How to Find Distressed Properties in California

Distressed properties can be an excellent opportunity for investors. These homes are usually in pre-foreclosure or foreclosure because the owners are in financial trouble. Many are in perfect shape, allowing you to pick them up cheaply and sell them for a profit. The key to finding these deals is locating distressed properties in California. Following the instructions below, you can find pre-foreclosure, foreclosure, lien, bankruptcy, short sales, and probate homes for sale. Some avenues for finding distressed properties include newspaper ads, auction houses, realty websites, legal professionals, and government agencies.

Foreclosure and pre-foreclosure sales are an ideal way to find a property priced well below market value. To locate foreclosure and pre-foreclosure properties in California, you can try several resources that include:

Liens often indicate that a property is either in foreclosure or in financial trouble and heading in that direction. One way to find distressed properties to buy is to find those with liens. Although mortgage liens are very common, tax, mechanic's, and judgment liens are not. Those might be good targets to search for. Some ways to fine lien properties include:

Search the County Recorder's Office

The county recorder's office is where California liens are recorded and stored. You can search on the county website for liens or visit the office in person to ask for tax liens, mechanic's liens, or mortgage liens.

Some counties, like Los Angeles, contract with third-party services, and you can use those to search for lien documents and request copies. Los Angeles Registrar-Recorder/County Clerk's Office uses LexisNexis for records access. The county maintains records going back to 1850. You can search for records using the owner's name, parcel number, document ID, or property address.

Some California Recorder's Offices to Try Include:

• Alameda County
• Fresno County
• Riverside County
• San Bernadino County
• Santa Clara County
• Tulare County

Municipal Tax Assessor's Office

Unpaid property taxes can result in the county tax assessor filing a lien. The California State Board of Equalization oversees all county tax assessors and has a complete list of them. These offices have websites where you can search for property information, including liens. Visit the county assessor's website and search by AIN or property address. The Los Angeles County Assessor's website makes it easy to search for liens.

California State Board of Equalization

The California State Board of Equalization also has a website where you can search for property records and liens. The website has a lot of information about property taxes, appeals, and liens. You can search on the website or contact them in person or by phone for a list of the most recent tax liens imposed on California property. The California Franchise Tax Board is another resource to try. They file tax liens with the secretary of state.

California Secretary of State

The California Secretary of State has many responsibilities, including filing a "Notice of State Tax Lien" for homeowners who fail to pay their taxes. You can contact the California Secretary of State through the website or call (800) 338-0505 to ask questions about recently filed tax liens.

Superior Court Records

Judgment liens are filed with the Superior Court Clerk in California. You can search court records online or check with the California Secretary of State, who also has a copy of the lien.

Use a Title Company or Real Estate Attorney

Title companies do extensive research on properties before real estate sales. Real estate attorneys handle closings or complex real estate deals. Both can help you locate lien properties. They have access to specialized databases like the MLS and other private sources where they can find lien properties quickly. Some title companies and real estate attorneys in California to try are:

• California Best Title
• Consumer's Title Company
• WFG National Title Company
• Castaneda & Co., Real Estate Attorneys
• Attorneys Real Estate Group
• Real Estate Law Corporation

Third-Party Online Databases

Another option for searching for distressed properties is to use third-party online databases like PropertyChecker. These databases sometimes allow you to download detailed property records, including lien information.

PropertyChecker is an excellent option for quickly and easily obtaining a complete property report, including value, taxes, liens, foreclosures, and other essential data. You can quickly search using the property address to see if it is in pre-foreclosure or has liens that may lead to foreclosure. You can also search by zip code to view all the pre-foreclosure homes in a specific area.

Bankruptcy often leads to the sale of property well below fair market value. These distressed properties can be a goldmine of opportunity if you find them before anyone else. Some ways to locate bankruptcy and lien property sales in California are:

Land Records with the Clerk-Recorder's Office

Check the county clerk recorder's office for tax lien auctions. Some post these schedules right on their website. You can also call for a list of upcoming tax lien auctions. For example, Orange County public real estate auctions are listed on the Orange County website.

County Tax Collector's Website for Auctions

The county treasurer and tax collector in each California county also have a website, and many of them, like Los Angeles, list tax-defaulted properties for sale and auction details right there on the home page. You can also find information on the rules, how to register, and bidder information.

California State Controller's Office

The California State Controller's Office also has information on public property auctions for tax lien properties. They call these "tax-defaulted land sales." Information about where and when auctions are being held is on this website.

Govease Website

Some California counties, like Humboldt County, use the Govease website to hold public auctions to sell off properties with tax liens. You can find tax sale auctions, view them on a map, and schedule attendance.

