Lesson 10: Distressed Properties - Identifying motivated seller situations

What Makes a Property "Distressed"?

A distressed property has an owner facing circumstances that create urgency to sell - often below market value. It's NOT just about the property condition.

Types of Seller Motivation

Pre-Foreclosure

Behind on payments, facing auction. URGENT - they'll lose everything if they don't sell. High motivation, often will take steep discount to save credit.

Probate / Inherited

Heirs inherited property they don't want. Often out of state, don't want to manage repairs or be landlords. Usually 100% equity = flexible on price.

Divorce

Splitting assets, need cash fast. Neither party wants the house anymore. Emotional situation = motivated to close chapter quickly.

Job Relocation

Moving for work, can't wait 3-6 months for retail sale. Need certainty and speed over maximum price.

Health/Financial Issues

Medical bills, job loss, need cash now. Can't afford repairs to list retail. Need simple, fast solution.

Tired Landlord

Dealing with bad tenants, deferred maintenance, headaches. Just wants out - will take discount to avoid more hassle.

Signs of Property Distress

Physical Signs

• Overgrown yard/landscaping
• Boarded windows
• Peeling paint, damaged roof
• Accumulated mail/newspapers
• Code violation notices

Data Signs

• High equity + long ownership
• Out-of-state owner address
• Tax liens or delinquent taxes
• Notice of default filed
• Probate case filed

Our Best Lead Types (In Order)

1Probate/Inherited - High equity, motivated heirs, often need cash for taxes
2Pre-Foreclosure - Urgent timeline, will discount to save credit
3Tired Landlords - Ongoing headache, want simple exit
4Divorce - Need to split asset quickly

Key Takeaway

Distressed doesn't mean "bad house" - it means motivated seller. Focus on the SITUATION not just the property. Solve their problem and you get the deal.