Driving for Dollars: 5 Tips to Easily Find Off-Market Distressed Properties
Whether you are just getting started in real estate investing or have already made dozens of investments over the years, among the most profitable opportunities that investors have access to in today’s market involves distressed properties. Distressed properties are residential homes that are pre-foreclosure, under foreclosure, or controlled directly by the lender.
If you’ve never invested in these types of properties, the main challenge of making this investment is finding the right properties to invest in. While some pre-foreclosure and other distressed homes may be listed on an MLS, many distressed homes are kept off the multiple listing service (MLS) for one reason or another. Here are five tips on how efficiently locate off-market distressed properties.
Real Estate Brokers and Agents
Many real estate brokers and agents know when off-market distressed properties are available because of the pocket listings they have access to. These listings are often exclusive to the agent in question and aren’t listed on an MLS. If you can prove to real estate agents that you’re a legitimate investor, they may give you access to their pocket listings, which could be comprised of several off-market properties.
Contractors can be a great way to find off-market distressed properties since these professionals work directly with property owners. If an owner of a distressed property has requested that a few repairs be made, the contractor may be able to provide you with the owner’s contact info, which would allow you to make an offer that takes the property off their hands.
There are also times when an owner of a distressed property will ask the contractor they’re working with if they know anyone who may be interested in making an offer on the property.
Real Estate Auctions
The easiest way to find off-market distressed properties is by attending real estate auctions, most of which have a high number of distressed properties to select from. Auction websites like Auction.com and RealtyTrac will give you the opportunity to browse distressed homes from your computer.
Any network connections you’ve built up should be able to provide you with information about auctions you can attend. Your county courthouse may also have this information. If you’re specifically looking for foreclosures, these properties can be handled somewhat differently depending on the county you live in.
Since these homes are sold “as-is” at prices that are likely far below market value, it’s highly recommended that you do extensive research into the property before making a bid. Even though foreclosures and other distressed properties are great investment opportunities, the home may be in such poor condition that it is not capable of being salvaged. Keep in mind that each auction has its own bidding procedure.
Practically nothing is more invaluable to your search for distressed properties than networking with other real estate investors. Suppose you personally know other real estate investors who have made numerous investments in the past. In that case, these individuals can give you access to hundreds of distressed properties for you to consider investing in.
Whether their investment hasn’t worked out as planned or your offer would provide them with a higher return than they anticipated, you could offer to purchase one or more of the distressed properties that these investors have bought in the past.
While it may seem impossible to find off-market distressed properties by simply driving around, the truth is that it’s relatively easy to find these properties if you know what to look for. Distressed and vacant properties can be found by driving in your neighborhood or other neighborhoods in the county that you live in and looking for homes with boarded-up windows, overgrown lawns, or scattered items and toys in the yard.
Once you identify a possible lead, write down the address for additional research. The next step in this process involves searching for owners of vacant homes via county records. You can then contact the owner and ask some questions about the property. If the house seems like a good investment opportunity, all that’s left is to make an offer.
Finding off-market distressed properties is never going to be as easy as searching for a home on a multiple listing service. However, there are plenty of useful resources at your disposal that can simplify this process and help you find the ideal investment opportunity.