This is just a collection of quotes from other authors about various ways to locate distressed properties. Pretty much all of the info is a repost.
Finding properties with delinquent taxes is fairly straightforward if you can find the local tax assessor’s website. Depending on where you’re looking, you might need to Google for “[City Name] Tax Assessor” or “[County Name] Tax Assessor”
The best “underwater” properties are the ones that are right on the verge of foreclosure — they’re the most motivated sellers. In many parts of the United States, you can find an official publication of these houses by Googling for “[County Name] Legal Notices,” but you can also find reliable, easy-to-browse listings at RealtyTrac.com, Foreclosure.com, and HUDForeclosed.com
Another option is to cultivate relationships with local bankruptcy and divorce attorneys, so they call you when they encounter a motivated seller.
Real estate-owned a.k.a. bank-owned properties aren’t just “distressed”; they’ve already been foreclosed upon. Most of them are just sitting empty, slowly costing the companies that own them money. On the downside, 100 percent of them are sold as-is, so if you don’t have a good reason to be confident that a particular home is solid, they can be a gamble. The best way to find REO properties is right here on BiggerPockets: a well-maintained list of REO searches that covers the entire country.
When the HUD, FreddyMac, or FannieMae insures a mortgage and that mortgage fails, those entities foreclose on the mortgaged homes just like a bank would. And when they do, they turn around and try to sell those homes, just like a bank does. Furthermore, properties are also frequently offered by several other government entities, such as the Department for Veterans Affairs or the FDIC. While every agency has its own rules and methods, you can start your research into this vast arena at the HUD Single-Family Homes for Sale webpage, which has links to each government department’s relevant webpage. There are also several solid links on the U.S. Marshal Services’ National Sellers List [PDF].
Yet more tips from article “How to Find Distressed Properties” by Angela Colley
One way to find distressed properties is to choose a target neighborhood, then drive around and eyeball the homes there. Be on the lookout for these telltale signs:
- Properties that stand out from other homes on the block because they are in a state of neglect
- Properties where the lights are not turned on at night
- Homes with yards overgrown with weeds
- Broken windows and shutters in need of repair
- Faded and peeling paint
- Notices post on doors or windows
- Uncollected newspapers and junk mail
Be Wary of Web Searches
Internet searches can yield a wealth of information about distressed properties, but there are a few risks:
- Many sites charge a fee to browse their database. Since you’ll have to pay upfront, you won’t know if the cost was worth it until you’ve already paid.
- Not all sites guarantee their information. What you’re looking at online may not be what you see in person.
- Some listings are outdated. You may waste time by looking at already-sold homes.
- If you’re browsing online, be sure to stick with a reputable free site. Try browsing realtor.com®’s Homes for Sale to get an idea of what is available in your area.