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The best way to find distressed properties is creating a free account with us to get access to a vast inventory of curated properties to meet your investment strategies in your area. Finding the right investment property can be a challenge. As a real estate investment marketplace, New Western offers a vast inventory of curated properties to meet your investment strategies.
Did you know that if you look for distressed property leads, you’ll have an excellent opportunity to find a great deal on a property? Not only that, but with the right repairs and renovations, your great deal can become a profitable deal, and isn’t that the goal of real estate investing?
First and foremost, you’re probably wondering what exactly a distressed property is.
An easy way to describe a distressed property is one that is facing legal or financial distress. This could be because the owner can’t pay the mortgage payments or property taxes, which kick off the foreclosure process, or it could be because of a divorce or probate.
Often times, you can spot a distressed property simply by the way it looks. Some physical signs of distress include the following:
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Distressed properties can be an excellent opportunity for investors to buy real estate at a price that’s lower than its actual market value, possibly resulting in significant returns once the property is renovated and is either rented out or sold. It’s a win-win situation: the distressed property owner can get their finances in order and avoid foreclosure, and the investor can make a profit.
As with any other investment strategy, it’s good to know the pros and cons of buying distressed homes.
| Pros of Buying Distressed Homes | Cons of Buying Distressed Homes |
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You can learn more about distressed properties in our in-depth guide: “Understanding the Ins and Outs of Locating Distressed Homes for Sale.”
When looking for leads on distressed properties, you have several options to consider. Let’s take a look at the top four investment approaches used by savvy investors.
One effective method of finding distressed homes is to start building connections with real estate agents in the area. Many times, they have access to an extensive database of properties called the MLS (multiple listing service) that they can search through to find potential leads.
The MLS can give agents insights about properties for sale, but they can also see what properties are coming soon, foreclosed homes, homes in pre – foreclosure, and even tax records–among other things.
Of course, you’ll want to do your homework to find an agent in your area who specializes in real estate investments or properties in crisis. They should have an extensive knowledge of the local real estate market and neighborhoods.
When you find an agent you’d like to work with, reach out and let them know that you’re eager to find foreclosed homes. Say exactly what you’re looking for, like the location, size, price, and condition of the place you want.
You can get a lot of information on foreclosed homes on real estate websites and platforms online. There are often built-in search filters on these platforms that can help you find items that are relevant to you.
Some of the most known real estate sites include Zillow, Realtor.com, and Foreclosure.com, but there are also other lesser-known distressed property websites, apps, and platforms. These include HUDHomesUSA.org, HomePath By Fannie Mae, IRS Seizures, to name a few.
When you’re using these databases, you can cull the list of properties by using search filters. While the sites may not have the same filters, most typically have “foreclosure,” “short sale,” or “bank-owned.” That will whittle down the list of homes so that it’ll be easier find possible distressed opportunities–even those in desirable neighborhoods.
When you’re looking through the descriptions, sometimes they’ll use words or phrases that subtly hints that the property is in distress by using terminology like, “needs some TLC,” “motivated seller,” “cash buyer welcome,” and so on. Also, take note of the photographs used in the listing. Sometimes there will be a one or two photos, or they’ll clearly show the property is in trouble.
You can find useful information about distressed homes by looking through public records and court notices to find dates for bank auctions or sheriff’s sales. It won’t be easy and it may take you some time before finding a potential seller because you’ll have to look through property records and court notices about things like tax liens, foreclosures, and other debts.
You can get public information by going to the courthouse or county clerk’s office in your area. You’ll want to search for property tax liens, foreclosure filings, and other county court records that show obvious indicators of distress. You’ll then want to jot down the property’s address, as well as any contact information provided so that you can look into them more thoroughly.
Note: If you’re using an online source for free public records like the federal government’s PACER (Public Access to Court Electronic Records), SearchQuarry or PINow, be aware that the data isn’t centralized and it may not be complete. That said, it may still a good place to start.
Seasoned investors frequently hobnob with professionals in the real estate business, and so should you. By going to industry events, you’ll have the chance to meet other real estate professionals who might be able to share some details about motivated sellers who may have distressed assets they want to sell quickly.
Along with networking in person with local real estate professionals and business insiders, there’s no shortage of Facebook groups for real estate investors you can join. Of course, you can’t forget other social media sites like LinkedIn, Instagram, Twitter, and yes, even TikTok!
Whether you’re looking to invest in commercial properties or if you want to stick to residential properties, you can bet that there are investing groups online and in person that can help you get reliable real estate leads.
When it comes to finding leads for distressed properties, it is necessary to employ a variety of tactics, including utilizing local real estate agents, using the power of online tools, looking through public records, as well as successfully networking with experienced investors.
By following these strategies, you’ll be well on your way to finding distressed property leads and turning them into lucrative investment opportunities.
Disclaimer: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.
