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Finding Distressed Properties and Motivated Sellers

As a real estate investor, I’m always on the lookout for underpriced properties. It’s one of the best ways I’ve found to ensure I make money on my real estate deals. When I can buy a property for less than what I believe it to be worth, that allows me more flexibility in what I do with it. I may be able to rent it for a positive cash flow, or I may be able to quickly rehab it and flip it for a profit. The key though, is in finding these underpriced gems, which is not always easy.

One method I’ve used successfully is to concentrate on finding distressed properties and motivated sellers. A distressed property is one in which the owner is close to losing the property, or is otherwise unable to maintain it. This can make for a very motivated seller. The idea when you do find a situation like this is to help the owner solve his problem. This can mean a short sale, or it can involve aquit claim or “subject to” sale. But what it means to you is getting a property for less than what it is worth.

So how do we find distressed properties and motivated sellers? Let me tell you about the 5 ways that I know work:

  1. Driving the ‘hood – One of the most sure-fire ways to find distressed properties is the tried and true method of scouting the neighborhood and looking for clues. Houses that are poorly maintained are a sign of a potential distressed property. Lawns that are neglected or peeling paint can be an indication that the owner can no longer take care of the property.
  2. Hire an expert – Sometimes a Realtor or a specialist in distressed or foreclosure properties can be a good resource. A skilled Realtor will keep their eyes open for distressed properties in the course of their daily routines. They can also verify the ownership details of the property and whether it is in default.
  3. For sale by owner – Some of the best deals I’ve found have come from walking up to a house that has a FSBO sign in the front yard. These are often motivated sellers that can be interested in avoiding foreclosure and saving their credit rating. They can often be very flexible in the kind of offer they are willing to entertain.
  4. The Internet – It seems obvious, but there is no better place for locating a high volume of distressed properties. You can search lists of distressed properties that have been compiled by others in the business. The problem with this type of research is that the information is often outdated and/or incorrect. Be careful when going this route. There are some exceptional websites out there that cater to this exact niche but make sure to do your research and verify the authenticity of the information.
  5. Advertise – We’ve all seen the hand written signs, “I buy houses, any condition.” While this is a crude way to do it, the idea of having motivated sellers come to you is a good one. Step it up a notch by advertising in local papers or printing up some business cards. You may want to consider Internet advertising and promoting yourself as a problem solver for people who are at risk of losing their homes.

Whatever methods work for you, remember to treat the owners of distressed properties with respect. They are likely going through a hard time and you may be their last hope. Try to structure any deal like this as a win-win. Solve their problem and you’ll both likely come out ahead.

For more information on how you can escape the rat race for good and create lasting, generational wealth with real estate, download my FREE e-book, “How to Find Underpriced Properties: Secrets for Creating Wealth with Real Estate in ANY Economy.” Get your copy at:

About Author

Andy Werner
Andrew J Warner

Real Estate and investing have been my passion for over 15 years. I love transforming a broken down distressed property into something that is fresh, updated and modern. My real estate investing career began in foreclosures, but I have also built new, worked direct with sellers, apartments, condo conversions, rentals, wholesale, commercial etc.

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