Finding Distressed Properties: 10 Methods That Work

A distressed property doesn't always look distressed. The house with the overgrown yard and boarded windows is obvious. But the clean three-bedroom where the owner just got served divorce papers? That's distressed too, and nobody else is knocking on that door.

Physical distress means the property itself has problems. Deferred maintenance, storm damage, fire damage, code violations. Every investor driving the neighborhood spots these. The competition is higher because the signals are visible to anyone paying attention.

Situational distress is about the owner, not the building. Pre-foreclosure. Tax delinquency. Probate. Divorce. Job relocation. Medical debt. The house might look perfectly maintained, but the owner needs out and they need out fast. These sellers care about speed and certainty more than getting every last dollar.

The best deals combine both. A vacant property with code violations where the owner is an out-of-state heir who inherited it two years ago and hasn't dealt with it. Physical distress scares away retail buyers. Situational distress creates urgency. Together, they create a motivated seller with no competing offers.

You don't need ten lead sources running at once. You need two or three that you work consistently. The next three lessons cover the specific methods and how to execute them inside FlipMantis.

Driving for dollars finds properties before they show up in any database. You see them with your own eyes, and the only competition is other investors willing to get in their car and drive.

Open FlipMantis D4D on your phone. Pick a farm area where your buyers want to purchase and where you know values well enough to spot a deal. Drive every street in a grid pattern. Don't just cruise the main roads and call it a day.

Look for the signals. Overgrown yard, nobody's been mowing in weeks. Mail stacked up in the box or on the porch. Boarded or broken windows. Code violation notices taped to the front door. Roof tarps. Cars on blocks in the driveway. No curtains and the rooms look empty through the windows. Any one signal is a maybe. Three signals together is a property worth capturing.

Tap to pin the address on the map. FlipMantis pulls the owner info from ATTOM data automatically: name, mailing address, estimated equity, ownership duration. One more tap runs the skip trace and you've got the owner's phone number before you reach the next block.

Drive at different times to catch different situations. Early morning shows which houses are clearly vacant, no cars and no lights. Weekday afternoons reveal rental properties with visible tenant neglect. Weekend mornings show properties where nobody is home doing yard work while every other house on the block is active.

Do this every two to four weeks. Properties deteriorate. A house that looked fine last month might have a code violation notice this month. The investor who shows up consistently gets to the deal first.

Calling a list of 5,000 absentee owners is a grind. Calling 200 properties that are absentee-owned AND tax delinquent AND have been vacant for six months is targeted. The second list converts at ten times the rate.

List stacking finds the overlap between multiple distress indicators. In FlipMantis, open the List Builder and select your geography. Now start toggling filters.

Pre-foreclosure properties where the owner has received a Notice of Default. These sellers have a countdown. The bank is coming and they know it.

Tax delinquent properties where the owner hasn't paid property taxes. If they're not paying taxes, they're probably not maintaining the property either, and they may be open to selling before the county auctions it.

Probate filings where someone died and the heirs need to deal with a house they didn't ask for. Longer sales cycle, but lower competition and highly motivated sellers.

Code violations on file with the city. The owner faces fines and legal pressure, and the property needs work they either can't afford or don't care to do.

Absentee owners managing from a distance. Especially out-of-state owners who've held the property ten or more years.

The magic is the overlap. Turn on two filters and watch the count drop from thousands to hundreds. Turn on three and you're down to a list of people where multiple life circumstances are pushing them toward a sale. That's who you call first.

Save the search. Run it again next month. New properties enter distress every day, and the list builder catches them automatically.

Not every lead comes from a database. Some of the best deals come from places most investors overlook because they're too busy staring at their screens.

Courthouse records are free and public. Walk into the county recorder's office and ask for recent lis pendens filings (pre-foreclosure), probate filings, and divorce filings involving real property. Some counties post these online. Others require you to show up in person. Either way, you're getting data before it hits the commercial aggregators.

Craigslist and Facebook Marketplace still have FSBO listings from owners who want to sell but don't want to pay an agent. They've already self-identified as motivated. Contact them directly.

Bandit signs work in specific markets. "We Buy Houses" signs at intersections generate inbound calls from sellers who are actively looking for a buyer. Check your local sign ordinances first because some cities fine aggressively for illegal signs.

Direct mail has a 0.5-2% response rate, which sounds low until you realize the people who call you have a letter in their hand and are ready to talk. Handwritten yellow letters to probate and pre-foreclosure lists still pull responses.

Networking is the long game that pays the biggest returns. Real estate attorneys, property managers, contractors, estate planners, and divorce attorneys all encounter distressed property situations as part of their daily work. A $500 referral fee to the right person generates deal flow for years. Go to your local REIA meeting. Tell people what you do.

Every lead from every source funnels into FlipMantis CRM. Tag the source so you can track which channels produce deals and which ones just produce busy work. After three months, your data tells you exactly where to spend your time and money.