Search Federal Bankruptcy Court Records

PACER (Public Access to Court Electronic Records) is a federal records system where you can search for bankruptcies and liens as well as other federal court filings. To use the system:

• Visit pacer.uscourts.gov.
• Register for a PACER account to access federal bankruptcy filings.
• Search for bankruptcies in California with the U.S. Bankruptcy Court.
• Review the results and refine your search if necessary.
• Find and download what you need.
• Contact the property owner and see if they are interested in selling.

* PACER may charge you a fee to download documents.

California Department of Tax and Fee Administration (CDTFA)

The California Department of Tax and Fee Administration has the most extensive listing of tax-delinquent properties and property sale auctions. You may need to create a FREE account to access information, and you may have to pay a fee for copies of lien documents.

Review Legal Notices in Newspapers

Lien notices are posted in local newspapers, making finding lien and bankruptcy properties easier. You can find foreclosure notices, ads for auction sales, delinquent tax notices, and probate notices for property. Scour your local newspapers regularly looking for any information on lien and bankruptcy property sales. Use the list of newspapers above to find your local paper.

How to Monitor Public Notices for Auctions and Sales:

• Regularly check the legal notices section of local newspapers where properties may be up for auction.
• Make a note of the date.
• Pre-register if required.
• Attend the auction.
• Make a bid.
• Bring cash to pay for the property.

Attend Public Auctions and Sheriff's Sales

Register to attend as many public auctions and sheriff's sales as you can. Many distressed properties are in great shape and being sold only to pay off a debt. You can find these auction schedules by regularly reviewing sheriff's websites and auction houses. Some to try are:

• Cuyahoga County Sheriff's Foreclosure Sales
• Lorain County Sheriff's Sales
• Riverside Sheriff's Auction
• Santa Barbara County Sheriff's Office
• Santa Clara Real Estate Auctions
• San Diego Property Auctions
• Napa Sheriff's Sales

How to Buy Property Through a Sheriff's Auction:

• Find an auction you are interested in.
• Register early to attend.
• Review the rules and regulations.
• Obtain the proper funding.
• Bring cash and attend.
• Bid.
• If you win, pay for the property and sign the documentation.

Check Social Media and Online Real Estate Platforms

Many realtors, attorneys, title companies, and government offices use social media platforms to get the word out about upcoming auctions or available lien or foreclosure properties. On social media, follow those that pertain to you. For example, find realtors in your local area who specialize in distressed properties (use the list above for ideas). Follow local title companies and attorneys and regularly check their feeds or set up alerts so you don't miss any important opportunities. Use the list above of online realty platforms to look for upcoming lien or foreclosure sales.

Consult Real Estate Agents and Brokers

Many realtors or brokers specialize in distressed properties and may have a wealth of information that you find helpful. If you can find some of these professionals, you could arrange for them to contact you before they make these sales public, and you could get a jump on the competition.

How to Connect with Professionals Specializing in Distressed Properties:

• Follow realty professionals on social media who specialize in bankruptcy, lien, and foreclosure properties. If they post something interesting, send them a private message.
• Search online for real estate agents and brokers dealing with distressed properties or auctions.
• Hire a realtor and ask them to check the Multiple Listing Service (MLS) for distressed properties.
• Make an offer When you find one that meets your criteria.

Research Bank and Lender REO Listings

When a bank or lender forecloses on a property, it arranges an auction. The bank is allowed to bid as high as the outstanding loan balance. If no one bids higher, the bank wins the auction and owns the property, which is called Real Estate Owned (REO). Many of these banks own multiple properties at a time and may auction them off again or sell them privately. They might also list them on popular realty websites or with a broker.

How to Find Real Estate Owned (REO) Properties:

• Visit bank websites and look for REO departments or real estate sections listing any properties they have for sale.
• Use the list of banks below to get started.
• Call the bank directly and ask to speak with the REO department and ask about available properties.
• Make an offer.
• Have the funds available to buy.
• Close on the property.

Some California Banks to Try, Include:

• Ally Bank
• St. Mary's Bank
• Capital One
• Wells Fargo
• CIT Bank
• U.S. Bank
• East West Bank

Hire a Title Company or Real Estate Attorney

Title companies have detailed resources that can help you easily find distressed properties, sometimes before anyone else. A real estate attorney can help you navigate the complexities of distressed property deals. They can also ensure that you comply with all California laws. You can hire these professionals to work exclusively for you to find lucrative opportunities before your competition does.

