Your Guide To Finding Deals On Distressed Property Sales

As a successful real estate investor, I know that finding the right property at the right price is the key to making a profit in the real estate investing world. But what’s a property without a lead? 

Leadflow’s speciality is generating real estate leads, and this post is about the best motivated seller lead out there: distressed property sales leads. We’ll dive into what they are, the 4 different types of distressed home leads and how you can start finding them today.

What Are Distressed Property Leads?

Distressed property leads are properties whose owners are experiencing some sort of financial hardship, such as being in foreclosure or having unpaid taxes. These properties may offer an opportunity for investors to purchase them at a lesser cost, as the owners are more open to cash in exchange for selling the property at a lower-than-market value.

4 Types Of Distressed Property Leads

One of the first things investors should know about distressed properties is that there are four basic categories of leads to be aware of: 

• Tax Delinquent Leads
• Late Mortgage Leads
• Preforeclosure Leads
• Upside Down Leads

Let's break down each of these leads and the opportunities they hold;

1. Tax Delinquent Leads

Tax Delinquent leads are properties with owners that are delinquent on their property taxes. This type of distressed home seller lead is attractive to investors because they can be purchased for the unpaid taxes plus any additional fees. 

However, keep in mind that if the original owner pays the taxes prior to the sale, the property will be unavailable for purchase. That’s why reaching out to the property owner early on in the process is crucial with Tax Delinquent leads.

2. Late Mortgage Leads

Late Mortgage leads are properties that have fallen behind on their mortgage payments and are in danger of foreclosure.

Investors can buy these properties at a bargain, but they should be mindful of the possible issues that come with foreclosures, such as eviction and unpaid liens. It is also critical to do your due diligence on these leads because the banks may still be able to reclaim the money owed to them.

3. Preforeclosure Leads

Preforeclosure leads are properties that have received a notice of default and are in the process of being foreclosed on. 

Investors can get a great deal if they buy these properties before they go to auction. However, moving quickly is key with Preforeclosure Leads, and be prepared to bargain with the current homeowner in order to reach an agreement.

4. Upside Down Leads

Upside Down leads are distressed property leads where the owner owes more on the mortgage than the property is worth. 

These properties can be exciting investments since the owners may be motivated to sell for less than market value. However, keep in mind that these can be tricky leads because the banks may also be wanting to sell the property and may be less inclined to deal.

Ok - so we've covered the different types of leads. 

Now let's talk about how to find them.

 

Finding Contact Info For Distressed Property Leads

The three main ways that seasoned investors find distressed property leads are through software, skip tracing and Driving for Dollars.

Lead Gen Software

For real estate professionals looking to develop the ability to gather distressed property owner contact info lead generation software like Leadflow is the clear winner. This software pulls in billions of real estate data points to identify which properties are already, or most likely to become distressed properties soon, and it automatically pulls owner contact information as well.

Skip Tracing 

The process of locating contact information for a property owner, such as their phone number or address, is known as skip tracing for real estate. This is accomplished through the use of public records and online databases to find homes in preforeclosure, late on taxes or with a lien on the property. Then, real estate investors use those same records, often in tandem with social media, to find contact information for those leads.

Manually skip tracing can be incredibly time-consuming, and it’s best to outsource that process to software if you plan to do it more than once.

Driving For Dollars

Driving for Dollars is a practice in which an investor drives around a specified region looking for distressed home seller leads, such as those with overgrown lawns, boarded up windows, or delinquent taxes. The investor can then call the owner and inquire about the property through skip tracing. This strategy can be hit or miss, but it can be an excellent way to find local leads.

As you can see, distressed properties can be an excellent opportunity for investors to purchase properties at a lesser cost and potentially profit. However, keep in mind that these types of properties come with their own set of issues. Do your homework, thoroughly analyze the leads, and be ready to act swiftly when you locate one that fits your investment approach.

My recommendation to prospective is to start modest and gather experience before jumping in head first. Learn about the many types of leads and how to analyze them, and put your negotiating abilities to the test. It's also critical to have a solid team in place to help guide you through the process, such as a real estate attorney, contractor, and property manager.

And as you grow into a successful real estate investor, and you’re looking for tools to level up your game, make sure to give Leadflow a test drive to see what our lead gen tools, marketing stack and educational resources can do for you. 

Grab your free real estate e-books, podcasts and more in our education portal below!