Distressed Property Blog

I was explaining what I do to a friend the other day, and he jokingly referred to me as an ambulance chaser. I laughed—sort of an uneasy laugh, I must admit. That’s not how I perceive me myself or the advice I give. What did he mean by that comment?

Have I instructed people on how to identify a distressed property in their neighborhood as an investment opportunity? Yes. And isn’t that like lawyers chasing ambulances to the scene of an accident to drum up business? Well…no, I don’t think so, and that’s what today’s blog entry is about.

Let’s say John is a budding foreclosure investor. It’s a sunny afternoon in suburbia, and John is driving the neighborhood looking for distressed properties. Yep, just like it sounds…overgrown landscapes, papers on porch, and obviously vacant and poorly maintained homes. These are all signs that the owner is possibly a distressed property owner, and therein lays a potential investment opportunity for John.

Now let’s say Bill is the owner of one such home spotted by John. Bill is, in fact, a distressed property owner. Bill’s not a bad guy, but the combination of being laid off and being the victim of mortgage fraud has placed him in an awkward situation where he now faces foreclosure. Bill is desperate. The situation has strained his marriage, and he is embarrassed to socialize with neighbors with whom he used to frequently barbecue and play softball in the local park. Yes, there is no doubt that Bill is a distressed homeowner.

To return to the initial question, if John were to approach Bill about his situation, is John really little more than a lawyer handing a business card to an accident victim as he is loaded into the ambulance? Again, I’ll say no. You see, in my opinion, John is in a situation where he cannot only make a smart investment that will yield him a nice profit down the road, but John can also help a neighbor. Foreclosure investing is about making money for the investor—let’s be clear on that point—but it’s also about rebuilding lives and neighborhoods and communities across America.

This nation is currently struggling with a mortgage and foreclosure crisis that hits us where it hurts most—our homes. Foreclosure investing is a way to help somebody like Bill regain his dignity and repair his financial situation. It’s one way to help a neighbor get back on his feet, and, not to sound unduly patriotic, it’s good for America.

Here are some common signs of distressed properties. These signs are all based on a critical assumption: If a homeowner is facing foreclosure, they probably do not have the money to maintain their property. This may be an opportunity for you to step in and offer a homeowner like Bill an opportunity to start afresh, while at the same time providing you with an excellent investment opportunity. Here are the three most common signs:

• Newspapers Piled in the Driveway or on the Front Porch
• Unkempt Houses Without Furniture
• Overgrown Lawns

In a later posting, we’ll talk about how you might approach the distressed property owner, but for now, starting training your eyes on simply identifying those properties that may have been right under your nose all along.