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How do I Find Distressed Properties?

By Adam Hill
Updated May 16, 2024
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Distressed properties come in all types and are often easily spotted. Other times, it helps to employ a specific strategy to find the best distressed property deals. Techniques for finding distressed properties fall into two basic categories – either going out and actively finding them, or using methods that will motivate owners of such properties to contact you. A good mix of the two approaches will likely yield the best results.

When a parcel of real estate is referred to as a “distressed property," this is a kind of shorthand for a property whose owner may be “distressed,” or in other words, unusually motivated to sell the property, and therefore willing to take a below-market price. Distressing situations can be caused by numerous different circumstances. Divorce, foreclosure, and bankruptcy are a few common events that can lead to the need to sell real estate. Records of these events and filings are public, and are usually available at the local county courthouse. Often times, courthouse records are available electronically on the internet, potentially eliminating the need to travel to the location to find leads.

Finding the names and contact information of property owners from these records is one way to prospect for distressed properties. There are also distressed properties that got that way because of a death in a family, in which a property was inherited, possibly by a person who is unable to care for it. Often, the person who passed away was also unable to properly care for the property, or it may have been vacant for an extended period of time.

Finding these properties may not be as easy as a trip to the local courthouse, but it can still be done. This leads into one of the best ways to actively prospect for distressed properties, namely a visual search of a neighborhood. The best neighborhoods to search are those with a good mix of older and newer properties, which are sometimes referred to as transitional neighborhoods. Once you begin to search, it is usually a simple matter to find properties that simply don’t fit in the neighborhood.

Poorly maintained properties, or those which are obviously vacant, will be well-known to their neighbors, and someone nearby is likely to know the name and contact information of the owner of a clearly distressed property. In the event that they don’t know, another visit to local government offices will be in order. The county tax assessor will have records of who the owner is, and with luck, the listed contact information will be current enough to be of use.

In addition to these methods, the wise placement of advertisements, with taglines such as “I buy houses” or other phrases that get the attention of owners of distressed properties, would be likely to attract responses from them. Once suitable distressed properties have been located, the challenge becomes finding a way to turn a profit from them. Fortunately, there are ways to do so in almost every type of market condition.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By anon251468 — On Mar 01, 2012

I am an estate agent looking for distressed property stock. Please advise on what sources one can contact to get them. --Ilana

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