8 Proven Strategies to Finding Distressed Properties

There are multiple ways one can approach finding a deal for Real Estate whether you are a real estate investor or just a wholesaler.

You can easily find a real estate deal if you take one or more of the strategies listed below including exploring the multiple listing service, driving for dollars, utilizing Direct Mail marketing, wholesalers, auctions, lead websites, digital marketing, Craigslist, and newspapers. Here is a more detailed analysis of every single one of these strategies:

1. Multiple Listing Service (MLS) Research

The multiple listing service is the place where all the Asians put up properties for sale. It is a communication area and hub where agents can buy and sell properties based on the criteria set by their clients. 

However, for most people who aren’t agents but still want to invest in real estate and gain access to the multiple listing service you need to find yourself an agent.

When investor-friendly agents come into play, you need an agent that understands your goal to make money and Returns on your real estate deals, and there are specific agents that you can look for that fit these criteria. 

Finding a good agent that fits the criteria of investor-friendly, will help you dramatically reduce the amount of time you’re going to look for deals so that you can easily build up your portfolio with, properties that you are confident will return high yields.

In addition, within the multiple listing service tell your agent to find distressed properties that could be potential fixer-uppers. If you are a wholesaler, this will be your best tool, because the more run-down the property is, the lower the bidding price you can ask for.

The lower the bidding price you asked for the more you can make in commission from your wholesaling fee when you release the contract to other investors.

2. Driving for Dollars

Driving for dollars is a very simple concept that requires you to get into your car and drive around good neighborhoods in search of vacant and run-down properties.

The reason why this is a very compelling strategy is that it is virtually free, except for the gas prices that you have to pay as well as the mileage you going to take up on your car. However, those are insignificant compared to the potential profits you can make off flipping and reselling the properties or the wholesaling fee you will take up.

When looking for a run-down property here are some traits you can spot very easily:

–  an overgrown lawn

–  piled-up newspapers

–  boarded-up windows

–  curtainless windows

–  junk in the yard 

any combination of one or more of these aspects should be written down in a notepad for future usage and research.

Once you have a list of these properties that you believed to be vacant, and you have written down all their addresses, it is time for you to do the owner research.

When the list of properties you have found we need to find the names and contact information of the owners of the properties. This can easily be done online by a county assessor website if you live in the United States, otherwise through other methods abroad.
Once you have a list of the owners you may contact them, simply reach out and ask questions about the property whether it is vacant and ready to be sold, and whether or not the owner is willing to sell the property for a discount.

Just remember that most of the answers are going to be no, so handling rejection is going to be a major part of this business.

Once you have found a potential seller all you have to do is send an offer and wait until whether or not it is accepted and once it is just move on to either buying the property or wholesaling it to an investor that you know.

3. Direct Mail Marketing

Direct Mail marketing is utilized in many different industries, especially in real estate. The concept is pretty simplistic in that you send out thousands of letters, in hopes that some people are going to contact you about a possible sale of their property, and then a few of those calls might turn into some sales.

For instance, if we send out a thousand meals to 1,000 different households, you might get 20 to 50 calls about interested sellers that are motivated. You may end up closing anything between 2 to 5 deals. Returning your investment multiple times over if you are a wholesaler or an investor.

Of course, all these numbers are very arbitrary, and your responses, as well as your results, always depend on the quality of the males you send in the quality of the leads you have gathered beforehand. However you should expect 1000 letters to get at least one sale, otherwise, you should decide to change up the direct mail strategy you are employing.

Direct Mail marketing is a very simple way to scale up your business once you have sufficient amounts of capital that have accumulated. If you’re capitalized increased by 20% to send 20% more letters than you have before and you should get a proportionate amount of sales for the next future months or years.

This is in comparison to driving for dollars where you would have to drive 20% more in order to get 20% more sales. Therefore once you have a sufficient amount of capital you have accumulated Direct Mail marketing could be a good fit for an investor with a decent amount of capital.

4. Utilizing Wholesalers

If you are not a wholesaler but instead a real estate investor, then this strategy is definitely for you. The wholesaler’s job is to find distressed properties for investors and act as a middleman between investors and sellers.

The wholesaler essentially finds good deals contact the owners puts the property under contract of sale and then finds the investors or individuals that want to buy the property at a discount and takes a wholesaling fee off the top.