How to Get Professional Assistance for Comprehensive Searches:

• Check the internet for reputable title companies or real estate attorneys specializing in distressed property.
• Ask business associates, friends, and family for recommendations of professionals to use.
• Contract with them to help you find distressed properties in good condition that need very little maintenance.
• Work a deal and research the property thoroughly.
• Review the professional advice before buying.

Short sales result when mortgage companies, banks, and other lenders notify the homeowner that they are late on their mortgage payments. If the homeowner cannot find a way to catch up on payments, as part of the mitigation process, the lender may offer to help with a short sale (selling the house to pay off the loan). The lender will handle all aspects of the sale, including advertising, documentation, and closing fees. It benefits everyone involved and avoids foreclosure. Typically, these homes will be listed for the full amount of the debt, which may be significantly lower than the market value.

You can find short sales by using the following methods.

• Check Online Realty Platforms (as listed above)
• Look up Homes in the MLS
• Check with Local Lenders and Ask for a List of Short Sales
• Check with Local Realtors (some lenders may ask them for help)
• Ask Local Real Estate Attorneys if They are Working on Any Short Sales

You can find roughly 170 California short sales (as listed on Zillow) at any given time.

Probate homes are often sold to pay off the debts of an estate. Probate records can lead you to distressed properties and those being sold below fair market value. Usually, the courts want to offload the property, not make a profit, and you can find a great deal. Probate records are public records. Some probate courts in California to check out include:

• Fresno Probate Court
• Orange County Probate Court
• Los Angeles Probate Court
• Sacramento Probate Court
• San Bernadino Probate Court
• San Joaquin County Probate Court

Real estate auctions are an ideal way to find and pick up cheap properties for less than market value. Not all distressed properties are in great shape, so it pays to do your homework. First, identify the sources for the best and most complete California real estate auction listings. You can start with these:

County Treasurer's Office & Other Government Websites

As mentioned, your county treasurer's office, recorder's office, and sheriff's office websites often have auctions and schedules. You may even be able to register online and find other details. See the links above to visit.

Auction Companies

Government offices, lenders, and others that need to sell foreclosure properties often use local auction companies. These companies handle advertising, registration, and the auctions themselves. Some in California to consider are:

Online Auction Websites

You can also check the listing of online auction websites for foreclosure properties. You can narrow down your results by city, state, or zip code. A few examples include:

• Auction.com
• Tranzon
• ServiceLink

Online Real Estate Platforms

You should also check out the above real estate platforms and look for foreclosure properties. You will see if they are included in an upcoming auction and find details on where and when to join.

Local Newspapers and Notice Sections

Review the notice and real estate sections of your favorite local newspapers. California requires public posting of legal notices like liens and foreclosures before auctioning off the property. Use the list of newspapers above to get started.

Real Estate Agents and Legal Professionals

Consult with realty brokers and legal real estate professionals (see the list above) to see if they have information on upcoming real estate auctions or properties that might be for sale soon. The trick is to get a jump on them before they are auctioned off.

The most common reason homes become distressed in California is that the owner(s) face some financial hardship (like losing their job) and cannot afford to pay the mortgage, taxes, or other debts. When facing foreclosure, they may opt for a short sale or other solution to sell the property quickly for less than it's worth to pay off the debt. The goal is to recover some financial value before it's too late. Los Angeles has the highest number of distressed properties, with 1,885, and San Bernardino County has the second-highest number. The Modesto metro area has three times the national average. In terms of commercial property Orange County wins with a whopping 32,905 foreclosure filings.

Distressed properties are an attractive opportunity for investors, but they may involve some additional risks, such as:

• Extensive Maintenance Required
• Hidden Problems
• Legal Issues (title disputes/liens/lawsuits)
• Market Fluctuations
• Complex Negotiations/Long Wait Times

Although distressed properties won't appeal to everyone, they are an ideal opportunity for some. Below is a list of the most common types of buyers in California who seek out distressed properties because they sell for so much less than full value.

• Real Estate Investors: Real estate investors are the most common type of buyer looking for properties in good condition to flip or for rental homes. Some examples are Osborne Homes, FlipSplit, and OpenDoor, which buy houses for cash but usually far less than market value.
• First-Time Homebuyers: Some new home buyers may choose to buy a distressed home in good condition (that may need a bit of maintenance) to get into a more expensive home for less.
• Nonprofits: Nonprofits or small businesses just starting out may opt for a distressed property to make the payment more affordable. California has 206,347 nonprofit organizations, and they all need space.
• Developers: Developers may buy whole neighborhoods of distressed properties, demolish them, and rebuild or upgrade them to create affordable housing options for low-income families, veterans, or disabled adults.