Ways of Finding and Buying Distressed Properties

Time is money. You need to know how to find the specific information that will lead you to investment opportunities that you can use.

Here are 11 resources you can utilize to identify lucrative distressed properties near you to locate the premier opportunities in your market.

For many, the easiest way to find distressed homes might be browsing distressed property websites and connecting with sellers in just a couple of clicks.

Below, we suggest six online resources and tools that can help you find distressed properties without leaving your home or office.

#1 HouseCashin Investment Property Marketplace

Using HouseCashin investment property marketplace is perhaps the easiest and overall the best way to find distressed properties for wholesaling, flipping, rental and other real estate investing strategies.

HouseCashin investment property marketplace is a one-of-a-kind online search engine for off-market properties.

It lists properties posted by owners in various distressed situations such as income loss, divorce, delinquent taxes, pre-foreclosure, probate and more.

There are also distressed properties listed by wholesalers. So if you are a wholesaler, you can find and put motivated sellers under contract and then locate an end buyer (investor) on the same marketplace.

You can easily view distressed homes in your target area by using filters. Enter your location and choose one or more deal types such as:

• Behind on mortgage payments
• Delinquent property taxes
• Tax lien certificates
• Government owned (HUD)
• Bank owned
• Short sales

A listing will have a tag indicating whether it’s a FSBO property, wholesale deal or agent-assisted listing.

For FSBO deals, to be able to view contact information of the owner, you will need to purchase a subscription plan.

Visit the HouseCashin investment property marketplace to learn more about it.

#2 MLS

Now, let’s discuss how to find distressed properties on MLS, as it’s the most basic tool for many investors.

The Multiple Listing Service (MLS) is a private database of information on residential properties for sale. Your local MLS is probably owned by the local or regional Board of Realtors or a similar organization.

To access the MLS, you will need to be a licensed agent and possibly a Realtor. A Realtor is a licensed real estate agent who is a member of the National Association of Realtors.

If you are not a real estate licensee, there is another way that you can get pertinent MLS data that helps you locate distressed properties.

Investors starting their careers should consider associating with a licensed agent. They can not only help them identify distressed properties, but they can also place their listing on the MLS when it’s time to flip.

In order to generate repeat business from builders or investors, many real estate agents and real estate brokerage firms will strike a deal on commissions.

#3 Home Listing Websites

Websites like Zillow and Realtor.com can help you access enough MLS data to help you identify distressed properties for successful investments.

A lot of their information comes from the various local MLS databases. This includes information such as foreclosures, FSBOs, and days on market.

Be aware that the seller can opt out of placing their property on these websites in some states.

Some boards have set up their own service to sell information directly to the public. These services don’t provide all the MLS data, but they include the critical information you need.

#4 Government Websites

Investors always want to know, “how do you find distressed properties for free?”. This method is free.

When learning how to find distressed homes, remember that some sellers are the people or entities that loaned or guaranteed the loans made to the homeowner.

When the homeowner stops making loan payments, the lender or guarantor has the right to sell the collateral to reimburse themselves. This includes several government entities.

The US government provides information to the public, including a distressed property list of foreclosed homes whose owners defaulted on mortgage loans that were issued, purchased, or guaranteed by the federal government.

In addition, federal law enforcement agencies are responsible for seizing and disposing of assets that were acquired in court-ordered asset forfeitures. These assets often include residential real estate.

A prepared list of distressed properties can be a big help to real estate investors in locating opportunities and evaluating prospective investment markets.

Residential properties purchased with HUD or FHA insured loans are sometimes foreclosed on by HUD for default by the borrowers.

The Veterans Administration (VA) and the US Department of Agriculture (USDA) also have residential mortgage loan programs.

To find HUD multifamily property foreclosures for sale, go to the HUD website. Here you can sign up for their regular mailing list of available properties.

You can find single-family homes with FHA loans that HUD is foreclosing on by visiting this web page.

The Federal Housing Finance Agency (FHFA) oversees the Government Sponsored Enterprises (GSE) that support the US mortgage markets: Freddie Mac, Fannie Mae, and the Federal Home Loan Bank.

FHFA sometimes forecloses on properties that secure loans purchased by these entities. You can find these properties by going to this page.

For convenient one-stop shopping for government foreclosures, go to hud.gov and enter “houses for sale” in the search window.

