Distressed properties are recognized by some kind of problem. These problems generally reside with two aspects of the property i.e., either the property itself or the owner. The problem can be simple, like a high vacancy rate of an apartment complex, or something much larger like the possibility of a property going into foreclosure because the owner cannot make the mortgage payments on time. This can eventually damage a person’s credit if a property is to go into foreclosure.
How do you identify distressed properties? One way is to drive around your community looking for buildings that look vacant, run down, not fully leased, and those that display for sale by owner or FSBO signs. If a property looks like a sore thumb in a nice area, then that is a flag that there might be something wrong. You can go to the county, find out who owns these buildings and send out a letter campaign telling them you wish to purchase the property. Many deals can develop this way, and you can get great prices on properties you didn’t even know would be for sale.
Another way to find distressed properties is to call brokers on listings you find on the internet and simply ask why the owner is selling. You may have to call on quite a few properties, but eventually you will find that gold mine property being offered way below the market rate. With just a few changes that distressed property may be a money generating machine once more! You can even call on brokers to locate and bring you properties with problems that fit your targeted criteria. This strategy of finding distressed properties is a great one, as you can very quickly cut through the many listings that do not fit your criteria.