Let’s say a property is worth $150,000 after renovations but if you find a wholesaler that has put it under contract for $90,000, you buy the contract off of the wholesaler for $100,000, letting the wholesaler pocket $10,000 while buying the property at a $50,000 discount. This way the motivated seller gets to get his property out of his hands, the wholesaler gets his fat fee, and you get to purchase a property for a 33% of the actual value of the property.

If you find these wholesalers or a wholesaler has contacted you, you should highly consider their offer because they already have done all the work for you all you need to do is sign the deal and get the property under your control.

5. Take Advantage of Auctions

An auction is when you are able to bid for a house at a given starting point. Are two types of actions that you can take place in. The first type is private Online Auctions.

Certain sites such as https://www.auction.com/ allow you to go into their site fill in your personal information and start bidding on properties in your area and Market. 

The advantage of this is that you can easily find properties that have starting prices that are way underneath the underlying value of the property and if you only bid on prices you are willing to pay you can easily find a deal if you bid on enough properties. If you get accepted on multiple bids and you only needed one bit to go through you can easily cancel the one that you do not want.

The second type of auction is a government-issued auction. By contacting your County Administration Office and asking about who is in charge of the government auctions in the county you are in, you will be able to start participating in government-issued auctions.

Even going to these auctions without the necessary intent of buying can easily turn into a lucrative opportunity that you haven’t considered before due to the nature of auctions.

This style of auction requires more work but is probably more profitable and easier to find deals than online auctions because of accessibility. Therefore if you’re willing to put more work and time into finding deals and auctions then government auctions will be the better choice.

6. Utilizing Lead Websites

A lead-generating website is a site that you own and operate that has an underlying message of ” I buy distressed properties in State College PA for cash.”

although this is a very simplistic marketing method it is probably one of the most powerful ones on this list. Just like Direct Mail marketing, it is easily scalable as the lead you get is proportional to the number of people visiting your page.

And this can be further optimized and scaled by introducing Google Advertising and search engine optimization into the mix. You can also utilize Facebook ads to link to your page and create interest. All in all lead generation websites can be very profitable for small start-up Capital, unlike Direct Mail marketing.

You can easily start for less than $100 of marketing capital and get over 500 Leeds potentially.

The site that you create can be done through HTML coding but the easier options include, four more tech-savvy individuals, WordPress. And for Less tech-savvy individuals you can use Wix or Squarespace and pay their monthly fees.

7. Craigslist Marketing Tool

Of course, Craigslist is an online classified section advertising website devoted to multiple categories including jobs, Services, products, and houses.

There are three ways you can leverage Craigslist to find deals.

The first way is to actually post an ad on Craigslist, detailing your interest in buying Under run properties or vacant properties for distressed owners. This can easily land you a couple of hundred leads on its own.

The second way is by searching other people’s ads that are actually selling their property on Craigslist you collect the mail and phone numbers of the people that are selling the properties on Craigslist which will allow you to create a list of potential deals you can send offers to.

The Third Way is a little more sneaky. By finding rentals on Craigslist that are utilized by individuals who were wanting to rent out their vacant units and property, you will be able to easily make a list of individuals that are probably distressed and cannot pay for the home unless they have a tenant.

This can easily be exploited by sending them made an offer for all cash and doing this for multiple houses and ads on Craigslist. Seeing if some respond this is a very lucrative and clean strategy for wholesalers.

8. The Good Old Newspapers

Now I know what most people are going to say while reading this section of the article ” newspapers are dying and their utility will be Irrelevant in the near future.” Although this could be true this does not mean that newspapers have zero utility for what our goal is.

Just as you can with Craigslist you can easily post an ad on a newspaper and due to a decrease in utility will become a lot cheaper than posting the ad on Facebook or doing any Google ads. However, you might see fewer leaves coming up from newspapers because fewer and fewer people each year utilize them.

You can also browse for ads for houses for sale and see if there are any interested sellers. In addition, you can apply the same tricks for rentals ads in the newspaper that you find and contact the person in charge of the rentals and ask if they are interested in selling the home for a discounted price.

It never ever hurts to ask, and that’s what’s most important about all of what we have said so far. Once you do find your leads and your lists it never hurts to contact reach out and ask about whether or not they are interested and for this price. Just like any investor you are willing to pay but never overpay.