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The Ultimate Guide to Distressed Properties: What They Are & How to Find Them

Jerry Norton

Aug 8, 2024

gray wooden house near green trees during daytime

If you’re a beginner real estate investor, you may be looking where to start. I totally understand: I've been there myself.

The first step is to look for distressed properties: properties that the owners are looking to sell quickly and at a below market price.

I get it: you probably have more questions, like:

What makes a property distressed?

How do I know if a property is distressed?

How can I find a distressed property?

I'll walk you through everything you need to know about distressed properties, including where you can find them for FREE, in this article.

What is a Distressed Property?

Simply put, a property is in distress if it has financial issues or it has fallen into disrepair.  

If you think about foreclosures or short sales, that's a distressed property.

Characteristics of distressed properties can also include neglected maintenance, structural issues. It's important to know that distressed properties may require extensive repairs or renovations, which is why it's critical for you as a buyer to weigh the property's potential profit and loss.

The Causes of Distressed Property

What can cause a distressed property?

Financial Hardship 

One common cause is financial hardship experienced by the homeowner, such as job loss, bankruptcy, or significant medical expenses.

In either of these cases, the property may face foreclosure if the owner is unable to keep up with mortgage payments.

Neglect or Abandonment

A property may become distressed due to neglect, abandonment, or natural disasters.

These factors can result in physical deterioration and lower property values, creating an opportunity if you are willing to invest time and resources to bring the property back to its former glory.

How to Find Distressed Properties

How can you find distressed properties?

Propwire

While you can use online databases and real estate agents, the best way to find distressed properties — whether you're a beginner or experienced real estate investor — is by using Propwire.

With Propwire, you can search 157 million MLS and off market properties 100% free — from the comfort of your own home and on your own schedule.

That's right: completely free.

Here's how it works.

After choosing a location, you can choose from one of 21 distressed property lead filters, including:

Once you've found a property you're interested in, the next step is to contact them and see if they are interested in selling to you.

How can you do this?

With the click of a button, thanks to Propwire.

It's true!

You can skip trace to find the contact information of the owner for just 10 cents.

After that, you can begin the negotiation.

There's no question about it: Propwire is the best way to find distressed properties (and it even beats out Propstream)!

The Bottom Line: Distressed Properties

There you have it: the success of your real estate business depends upon your ability to find distressed properties.  

Use Propwire now to find your first or next deal 100% free!