Finding distressed properties

ryanlake

Inspired Forum Member
REIN Member
I was wondering if anyone out there can help me with finding distressed "wholesale" homes for sale.



I learned that you can actually go to the courthouse and look to see which homes are going to be under foreclosure before the process is permanent giving an investor time to solve the home owners problem.



But How do you know when these court orders are going on??



Or are there ways that I could attract those people so i do not have to find them myself?



I understand a realtor could help sift through the properties for me, but a property under going a possible foreclosure seems to be a solid bet.



If anyone has some advice i would LOVE to read it! Thank you REIN team!!!



-Ryan
 

Thomas Beyer

Senior Forum Member
REIN Member
If it were that easy everyone would do it.



The system is different by state and county in the US, and is FAR different in Canada. Most houses in Canada will be sold via MLS, via a realtor when they are in foreclosure. Thus, to get a good deal, you must know many realtors and compete with normal home buyers.



Best is to buy them directly from the distressed home buyer before they go to court.
Some firms sell lists of such pre-foreclosures, such as www.foreclosurescanada.com (Wade Fenner). You can then market directly to these home owners.



Many homeowners in Canada in foreclosure have high ratio, CMHC insured mortgages. Thus, the bank takes no loss, as CHMC bails them out, which in turn tries to get maximum $s through a listing.




You can also network through lawyers that deal in foreclosures, and pay them a finders fee.



Don't confuse TV advertising touting avenues doable and practical in the US with Canada !!
 

Rickson9

Senior Forum Member
Registered
In a healthy Canadian RE market, looking for distressed "wholesale" homes for sale is generally a waste of time. My uneducated opinion only.
 

ryanlake

Inspired Forum Member
REIN Member
Thank you Thomas. That was a big help for me to push me in the right direction. How do you feel about the above comment?
 

GaryMcGowan

Inspired Forum Member
Registered
[quote user=Rickson9]In a healthy Canadian RE market, looking for distressed "wholesale" homes for sale is generally a waste of time. My uneducated opinion only.




I agree, We have a solid system in place for attracting motivated sellers however it has taken 2 years to create the system and we do not buy a lot of properties from it. Your time would be better spent learning how to provide Joint Venture opportunities thus providing you with some or no money down real estate investments.
 

WadeFenner

Inspired Forum Member
Yes one should be careful when making opinions when not informed by ones own indepth practical experience.



Speak to those members who are making efforts with great success.



I for one have bought over 100 house directly from home owners who called me with an interest in selling. I've never said it was easy.



Yes even in a great housing market.
 

Thomas Beyer

Senior Forum Member
REIN Member
As Rickson9 stated, an (un)educated opinion. He specializes in US properties and has done very well there. Thus, an educated guy .. plus he owns / makes a killing with some stocks. Other folks have built systems to attract folks to phone them with a "distressed" house and they have developed a system to weed the cream from the crap.



It is doable .. after years of research and hard work as a specialist in a city, as you must be a SPECIALIST WITH EXPERTISE AND MONEY. That takes time & money & knowledge & trial-and-error based practical experience & tenaciousness !
 

Nir

New Forum Member
REIN Member
Interesting discussion.



Hi Wade,



Just curious - considering all the properties you purchased this way, what were the top 3 reasons

'your' sellers had to sell or wanted to sell?



Thanks,

Nir
 

wgraham

New Forum Member
REIN Member
My advice.... take out some ads and see what comes back to you! Kijiji, Facebook, Google Ad Words, the local paper, sign posts, flyers etc.



Its easy to test the market and see what is out there, what advertising works, and what doesn't.



Start by taking one step forward in the direction of you goal.



We buy about 20% of our properties from distressed sellers....they are out there but I wouldn't count on them as your only sales funnel!
 

RedlineBrett

Senior Forum Member
REIN Member
[quote user=wgraham]they are out there but I wouldn't count on them as your only sales funnel!




This is pretty accurate. You can't count on doing consistent volume or do much in the way of business planning based on finding true motivated sellers willing to trade equity for time.
 

ryanlake

Inspired Forum Member
REIN Member
So as a realtor do you still get motivated sellers Wade? I suppose i could just get someone like yourself to help me find sellers since that is your profession. I have a bad case of the lone wolf syndrome at times!
 

wgraham

New Forum Member
REIN Member
I am not a realtor. But yes learn to leverage other peoples time and expertise.
 

Thomas Beyer

Senior Forum Member
REIN Member
[quote user=ryanlake]I have a bad case of the lone wolf syndrome at times!


Not uncommon. Learning when to partner and when not to is an art, but as a one man show you can only go so far. Building a team of competent experts around you is critical: realtors, lawyers, property managers, accountants, money partners, spouse, painters, plumbers, mortgage brokers, interior design experts ...
 

RedlineBrett

Senior Forum Member
REIN Member
[quote user=ryanlake]So as a realtor do you still get motivated sellers Wade? I suppose i could just get someone like yourself to help me find sellers since that is your profession. I have a bad case of the lone wolf syndrome at times!




In Alberta Realtors cannot buy property at a discount from unrepresented sellers without disclosing the true value to the seller. So if Wade knows a seller's property would sell with minimal repairs for say 300k he can't buy it from them for 250k unless they aknowlege the disclosure in writing.



Same thing goes for listing property on the open market - the agent has a fiduciary duty to the seller to get them the best price/terms they can and their comissions go up if the sale price goes up.



All that being said the most motivated of all sellers are on the open market. So you can save yourself the trouble of digging around if you get good at screening deals on MLS.
 
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