The Real Estate Investor’s Guide to People Problem Properties
Zig Ziglar’s timeless wisdom rings especially true in real estate investing: “You can have everything you want, if you just help other people get what they want.” Yet most investors have it backwards. They’re hunting for deals instead of hunting for problems to solve.
The Mindset Shift That Changes Everything
Picture a firefighter racing toward a burning building while everyone else runs away. That’s the exact mindset successful real estate investors need to adopt. While other investors chase the same overpriced listings and compete in bidding wars, you should be running toward the problems everyone else avoids.
“People Problem Properties” – those caught in pre-foreclosure, foreclosure, bankruptcy, divorce, probate, and other distressed situations – represent some of the most lucrative opportunities in real estate. But here’s the catch: you can’t approach them like a vulture circling for a cheap deal. You need to approach them like a problem solver with genuine solutions.
Why Problem-Solving Beats Deal-Hunting
The traditional real estate investment approach focuses on finding undervalued properties, negotiating lower prices, and maximizing profit margins. This transactional mindset creates a win-lose dynamic where you’re essentially hoping someone else’s misfortune becomes your financial gain.
The problem-solving approach flips this entirely. Instead of looking for cheap properties, you’re looking for people facing genuine challenges who need creative solutions. When you solve their problem, you create value for everyone involved – and that’s where real wealth is built.
Consider the difference: a deal-hunter sees a pre-foreclosure notice and thinks “opportunity to buy cheap.” A problem-solver sees the same notice and thinks “someone needs help saving their home or transitioning to a better situation.”
The Landscape of People Problem Properties
Pre-Foreclosure Properties: Homeowners facing foreclosure aren’t just dealing with a financial transaction – they’re facing the loss of their home, damage to their credit, and often significant emotional stress. The surface problem might be “I need to sell quickly,” but the deeper need could be preserving their credit score, finding temporary housing, or keeping their children in the same school district.
Divorce Situations: When couples divorce, real estate often becomes a complicated asset to divide. One spouse might want to keep the house but can’t qualify for a mortgage alone. The other might want their equity out quickly to start fresh. Traditional solutions often involve forced sales that benefit no one.
Probate Properties: Heirs inheriting property face unique challenges. They might not want to be landlords, can’t afford maintenance and taxes, or need to divide assets among multiple family members. The property might have sentimental value that makes them reluctant to sell to just anyone.
Bankruptcy and Financial Distress: These situations often involve people who need to liquidate assets quickly while preserving as much value as possible for their fresh start.
Beyond the Surface: The “What Box?” Approach
My friend Bill Cook’s “What Box?” model challenges the conventional thinking that limits most real estate solutions. Instead of being confined to traditional purchase methods, this approach opens up a world of creative problem-solving possibilities.
Most people in distressed situations say they need cash, but that’s often just the surface answer. Dig deeper and you’ll discover the real need behind the need. Maybe they need cash to move, but what they really need is help finding temporary housing while they get back on their feet. Perhaps they need money for a deposit and first month’s rent, but what they really need is someone who can help them transition smoothly without the stress of coordinating multiple moving parts.
The “What Box?” approach means you’re not limited to: “I can buy your house for cash.” Instead, you might offer: lease options, seller financing, partnerships, property management services, or even temporary housing solutions. You might help them avoid foreclosure entirely by taking over payments, or create a rent-back arrangement that gives them time to stabilize their situation.
Practical Problem-Solving Strategies
Listen First: Most investors lead with their solution. Problem-solvers lead with questions. What’s really driving their need to sell? What would an ideal outcome look like for them? What are they most worried about?
Think Beyond Money: While cash might be part of the solution, it’s rarely the complete solution. Consider offering moving assistance, temporary housing, property management services, or help with the transition process.
Create Win-Win Scenarios: The best deals are the ones where everyone wins. Maybe you buy their house subject-to the existing mortgage, giving them cash to relocate while helping them avoid foreclosure. Maybe you offer a lease-option that gives them time to recover financially.
Build Relationships: People in distress need someone they can trust. Focus on building genuine relationships rather than just completing transactions. These relationships often lead to referrals and repeat business.
The Long-Term Advantage
When you shift from deal-hunting to problem-solving, you create something more valuable than just profit margins – you create a reputation. People remember who helped them during their darkest moments. They refer friends and family. They become advocates for your business.
This approach also insulates you from market fluctuations. While deal-hunters struggle when inventory is low or prices are high, problem-solvers always have opportunities because people always have problems that need solving.
Your Next Steps
Stop asking “Where can I find a good deal?” and start asking “Whose problem can I solve today?” Look for the pre-foreclosure notices, the divorce filings, the probate listings. But approach them not as opportunities to profit from someone’s misfortune, but as chances to create value for everyone involved.
Remember Zig Ziglar’s words: you can have everything you want by helping others get what they want. In real estate, that means running toward the problems while others run away – just like that firefighter racing into the burning building while everyone else seeks safety.
The deals will follow the problems you solve. The wealth will follow the value you create. And the satisfaction of building a business that genuinely helps people will make the financial rewards that much sweeter.
