The number grew again: another vast wave of commercial and multifamily loans approaching maturity. Headlines imagined distress arriving all at once, like water against a dam.

But sellers do not become distressed on one national date. Pressure appears property by property—when the refinance quote disappoints, when equity requirements rise, when partners refuse another contribution, or when a lender begins asking questions the owner hoped to postpone.

The best opportunity may occur before an auction notice, while the problem is still a conversation and the seller still has choices. That is where screening matters. Distress is not a discount code. It is a diagnosis.

Find the type of distress

A seller can have three different problems.

Financing distress

The property operates well, but the old loan is maturing and new debt costs more or allows less leverage.

Operating distress

Revenue is weak, expenses are high, maintenance is delayed, or the use no longer fits demand.

Combined distress

The property has weak operations and a difficult maturity. This can create the deepest discount and the greatest risk.

Do not treat all three as the same lead.

Screen the capital stack

Ask or research:

• Loan balance
• Maturity date
• Rate and payment
• Lender type
• Personal guarantees
• Other liens
• Estimated property value
• Equity available
• Refinance gap
• Sponsor liquidity

A seller with strong equity and several lender options may have little reason to accept a large discount. A seller with a short deadline and no new capital may value certainty.

Rebuild the operations

Request trailing income and expenses, rent or booking statements, tax returns where appropriate, leases, occupancy, payroll, utilities, insurance, taxes, and repair records.

Then calculate current net operating income without the seller’s hopeful adjustments.

For a lodging or STR conversion, also verify:

• Legal use
• Fire and building code
• Licenses
• Parking
• Insurance
• Renovation scope
• Local demand
• Management cost

A new capital structure cannot repair a property with no lawful or profitable use.

Begin outreach before the forced event

Public records, broker relationships, lender contacts, maturity databases, and local networks can identify owners facing deadlines.

Outreach should be respectful and specific. Do not celebrate the owner’s problem. Offer possible paths:

• Purchase
• Partnership
• New equity
• Management turnaround
• Seller financing
• Structured closing timeline

Not every path will fit. The goal is to solve the real constraint.

Triage the seller and the asset separately

A motivated seller can own a strong property. A calm seller can own a weak one. The buyer must diagnose two patients: the capital stack and the operation. Is the pressure caused by maturity, leverage, partnership, deferred work, poor income, or all of them together? Which problem can new capital solve, and which will follow the buyer through closing?

Triage prevents urgency from becoming contagion.

Distress creates a conversation before it creates a discount.

Price certainty

A distressed seller may value speed, fewer conditions, flexible timing, or help with a lender more than the highest headline price.

That does not mean skipping due diligence. It means presenting an offer that clearly states:

• Price
• Proof of funds
• Financing condition
• Due-diligence period
• Closing date
• Assumed liabilities
• Required documents

Do not confuse more filings with a flood

Later ATTOM data would show U.S. foreclosure filings rising in the first half of 2025 while remaining below pre-pandemic levels on its measure.^[1]

That later result shows why investors should not wait for a national “wave.” Opportunity may remain scattered, local, and dependent on the owner’s exact capital problem.

Household debt and subdued mortgage originations also provided broad credit context.^[2] Commercial opportunities still required property-level facts.

Use a one-page screen

Before spending major time, score:

1. Days to maturity
2. Refinance gap
3. Owner equity
4. Current NOI
5. Deferred maintenance
6. Legal use
7. Local demand
8. Required capital
9. Lender posture
10. Seller willingness

A strong score means the financing problem may be solvable. A weak score means the discount must cover a much larger operating problem.

Return to the months before maturity. The owner still has choices. So does the investor.

The advantage comes from arriving with a clear solution before the property reaches the most public and competitive stage of distress.

Arrive before the auction story

Return to the debt wall and look for owners whose deadlines are near but whose assets remain usable. Bring a structure, not merely a low offer: certainty, timing, assumption, seller financing, recapitalization, or a clean sale where those tools are lawful and sensible.

The best distressed deals usually begin before the auction. By the time the drama is public, many of the cleanest choices are already gone.

Practical next step

Build a maturity-based lead list and screen each property for refinancing pressure, operating health, legal use, and seller motivation before making contact.

Primary call to action: Use the Distressed Seller Outreach and Screening Checklist.

Additional research context retained from the source dossier: ^[3][4]

Sources and editorial notes