How to Find Distressed Properties
Sometimes distressed properties have so major repairs that need to be made. That's why driving through a neighborhood to see the properties and personally inspect them is such a key component to finding the right one. If you pay $40k for a home, but need to make $100k in repairs, you might not be making the best investment.
1. Get the addresses of your target properties
Even if a home is going through a foreclosure process right now, the property owner still has rights to the home. Get the address of the distressed property and access the local assessor's information. This will give you a lead to who the home owner is and how to contact them.
2. Contact the home owner directly with an offer
Most people don't like unsolicited offers, but home owners that have a distressed property might be the one exception to this rule. They're often under a lot of stress and praying for a miracle to happen. An offer, even if it is a short sale offer, might give them a little fresh air. Mail any leads that you've found for at least 2 months and be persistent.
3. Let the mailman help you out
No one knows the distressed properties in any given neighborhood better than the mailman. They know which mailboxes are filling up, the houses that have notices on the doors, and where families have issues forwarding addresses. By offering them a reward if you're able to close on a distressed property that they find, you'll have a lot of allies helping you out.
4. Avoid neighborhoods where banks own most of the properties
The whole point of purchasing a distressed property is that you're trying to make money from the deal. If there are a number of bank owned properties in a neighborhood, then that's not likely to happen because the area has essentially died. The best case scenario is to get the one property in a neighborhood that is filled with families and good jobs that are readily available.
5. Let the neighbors know who you are
If there is a distressed property in a neighborhood, the neighbors are going to want something done about it. Many distressed properties are unkempt, looked pretty rough, and that drives down property values. You provide a light at the end of the tunnel where values can be brought up. With your business card in hand, introduce yourself and you'll get plenty of useful information.
6. Leave a note
Sometimes leaving a note on the garage door is the easiest solution. If you've found a property and you're interested in it, then leave your phone number and website on the door and ask if they're interested in selling the property. You might just be surprised by the results.
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