How to Buy Distressed Properties? - YouTube

all right the wi-fi here is freaking horrible so  

i am going to attempt to get this done all  10 minutes of it so question was how to find  

distressed properties i think that's the  topic for today um let's talk about what  

the stress properties means um to me what  the stress properties might mean to you so

um what you might think a distressed  property means is that beaches right  

behind me it looks nice but you know  get a really good feel for it okay um

you probably think the stress property means  a property that's like falling apart right  

i look at it as distressed properties i don't  i don't really call them distressed properties  

right because the problem with wait a second i  didn't even introduce welcome to the flipping and  

wholesaling houses in new york show i'm michael  pentore teacher to start flipping wholesaling  

houses in york or if you're already doing a great  business i'm sorry i'll do it all the time um so  

i don't necessarily only buy distressed properties  right i buy properties at a discount and the way i  

buy properties at a discount is there's usually a  problem either with the property so it might be a  

really distressed crappy property or there  might be a problem that sun is killing me  

or it might be a problem with the owner's  situation right the property might be fine  

you're looking at my shorts  hanging over there okay  

um but he's in some kind it may not be the stress  right it may be a situation where the owner just  

um understands that because of the condition  of the property or something to do with the  

municipalities let's say an open perimeter  or an open violation or his situation  

maybe he lives far away and doesn't want to deal  with a lot of the [ __ ] that goes on with listing  

a property he is willing to he is willing to sell  the property a discount really i don't so i don't  

really say i buy distressed properties i say  i buy a discounted properties right and people  

go why why would anybody sell a property to you  a discount and there are a lot of reasons right  

so i mean some of the obvious reasons there's a  time reason right maybe they need to close fast  

more likely they need to close slow right they  don't want to be on a buyer's timeline they may  

have no place to go so they want to buy from  someone who can wait for them there could be a  

condition reason right that's the most obvious one  properties in horrible condition they feel that  

whoever they sell to is going to ask them to make  repairs they don't have the money to make repairs  

that's it it can be um condition situation that  there's an illegal unit and there or there are  

tenants that don't want to leave that's part of  the condition um those are reasons why i buy what  

else there is um sometimes there's a compelling  reason right they need they need to bail out their  

son and they need immediately uh the house is um  been vacant for four years and it's costing them  

money there's things like that happen all the time  so i don't say i buy the stress properties i say i  

buy discounted properties now if you want to find  distressed properties really i think the best way  

is to do simple driving for dollars um so driving  for dollars means you drive around an area and  

you make a note of the properties they look like  crap right they look distressed they look terrible  

and a couple of things with that number one is you  should be able to do research on your local county  

a clerk's website before you try to find the owner  and send them a letter so you want to look on the  

county's website and you want to look for one  of four things that would make it in my opinion  

uh not worth my time but it may still be worth  your time so the first is you want to look for  

if it's um if it's bank owned right the bank take  possession of it in which case it's usually not a  

deal anymore because the bank's gonna try to get  squeeze every dollar out of it that they can um  

you don't want to see two at some point number  two is you wanna see if it's investor owned  

um so that's not a deal anywhere some investor  has it already you know it's impossible the  

investor will try to sell you this kind of  anything's possible possible the bank will  

sell you discount as possible but for me  it's very unlikely especially in new york  

the third thing is that it's way under water so  it's got like a list pendants from 12 years ago  

so it's been a foreclosure for 12 years and  um it's been a foreclosure for 12 years and

um there's just tremendous amount on it  relative to what you can pay so if that happens  

it's not worth it for me can you go and  try and get a short sale done for sure  

you can it can work right for me i don't want  to go down that path because firstly you have to  

find the owner and then you have to convince the  owner to sell it to you and then they usually want  

some money and then you got to find the lender  sell to you at the price you want to me it's  

too many levels now again it might be something  you want to do it's not something i want to do  

the fourth is that it's a reverse mortgage so if  you see lenders like financial freedom or lenders  

like that it becomes a very difficult situation  because usually the means the borrower's dead  

and you don't know what the balance is because  the balance it shows is nothing to do with  

what is actually owed so just a quick primer on  reverse mortgages even though this is not about  

risk mortgages the way i i know reverse mortgage  i did them for many years is that the used to get  

um we used to record 150 150 percent of what  the maximum allowed to the borrower so borrow  

was allowed to get 400 000 would record a mortgage  for 600 000 now that doesn't answer any question  

about what the balance owed because sometimes the  bar would take nothing or take minimal amounts of  

money twenty thousand dollars so the balance  could be much less sometimes a lot of times  

the bar is maxed out and if the bar is maxed  out and haven't made payments in a long time  

the interest has been accruing on interest so  instead of being six hundred thousand dollars  

they may owe a million dollars or it might say  six hundred thousand thousand they owe a hundred  

thousand dollars so you don't know and for me  that's too much work now you may still want to  

do that you may still want to try to find the  heirs and go through that i'm not doing that  

so i would advise you on any driving for dollars  looking for distressed properties go through the  

county clerk's office almost every count my county  which is bad really bad with um really really bad  

with public information my account that gives you  all the information now so can't deal shows you  

everything and suffolk can give you some things  but you got to pay more to see the documents  

but new york city you can see everything so these  are places where public admission is tough to come  

by i'm sure wherever you are your county clerk can  probably show you what was recorded over the last  

