Finding distressed properties is critical to making money in real estate, and for new investors looking to learn how to fix and flip houses, it’s not as hard as you might think. Here are five ways to locate distressed properties that could become the next item in your portfolio.

1. Physical Distress. Take a drive in the neighborhood and look for properties in physical distress. If you see broken windows and a lot of peeling paint, you may be looking at a property that is in financial distress as well. This just might be a great find and a fix and flip candidate.

2. Tax Records. Check your county tax records to look for properties that are either up for foreclosure, or have a large outstanding tax bill. In these instances you may find that the property owner is in serious financial distress and ready to work out a deal.

3. Newspaper Ads. If you know how to fix and flip properties, you know that newspaper classifieds are great place to check for ads.

4. Auctions. Home auctions often sell houses way below market value. Some are private auctions, while others are held by municipalities. This is an excellent way to find distressed properties.

5. Word-Of-Mouth. Let people know that you’re a real estate investor looking to purchase property. Nine times out of 10, you may already know someone who’s interested, but just doesn’t know where to turn for help.

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