How to Find and Buy Distressed Properties (Part 1)
Finding properties is one of the most difficult tasks of investing in real estate. One of the fundamental objectives of being a successful real estate investor is to find good properties which is especially true when are searching properties that requires amendments. Although foreclosure listings help a great deal in finding such properties, digging into the details and finding the properties that would give you a great profit is a challenging task. This practise requires you to visit specific subdivisions for the purpose of discovering abandoned or distressed properties. The focus of this article is to give you an insight into how to locate distressed properties. This blog provides a strategic breakdown that can be used by real estate investors.
1. Defining Your Market Area
The very first step is to define your market area. You have to specify your target area by taking into consideration your exit strategy, house age, tax range, crime rates, zip codes and any other source of information that could impact the price. Once you have verified the above, After you done with all these, you have to divide your target area into subdivisions that you would like to dive in.
2. Gather Your Supplies
The next step is to gather your supplies. Before you start visiting subdivisions, it's necessary to have a laptop, camera, pencil, pen, and an excel sheet that contains information about the addresses of properties, notes reminding you of of features of those properties and photo identification information so you can figure out which area on map refers to which property.
3. Analyzing the Area
The third step is to carefully analyze the area during the day. For this purpose, you need to be very much observant and skeptical. The best time to visit the places is from 10:00 a.m. to 4pm during the weekdays, when most people are at their workplaces and the area is not crowded. You may also need to visit the area during certain holidays or the days when trash is picked up. The reason is that this
would give you an idea about how abandoned a property is since vacant properties are deserted and neither any decorations are done on occasions not the trash pickup vehicles drive there.
4. Look for Red Flags
For the purpose of seeking a distressed property, you need to search for the red flags associated with properties. You need to search for owners that find it difficult to pay their house rents or the ones who are fed up of the tenants who do not look after their house well, and they wish to get rid of their property as soon as possible. Some red flags associated with such properties include tall grass or overgrown gardens, broken windows or windows with boards on them, mailboxes flooding with mails, doors having a sign of code enforcement, and postponed maintenance of the property.
5. Record and Research
While researching your target areas, you need to to enlist the points related to the properties you have visited, take the pictures of the properties more specifically pictures that shows the worst of the properties.
Once done with this step, go back home and study the specific properties you searched out, on the website of your target assessor. Next, study the properties in detail while taking into consideration the pictures and notes you had taken. Filter the properties that meet your criteria and discard others. Then finally, enlist these properties in your final marketing list. This is a longer blog post and has been split into two smaller posts which make it easier to read. Part 2 of this blog will continue in our next blog post!