I know most of you are already familiar with what I am going to share, but the teacher in me is telling me to share this anyway. Hope it is helpful in some way. Or even just a refresher for all of you that are getting it done. Anyway, I was reading in Profit From Real Estate Right Now and I got to the part where Dean talks about finding distressed properties. Great section of the book and I really enjoyed it. Thought I would share some of the highlights of it:
Some of the different types of distressed properties to focus your attention on are tax properties, probate properties, divorce properties, pre-forclosures, short sales, Foreclosures, and bank owned or REO properties.
The following are 11 ways to find distressed props/motivated sellers:
1) Visit your local courthouse. This is a great way to find the next "killer" deal. You should look for the following when going to the courthouse: Notices of Default (pre-forclosures), Real Estate Auctions (Foreclosure and Tax Sales), Wills (probate), and Divorce Records.
2) Newspapers are another great tool to find good deals. With all of what the internet has to offer, I feel we neglect this great resource. You can find so many great deals in the newspapers or legal papers such as notices of default, Trustee and Sheriff Sales, Auction Notices, and FSBO properties.
3) Internet property services are another great tool for you. Here you can find information on foreclosures and other great deals. Many of these do charge a fee, but really worth it because of the detailed information that you can pull from these sites. ForeclosureAlert is a great one which was put together by Dean himself.
4) Banks, although hard to deal with in certain arenas, are a great resource as well. You would be amazed at how helpful the bank reps can be. If you just ask for the REO department or a list of REO properties, they will usually give you the name of the REO agent that handles all of their bank owned properties. Now that is the type of agent you would want on your team. You can also find great REO agents by going to www.reonetwork.com.
5) Real Estate Agents and Realtors are incredible resources as well. Like Dean says in the book, all realtors are Real Estate Agents or Brokers, but not all RE Agents/Brokers are Realtors. Realtors are usually members of the National Association of Realtors which you pay a fee for to be a member. In many cases, realtors have more or a least fresh knowledge about current market conditions, recent market trends, and overall general information regarding the field of real estate. It can be difficult to get yourself a GREAT realtor, so once you do, take care of him or her because they will often make you a lot of money and save you a lot of time.
6) Attorneys are another great way to find great deals. I learned and am going to start applying this method for locating sellers. Get a list of probate and divorce attorneys in your area, draw up a letter to send to them (I am sure you can find a sample of one on this site), and send out those letters to as many of those probate and divorce attorneys as you can. You might want to wait a couple of weeks and then follow up with a phone call. Even if these attorneys don't get right back to you, they have your information on their files, they may call you when one of their clients really needs to sell for one reason or the other.
7) Government Agencies are great as well. There are many, but two of the more common ones are HUD (Housing and Urban Development) and VA (Veteran's Administration). HUD is REALLY great in stable and booming markets, but do work very well in recessed and down markets to find great deals. You should definitely try it. Here is a good site, www.hud.gov.
The United States Marshall Service can be of value as well. They administer the Department of Justice's Assest Forefeiture Program which really just means that law enforcement agencies seize properties due to illegal activity and the Marshall service is responsible for managing and disposing of these seized properties. These could be great deals for you. Just make sure you do your due diligence because these types of properties are usually sold "as is" so inspections should be a necessary part of the buying process.
9) Public Auctions are awesome. Many times the banks will use these auctions to unload their properties and you can often get properties at low prices. Just be careful not to get caught up in the bidding wars that go on at these auctions. You don't want to buy a property for more than you should have bought it for just because you want to "out last" your fellow bidder. Here are some good sites that Dean mentions which I believe are also listed in the Total View Site:
10) Get in your car and drive around your neighborhood. This is such a great way to find properties. Someone once told me they call this Driving for Dollars which is now how I like to refer to it. Just sounds good. Anyway, you can find run down properties in nice neighborhoods. Simply find out who the owner is and call and ask if they are intersted in selling. You would be surprised at how many people would love to sell you their troubled property. If you don't feel comfortable cold calling like that, you can send a direct mailer or postcard. Also, while driving for dollars, you will often see "for rent" signs. These are gold. Call these numbers and ask if they are interested in selling. You might want to also ask if they are interested in buying more investment properties. There is another buyer for your Buyers List.
10) Lastly, word of mouth is just the oldest and most effective way to get business. All you need to do is share with everyone what you do on a daily basis. People that trust you will come to you first but if they don't know you are involved with real estate, they will not know to come to you. So TALK IT UP.
Hope this has been helpful to all: newbies and seasoned investors.
Enjoy your day.
It's not what we get, but who we become and what we contribute that gives true meaning to our lives.