30 or 40 years so you want to do that research  first when you find a distressed property and see  

if it's something worth pursuing now are there  other ways to find the stress property sure now  

if you want to say just distressed properties i  again i personally think you should take the words  

distressed properties out of your vocabulary  you're looking for discounted properties you  

look at properties where you can buy them at  enough of a discount to make money on them  

whether i bought a lot of properties that were in  decent conditional good condition at a significant  

discount and you again people who don't really  understand what we do say how is that possible  

but it happens all the time for some of the  other reasons could be a time reason it could be  

uh maybe it had a an issue with um with a  municipality maybe it's got unpermitted editions  

maybe it's got violations or things and and i was  able to fix those things up and take care of them  

and i can make money on it so it's really  just a matter of finding discounted properties  

doesn't matter if it's distressed but if it's not  distressed i prefer buying properties that are not  

stressed they're really distressed i'm going to  try and wholesale them right because i don't like  

doing a lot of construction i did that for the  first four years of this business and i don't want  

to do construction massive construction anymore  i'll do minimal construction but that's my opinion  

maybe you want to do major renovations that's your  opinion but for me take out the word distressed  

properties out of your vocabulary and you really  you're just looking for discounted properties and  

you're looking from very often just reasonable  owners not owners who you know when you're  

starting this business you think you're going  to buy a list you're going to skip trace a list  

all those numbers are going to be right or most of  them you're going to people against the phone and  

they're going to say something like i need to sell  this house in the next 24 hours i don't care what  

price it is no one says that right that doesn't  happen right everybody's got a number in mind  

usually there's something they owe usually there's  a number that they want and they um you just need  

somebody reasonable that understands that as  an investor and i'll say to them listen if you  

want to max out every dollar you should list this  property right you you're going to sell to me it's  

going to be at a discount and i'm going to provide  you with certainty and convenience my price is  

going to be the price it's not going to change  i'll close whenever you want you want to show  

it 100 times right maybe once or twice and that's  and and that's what you're going to pay for you're  

going to pay for that right and you can leave  all the stuff here you don't have to clean it out  

that is the convenience that i provide and people  will pay for it people will give up money for  

that and if you think about it we're not taking  advantage of anybody it's the same thing when  

you go into starbucks but eight dollars for a cup  of coffee right that cup of coffee because then  

starbucks four cents they're 14 cents so what  are you doing you're paying for the certainty  

and convenience of knowing it's there you don't  want to buy the beans you don't want to grind the  

beans you don't want to frot the milk you don't  want to get the ice you don't want to blend that  

crap you don't want to buy stirrers you don't  want to buy cups and you're willing to pay an  

exorbitant amount of money for that right seven  bucks in profit 750 in profit you're willing to do  

that for the certain and that's how every single  transaction if you think about it works everything  

it all works uh the same way we pay money or  give up money for certainty and convenience

sorry that's what we do i think i'm connected on  another wi-fi here sucks crap so i hope this was  

helpful that's how i would find distressed  properties i'd drive for dollars if i could  

um just to know that in areas  with driving for dollars  

under a hundred thousand dollars you're  going to need like 600 properties to get  

a deal in areas in uh like where i am with  the property values over 500 thousand dollars  

um studies have shown you about 1200 properties  to get a deal so understand that there's a lot  

of it and please do the research i told you first  i'll save you a tremendous amount of money uh just  

keep tracing and contacting and mailing people who  are not going to be able to sell you the property  

so i hope this was helpful um if you want all the  ways that can help you go to howtoflipnewyork.com  

if you're interested in my course that teaches how  to do what i do go to howtoflipnewyorkcourse.com  

if you are interested in one-on-one coaching  just finding out more about it you can go to  

coaching.how to flip new york.com um please keep  the comments coming i post five times a week i'm  

posting from cabo san lucas in mexico right now  and i don't know what to say half the time so  

your comments really helped me um any comment  is good there's no bad comments it doesn't even  

have to be on the video you're watching if you  want to ask questions simple answer i'll reply  

if it's something i've covered before i'll send  you links to the videos and if it's something  

new i'll do a new video on it so thank you very  very much for watching i'd really appreciate it