The abandoned house on the corner… the condemned house sitting on a neighborhood block…the squatter house.
Different names, different states of distress, no doubt you have seen these types of homes or properties about town – distressed properties.
There’s a lot of potential and value in these types of properties, though their exteriors may not immediately signal that outlook.
But what are distressed properties? More importantly, how do you find them?
What Distressed Properties Are
Put simply, a “distressed property” is a property that’s in a state of distress, either due to a homeowner’s situation or the property’s condition.
The latter is what we would consider distressed, though I wouldn’t call them distressed; the better term would be properties in their original condition or properties that need work.
Original condition properties are great opportunities for real estate investors, especially wholesalers because these homes have potential. By that, I mean, these properties can be renovated to be productive aspects of their neighborhoods.
How Do You Find Distressed Properties?
Here’s the thing about properties that need work – they can often be found while on your regular drive.
As mentioned above, homes that have been abandoned, are condemned, have code violations, vacant properties, etc. Other signs of a property that needs work:
Broken doors or windows
Mail pilling up
Windows/doors that are boarded up
In pre-foreclosure or foreclosure
Many of these properties might be under the control of the city you’re located in, though there may be some that are controlled by the original homeowner. Finding these types of properties isn’t as hard as you would think.
Next to being able to physically view a property that needs work, using public records is one of the easiest and fastest ways to find them. Public records always hold information about pre-foreclosures, foreclosures, default notices, trustee sales, and others so you can reach out to the contact owner.
My favorite way to get information on various property types, reaching out to real estate agents and letting them know that you’re interested in off-market, pre-foreclosure, foreclosure, and original condition is one of the best ways to not only find properties, but build up your relationships.
You can find a few original condition properties on the MLS, Zillow, Redfin, and other online sources. These are usually listed as ‘fixer uppers’ or ‘need work’ properties, which will show on a map.
What about Distressed Situations?
While distressed situations are different from distressed properties, there is some overlap, like in the case of foreclosures.
Distressed situations are circumstances where homeowners have an event or challenge that changes their property situation. This includes events like:
Death in the family
These situations can lead to homes that turn into those that need work, often because a homeowner doesn’t have the financial resources to do repairs on their own. In both of these cases, you may be able to use a short sale, where a property owner or homeowner will sell their property at a lower cost than the outstanding mortgage.
This allows for the property to be sold fairly quickly and can give a homeowner the finances needed for other endeavors.
If you’ve found a pre-foreclosure and wondering what the best solution is, check out the video below:
Wholesalers can provide a solution to abandoned or vacant homes that are just sitting on a lot for extended amounts of time. The potential in these properties can elevate the neighborhood where they’re found or even provide additional housing for new residents.
Now you know more about properties that need work, how to find them, and situations that might lead to their condition.
If you’re still having issues trying to find these types of properties or even getting deals done effectively, why are you struggling? Come join us at AstroFlipping and let’s do some deals!