, as the old saying goes, one man’s loss is another man’s gain and so it tends to be in the case of company liquidations. In many instances distressed business are offered for sale as a whole ahead of the final nail being hammered into the bankruptcy coffin. There are plenty though, that aren’t appealing enough to tempt a new investor. In most of these cases management companies
are brought in and start separating those companies’ assets to be sold separately to raise the funds required to pay off any debts or to return to shareholders. Why is this interesting? Because what’s often among those assets is property.

Of course, among the larger business recovery service firms they may already have a list of clients ready and waiting to buy up different assets. But, many properties from distressed or bankrupt companies come up for sale at auction at your local auction houses, such as Surelock Network Auctions.

When you look through the catalogue for the upcoming sales, many of you are sure to be able to identify which buildings could be available for sale as part of an asset stripping exercise. But, it might also pay to get ahead of the game. One way of doing this is by looking for early indications of whether or not there are likely to be more or less of these types properties for sale in any given period by keeping an eye on specific news and surveys.

Right now there are a number of reasons to think 2016 might be a tough one for many businesses – and provide more opportunities for investors scouring property auctions for potential investments. Stocks and shares are struggling globally as discussed in a previous blog. And a survey from Red Flag Alert shows that the number of UK business reporting they are in critical financial difficulty rose in the fourth quarter of 2015. UK Chancellor George Osborne has also discussed the “cocktail of threats” the UK is facing this year in a speech a couple of weeks ago.

With this in mind, it might be worthwhile giving us at Surelock Network Auctions a ring, commenting at the bottom of this or any other of our blogs or tweeting us at @KhalidAuctions with your views or to discuss this topic with us. We may be able to give you some insight as to whether we’re expecting to sell more properties from the result of company liquidations this year, and how you should go about registering your interest or going along for a viewing.

The more research and planning you do on a property or the types of properties you’re interested in bidding on at one of our auctions, the more we can help. This could give you a better chance of securing it at or around the price that it’s worth to you.

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