Finding and buying distressed properties with cash may become a tough job if you don’t have specific skills and expertise. But don’t worry, this blog will uncover effective strategies and tips to find such properties in your market. But before diving deep into this, first you should gain proper knowledge of distressed properties and how they are different from other real estate assets.
Buying property nobody else wants is like finding gems in the market. If you have a proper vision, then that undesirable something becomes irresistible. Barbara Corcoran
A distressed property refers to a house or building which the bank takes over or the lender sells at a lower market value. This tragic event is usually associated with the inability of a property owner to pay a mortgage. There can be other reasons, too, for a home becoming a distressed property. Here is the list of categories you need to know:
| Period | Total Distress Value | Notable Trends |
| End of 2023 | $85.8 billion | Significant growth in distressed commercial properties, led by office assets. |
| Third Quarter 2024 | Over $100 billion | Continued increase in distress, though the pace has slowed; office and hospitality sectors most affected. |
Source: MCSI
| Sector | Percentage of Sales Under Distress |
| Hospitality | 7.2% |
| Office | 3.8% |
Source: CRE Daily
“Finding the right deal often means looking where others won’t. Distressed properties are overlooked because people fear the work, but the reward is always worth it.” Grant Cardone
Finding distressed properties in any market is a challenging task because you face stiff competition from other investors or buyers. Moreover, it requires at least a basic understanding of real estate and the construction industry. Whether it’s a foreclosed property or any other abandoned building you must minutely check each detail to select it for future investment. Normally, such properties require a lot of maintenance work and if you don’t have knowledge of construction damage or electrical malfunctions then you will end up losing your money on fixing these issues, reducing your sales or profit margin. It seems like climbing a steep hill but as Grant Cardone said that people fear to work although putting effort gives them a worthy reward.
“Distressed properties are opportunities disguised as problems. A good investor sees the potential where others see obstacles.” Robert Kiyosaki
You know diamonds or rubies are found in the volcanic or explosively emplaced rocks – the areas where nobody wants to stay. Only jewelers or miners go there to extract these stones. They refine and shape them in such a way that it even becomes the ornament of greatest personalities, such as Queen of UK and other popular name of this society. Distressed properties are also like these gems in the real estate world and only a true investor, flipper, or DIY homeowner knows their real worth.
And see how similar the gems and distressed properties are. It requires hard work to extract, refine, and reshape the gemstones and same is the situation here with the distressed properties. They are hard to find, maintain, and sell but here are effective strategies that could enable you to find your hidden real estate gems in your own market with less effort:
In real estate there is a special term used for this, “Driving for Dollars”. It means you drive through neighborhoods searching for homes that appear to be distressed. When you find one, you contact the homeowners to see if you could negotiate and close a deal. There are two ways to use this approach:
There are common signs of distressed properties, such as:
Finding distressed properties online is easy—there are plenty of free sites you can use. But because it’s so accessible, the distressed properties on these sites are highly visible. Expect more competition for properties from other investors and even retail buyers.
The MLS is a massive online database of homes that includes foreclosures, short sales, and homes listed for 90 days or more—all signs of distressed property. To find these homes, just search by listing code (such as “short sales”), and you’ll get a comprehensive list of homes in a desired area. You can also set alerts that notify you when homes under these codes are newly listed.
Several websites are made solely for listing foreclosures and short sales. Remember all sites are not updated regularly, especially auction pages. Always visit the most reputable website for distressed properties, such as:
When you directly mail or cold call the owners to buy distressed homes that is called direct marketing. Using direct marketing, your goal is to compile a list of hundreds or thousands of distressed properties. If your list is longer, you have more chances to get a response.
Golden Tip: Incorporate direct marketing with other strategies, such as driving for dollars, analyzing tax and mortgage delinquencies, or even asking a real estate agent to pull expired listings off the MLS.
What if you are just sitting in your office or home and receiving calls from distressed homeowners without any effort. For this you should use internet marketing techniques to engage homeowners.
First of all, you need to build a website to demonstrate the way you can help distressed homeowners. There is no requirement of creating a well-designed website, but you should make sure to captivate the target audience through your messages. Several platforms like Squarespace offer free website templates for real estate investors.
Additionally, you can also build multiple social media channels to direct the traffic to your website. It would be great if you execute paid advertising campaigns via Facebook or Google. These campaigns will help target specific areas and attract distressed homeowners to your website.
You can check public tax records by using a county assessor’s website and see if there are delinquencies. Search by typing “[County name] tax delinquencies” and you’ll find a list of properties that have not paid their taxes. You can also hire a 3rd party company to look up the records for you.
Similarly, delinquent mortgage payments can be found in county court records. Look in the recorder’s office, online if they have one updated, or in person.
These property auctions sell homes that have been repossessed by banks and lenders or already gone through probate. These are often listed on county websites, in newspapers, or even as direct advertising from banks and lending institutions. They may be in person or online, and bids may be open or blind.
Buying distressed properties at auctions is very risky because you don’t know what you are buying. You buy the home “as is” and with no or very little time for inspections –possibly not even seeing the property before buying it. In addition, you must use cash to purchase the house, and pay an earnest deposit, which can be very high.
Let people know what you do, and you might be pleasantly surprised when they find the properties for you. As you’re building your network, connect with professionals whose fields overlap with distressed property. This can include divorce or probate lawyers, asset managers of REO property, and real estate agents. These people can tell you when they spot a foreclosure or short sale you might be interested in.
Table 3: Methods for Finding Distressed Properties
| Method | Effectiveness |
| Internet Marketing | High |
| Real Estate Auctions | Medium |
| Direct Mail Campaigns | Medium |
| Networking with Agents | High |
| Direct Marketing | High |
| Online Listing | High |
Source: Realtors Triple Play
Finding distressed properties for sale in South Carolina is a challenging task but if you have the required skills and expertise, it can become a profitable move. Then what about newcomers? If you adopt effective strategies, such as driving through neighborhoods, using distressed property websites, attending auctions, and checking public tax records, you can find a suitable distressed property that could optimize your return on investment. For more information, please visit our website at Redhead Home Properties.
A distressed property refers to a home or real estate that is in poor condition, under foreclosure, or owned by a seller facing financial difficulties. These properties are often sold below market value, making them attractive to investors.
You can find distressed properties in South Carolina through:
Yes, distressed properties can be good investments if purchased wisely. They are often priced below market value and can yield significant returns after renovations. However, buyers should conduct thorough due diligence to assess repair costs and potential ROI.
The risks include:
