The real estate market is chock-full of opportunities for investors, especially those with a keen and discerning eye. Among the most exciting opportunities are off-market properties, a unique niche in the industry that results in serious income for more discerning investors. But knowing how to find off-market properties is a big step.
Knowing how to find and invest in off-market properties is a great skill for investors to build, offering various advantages that can give your business a competitive edge.
We’ve written this blog to expand on what off-market properties really are, the advantages that investing in them can offer, and how to find them. By the end of this read, you should feel more equipped to diversify your portfolio with this less conventional branch of investing.
An off-market property is, in the simplest terms, a property that is for sale but isn’t available for viewings via the typical channels of marketing, such as multiple listing services. Working with off-market properties essentially results in “quiet” sales that fewer people are aware of, allowing for more personalized, less competitive transactions.
Off-market properties aren’t put under the same degree of scrutiny as properties on the general market. This means that there are going to be fewer potential buyers, along with fewer agents trying to get in on the deal. Being in the know on off-market properties and opportunities can give you a real edge over the competition, allowing you to expand your portfolio and engage in opportunities that most investors aren’t privy to.
Properties can be taken off-market for a variety of reasons, including the seller desiring more privacy and reducing the need for open houses and strangers in the building. They may also want to avoid the property sitting on the public market for too long, decreasing its desirability among potential buyers.
Finding off-market properties can do wonders for your investment business, helping you to grow a more varied, well-balanced portfolio. The benefits of dealing in these properties often stem from the difference in circumstances surrounding the transactions when compared with traditional investment opportunities.
The lack of publicization means that off-market properties aren’t on the radar for as many buyers or investors, meaning that you’ll be competing with fewer people to secure them. With less competition, you can create more convincing arguments throughout negotiations while also increasing the likelihood of securing a better deal.
When you consider the lack of competition and the presence of more motivated sellers, it makes it more likely to secure properties at fairer prices. With multiple investors and agents interested in a particular property, it becomes easier for the owner to manipulate the price to their advantage, often pushing things above and beyond the projected market value increase. This issue is far less common with off-market properties.
Generally, you can expect an off-market transition to be smoother and more efficient. Typical property sales require a lot of marketing, countless conversations, and seemingly endless house viewings to take place. With these transactions, you’ll find less noise and more meaningful discussions, leading to a faster sale process overall.
There’s usually a specific reason that a property isn’t on the general marketplace, meaning the investment opportunity will often be more distinct and different from the rest of your portfolio. Diversifying your portfolio is always a smart move, as it showcases your versatility and adaptability within the market.
Finding off-market properties might sound like a near-impossible feat, but by working smart and using the right strategies, it can be made a lot easier. We’ve put together this list of our 10 favorite methods for finding off-market properties in today’s marketplace.
This might sound outdated, and it will likely take a fairly hefty time investment, but sending out personalized letters, newsletters, and postcards to homeowners in your area can actually yield serious results. Showing these homeowners that you’re actively interested in buying their property can lead to responses from people who aren’t yet advertising in a public way.
Your reputation is everything in real estate. While it’s a remarkably competitive industry, there are ways to establish positive working relationships with agents, brokers, attorneys, and contractors. Professionals in the industry will know a lot about the state of the local market, which can often include information about exciting off-market opportunities.
While real estate auctions can be a little tough to come by, they can be a real gold mine for off-market properties. Whether the auction is taking place due to a foreclosure or for tax lien reasons, they often include off-market properties that are yet to hit the MLSs.
While most properties that you find online will show up on popular sites such as Zillow, you can also find off-market properties on personal listing platforms. Sites like Craigslist are good for browsing when on the hunt for unique opportunities.
When you know where to look, you’ll find various in-person and online forums for real estate investors. When you join them and actively participate in conversations, you can gain valuable insights into where to find off-market properties and the most exciting opportunities.
You can find off-market properties by scouring the records of local courthouses and online databases, which are often loaded with information about probate properties (post-death dealings), divorces, and housing defaults. This tip might sound a little cynical, but in reality, it’s a way to be of assistance in a real-life context while simultaneously expanding your portfolio.
Driving for dollars is the process of literally driving around neighborhoods that you’re interested in, searching for vacant or distressed properties, and then directly reaching out to the owners. CRM software solutions such as REsimpli feature Driving For Dollars applications to help streamline this process.
Many real estate wholesalers have off-market properties in their inventory, holding them back before finding the right investor to collaborate with. If you can find and build relationships with wholesalers, you can get easier access to these sorts of listings.
Estate sales often take place due to downsizing, life events, relocations, and deaths, much like the situations you might discover from public records. Within these sales, you can often find off-market opportunities, so keep your ear to the ground.
Remember that nothing in life is more valuable than a good conversation. If you stay in the know with your friends, family, work colleagues, and even friendly competitors, letting them know that you’re interested in off-market properties, it could come back around in a positive way. You never know where the next lead might come from.
By working these methods into your search strategy, finding off-market properties can become easier than ever. It’s not the kind of thing that happens every day, so don’t put all your eggs into the off-market basket—but knowing where to look is the first vital step.
Successful real estate investing, with the industry being as competitive as it is, can be hard to pull off without some versatility and uniqueness to your business. Off-market properties offer a different angle for you to work within, so you can set yourself up with the most varied portfolio possible.
With the potential for less competition, one-of-a-kind properties, and even lower prices, not taking an interest in off-market properties is an easy way to shoot yourself in the foot.
There’s not one best way to find off-market properties—it’s about tactically using these methods in conjunction with each other until you find the combination that sticks.
Put our methods into action today and start the search for a wider, more varied portfolio of properties. Check out our blog today for more top tips on working in real estate.