Distressed properties have motivated sellers looking to offload their real estate because they can not afford to maintain them and are at risk of foreclosure for non-payment of the mortgage and/or taxes. These types of homes are often sold a below-market rates and in need of repair, but you have to find them first! For efficiency, first identify and research an area want to purchase.
Identify an Area
1. Nearby schools and playgrounds
2. Easy access to grocery stores
3. Well-maintained streets
4. Low crime rate
5. Within an easy distance to you
Finding the Right Property
When looking for distressed properties, find the ones that best suit your established budget and experience. Below is a list of resources from a 2020 Bigger Pockets article by Drew Sygit. It’s a few of years old, but the information still holds up today.
1. Properties with delinquent taxes – Most county or city will have a tax assessors website with a list of tax-delinquent properties.
2. Properties with delinquent mortgages – You can find an official publication by googling “County Name” Legal Notices. There are also websites with reliable listings: RealtyTrac.com, Foreclosure.com and HUD.gov. RealtyTrac.com and Foreclosure.com for paid services.
3. Properties that are tied up in court through bankruptcy or divorce and need to be sold – Check your county’s legal notices. Every county is required to announce when and where properties are being auctioned.
4. Properties in probate that need to be sold to settle an estate – These properties are a little more tricky and have deposit requirements that you may not get back. There are services that you can buy to help locate these properties. Drew Sygit’s article lists two: SuccessorsData.com and USProbateLeads.com.
5. REO/bank-owned properties – Properties have been foreclosed on, are vacant, and sold as is, could be a gamble. Sources for finding bank-owned properties include: Real estate agents, bank websites and fee-based sites such as HUDforeclosed.com.
6. Government-0wned properties – These are homes that were insured by HUD, Freddie Mac, or Fannie Mae and have failed. Drew Sygit recommends starting your research at HUD Homes for Sale .
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