Buying a distressed properties is often a great investment, the only problem is that they are incredibly tough to find. This is why most experienced investors rely on reliable real estate companies that particularly deal in distressed or probate properties. In fact, there’s tons of research that goes into finding such properties – not so obvious cues and additional data that indicate whether a property owner is in distress and there’s profit to be made.
How to find distressed homeowners in Arizona?
Simply put, a distressed property is a house where the owner can no longer keep up with the physical and financial costs of owning and maintaining it. Typically, such properties are on the brink of going through foreclosure as a result of unpaid mortgage payments or tax liens. While there is no formula to finding such properties, a house in disrepair is perhaps the first cue to it, as there is a general conception that people with financial distress often neglect the property. However, there’s more to it! So, we’ve put together a few cues that help at identifying distressed homes.
Cues to finding properties in distress
- Physical cues: This is perhaps the most obvious cue to finding a property in distress. If the property has been neglected for far too long, there are chances that the owner is either too old to work on the upkeep of the property, or is simply in no financial condition to pay for the maintenance. This is a great opportunity for investors. However, you’d often come across distressed homeowners in Arizona who aren’t too eager to part with their property, no matter the state of things. Moreover, starting with telling them that you noticed the property is in shambles is not a great start or the right way of approaching the owner. Proceed with caution, but most importantly, be respectful.
- Life events: Particular life events like a death in the family or a divorce may well be a sign of a distressed property. When homeowners get old they lose the zeal to maintain their home. Sometimes, they’re no longer financially sound to keep up with the maintenance costs. Much in the same way, when someone goes through a messy divorce, they try to get rid of the property and start afresh. However, if you come off too eager and without empathy, you may easily offend the homeowner. So be cautious and don’t try to make it obvious that you intend on making a profit off their loss or misery.
- Debt-related cues: No points for guessing that a foreclosed property, or a pre-foreclosure one, is the very definition of a distressed property. Experts believe that debt-related cues are the most telling signs of finding distressed properties. In such cases, the homeowners may be willing to listen to your proposal and have you help them solve their problems.
- Transactional cues: Real estate investors and companies dealing in distressed properties use historical sales data to trace investment opportunities. The property’s recent sale price when compared to its present value and income-producing capability, can offer insight into whether the homeowner will be willing to sell it. In short, if the owner paid too much for the property, it can be a sign that he may be open to negotiations.
Key takeaway
A distress sale occurs when a property must be sold quickly. Such a scenario occurs when for reasons of economic duress, the owner must accept a lower price. However, spotting distressed homeowners in Arizona is no simple task! This is why we recommend Foreclosures Daily. It’s a one-stop shop when it comes to finding quality distressed properties. It’s the top destination for detailed, up-to-date, and off the retail market leads. Connect with them, now!