Distress Resolution Cost Calculator

Clearing distressed property has hidden cost layers. This calculator rolls up the full resolution bill.

Asset book value

Distressed discount %

Legal & receiver fees

Broker fee %

Carry months

Monthly carry

Total resolution cost

$604,350

Net proceeds

$1,245,650

Recovery %

67.33%

How the math works

Resolution cost = discount + legal + broker fee + carry. Net proceeds = gross sale − broker − legal − carry.

Pursue pre-foreclosure workout, deed-in-lieu, or short sale before judicial foreclosure. Full foreclosure costs 20-40% of asset value once carry and legal run their course — structured workouts routinely recover 10-15 percentage points more.

How to Use

Enter asset book value.
Enter discount % (distressed haircut).
Enter legal and receiver fees.
Enter broker fee %.
Enter carry months and monthly carry.
Read total resolution cost.

Frequently Asked Questions

Distressed haircut?

Foreclosure or forced sale typically realizes 70-85% of fair market value. REO inventory 75-90%. Pre-foreclosure workout 85-95%. Court-supervised receiver sale 65-80%. Each process has its own value friction.

Legal and receiver?

Foreclosure attorney $8-25k. Judicial foreclosure $15-60k. Receiver fees $15-100k+ for operating receivership. Bankruptcy workout $30-150k for meaningful loan sizes. Budget the full stack, not just filing fees.

Carry burn?

Distressed carry is higher than performing: forced-placed insurance (2-3x normal), elevated property tax (penalty/interest), vacancy compliance, enhanced security. Budget 125-175% of normal carry during distress.

How do institutional LPs use this?

Institutional LPs expect sensitivity tables at every underwriting — base case plus at least two stress scenarios. Submit this output alongside traditional pro formas. LPs read quickly for two things: does the base case clear target IRR, and does the stress case produce positive equity multiple. If both yes, deal is investable. If stress goes negative, more equity or a lower purchase price is needed.