This takes you to a list of links. Click on the one for “Houses For Sale.”

You’ll be directed to sites that detail foreclosures by HUD/FHA, VA, FDIC, USDA, Fannie Mae, Freddie Mac, IRS, US Customs, US Marshall’s Service, and the General Services Administration.

#5 Banks’ Websites

When a bank forecloses on a home and doesn’t sell it at auction, the property is kept on their books as Real Estate Owned (REO) property.

These properties are liabilities for the bank, and they are eager to get rid of them.

Some banks show their REO offerings on their websites. Today, some banks set up a separate site for this purpose. Here are the top U.S. banks and their REO pages/sites:

• Chase
• Bank of America
• Wells Fargo
• Citibank

US Bank – They do not participate in the listing or sale of REO properties, preferring to work through “real estate disposition vendors.”

To find REO properties for other banks in your area, search online for that bank’s name followed by REO (example: chase reo). This often shows you their REO site or website page.

Lastly, you will have to persuade the bank that you qualify as a buyer. Read advice from our experts who discuss how to get foreclosure listings from banks in our article.

#6 CRMs

CRM stands for Customer Relationship Management. CRM software and online platforms provide real estate investors with market analytics, lead tracking, prospect communication, contact follow-up, and more.

Some CRM providers offer market data that can lead you to suitable investment properties. Much of this data comes from the local MLS as well as public records and third-party data sources.

Some CRMs work as lead generation sources for real estate investors. This service may be included in a basic or more advanced payment plan.

To find the best CRM for your needs, review our guide to the best CRM software for real estate investors.

How to Find Distressed Properties Offline

#7 Tax and Lender Foreclosure Auctions

Research the national and local real estate lenders that are active in your area to find out what auction firm they use for foreclosures.

If you contact those firms, you can usually get on an email or mailing list to be notified of upcoming auctions.

It’s not unusual for the lender to be the high bidder at auction. They then sell the property for at least enough to make themselves whole.

When you get to know the local banks’ REO managers, you can probably get a call from them when they have something you might be interested in.

Private firms like CWS Marketing often handle national government tax lien foreclosure. They might also notify you of scheduled foreclosures.

Additionally, think about developing a relationship with your local property tax attorneys and property tax protest companies. They could send you leads when their client’s property is going into foreclosure.

#8 Driving for Dollars

Investors should regularly spend time in their markets. You’d be surprised at the opportunities you can find ahead of your competition by consistently driving your market.

One thing you’ll see periodically is foreclosure notices that are posted on properties being sold.

Moving vans or rental trucks at a house with no For Sale/Sold sign in the yard may mean that they are keeping the house as a rental property.

But it could also mean that they have to move without selling the home because their lender has taken it over.

Look for properties where the home and the landscaping haven’t been kept up with. Other clues are a mailbox packed with junk mail that hasn’t been removed and multiple notices stuck to the door.

Although this method is time consuming, it’s one of the popular ways of finding motivated distressed home seller leads for investors and wholesalers.

#9 Networking

Regular networking is critical to a sustainable investment business. Your network should include real estate attorneys, real estate CPAs, mortgage brokers and lenders, short sale processors, and home appraisers.

These people are a good source of information and referrals that can keep you on top of the trends in your markets.

Find opportunities to benefit them with leads that help their business, and they’ll respond with tips that help you.

#10 Real Estate Wholesalers

A wholesaler’s strategy involves putting a property under contract at a price that works for investors like you. Don’t be put off because they charge a fee for their services.

Outsourcing your property search to wholesalers can give your investment business a repeating pipeline of opportunities. They are professionals who know how to generate motivated seller leads on autopilot.

Real estate wholesalers in your area are an excellent addition to your network of real estate professionals. They may be able to refer you to other resources that can help your business.

An alternative to wholesalers is employing real estate bird dogs. They specialize in locating distressed properties and referring them to you at a fee, without entering a purchase contract with the owner.

#11 Public Records

Here is another method of how to find free motivated seller leads.

The local county’s website will provide a list of properties being sold for delinquent county property taxes.

Many of them now have interactive maps that show the location of each foreclosed property.

Neighborhoods with multiple foreclosed properties may indicate an area on the way down or a good investment asset hunting ground.

If not, search for notices of foreclosures. These might be called a Notice of Sale or Notice of Default.

One good thing about public records is that they contain historical information on the property and its value.