How to Find Distressed Properties for Sale
You’ve heard of the local auction on distressed properties and wondering if you could somehow get one at a cheap price. Well, short answer is yes. The long answer depends on your knowledge and intelligence. In the following article, we’ll give you the knowledge on how to find a distressed property in the San Fernando Valley for sale. It’s up to you how you use this information to your advantage.
What is a distressed property?
Distressed properties are homes whose owners are unable to look after or care for them. These properties range from being heavily neglected or in a bad condition to being on the verge of foreclosure because the owner has failed to pay off the debt they had incurred.
Why should you purchase a distressed property?
First of all, if the foreclosure is yet to happen, you can approach the owner of the house directly. By doing so, you can make them an offer that is affordable for you without having to worry too much about negotiation. The owners of such properties are usually in tough situations so they’d be more than willing to accept your offer.
Similarly, if the house is going through a foreclosure, the seller will be selling it for a much lower price than its value. There are two reasons for this. Firstly, they want to sell the house as soon as possible. Secondly, they are not willing to repair the property and spend all that money just so that they can sell it for a higher price.
Furthermore, a distressed property usually has exceptional upside potential. Upside potential is, in simple terms, the difference between current value and its expected high value in the future. If you purchase it right now and make the appropriate repairs, there is a good chance that you can sell it for a profit.
How to find distressed properties?
The sure-fire method of locating such properties is to hire an estate agent near you. You won’t need to worry about the legwork and the searching. They’ll do the work for you. The only downside is that you have to pay them. So, it is a good option if you don’t mind spending some money.
Another fool-proof method is to talk to the area’s municipality. A municipality, in simple words, is a local area with a government of its own. You can go to the person in charge and ask them about empty or illegal properties. What you need to remember is that they are always searching for ways to fix up these properties and bring them back into the neighborhood. If you can convince the local municipality that you are willing to bring the property back to its feet, they will be more than willing to show you a few distressed properties before they go to auction.
Auctions are places where you are bound to find some damaged properties. As mentioned earlier, the prices will be comparatively less than typical properties. You would have to do your research first and find out about various auctions taking place. Once you have located them, you only have to attend a few and bid on whichever you like.
Distressed properties have certain qualities that make them stand out and easy to spot. If you know what to look for, then just take a walk around the neighborhood will reveal some. Some common characteristics include:
- Properties that are in a state of extreme neglect. It becomes visually apparent.
- Those properties in which the lights are always off at night. This implies that no one is living there so it could be a distressed property.
- Since no one will be maintaining the gardens and the yards, the plants and shrubs will typically be overgrown.
- A few broken windows and shutters along with paint that is mostly faded and peeling.
- A home where there is a lot of uncollected mail from the mailbox along with many notices posted on the door.
These are some of the common signs; however, they may not necessarily be distressed properties.
Alternatively, if you want to save the legwork, you can also find distressed properties online. There are numerous websites such as Craigslist and zillow.com, which have dedicated sections for distressed real estate but the downside is that they sometime charge for the service. It’s not that big of a problem though. They usually provide you with valuable details which do pay off.
From Coal to a Diamond
Distressed properties are hidden gems merely waiting for someone to find them. If discovered, and you know how to recover them, then they can yield a hefty profit for investors. Similarly, they can turn into new homes for landlords. You just have to know where to look and what to do with them!
