BiggerPockets Daily Q3 Zombie Foreclosure Rates Opens Door For Investors to Find Good Deals
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Aug 30, 2025 Zombie foreclosures are making a resurgence, especially in the Rust Belt and Midwest. These abandoned homes present unique investment opportunities for savvy buyers. The podcast discusses the financial factors leading to these vacant properties and the potential pitfalls investors may face. Listeners will learn how to navigate ownership status, title searches, and the extensive renovations needed to revive these houses. It's a treasure hunt for those willing to tackle the risks in exchange for the rewards of revitalizing neighborhoods.
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What A Zombie Foreclosure Is
- Zombie foreclosures are properties abandoned mid-foreclosure and left vacant before the legal process finishes.
- They concentrate in Rust Belt and Midwest states where vacancy rates are highest and rising.
Scale And Geographic Hotspots
- Adam Data found about 882,000 investor-owned homes were vacant in Q3 2025, roughly 3.6% of investor stock.
- Highest zombie rates were in Indiana, Illinois, Oklahoma, Alabama, and Ohio, with many metros below the national average.
Why Zombie Foreclosures Happen
- Zombie foreclosures stem from financial traps like ARMs resetting, nonrefinanceable short-term loans, and legal entanglements.
- Tenant damage, code violations, and contractor issues also push properties into abandonment during foreclosure.