In a competitive real estate market getting ahead of the competition is important. That’s why many real estate investors use a variety of strategies to find off-market properties.
The best opportunities are the ones that haven’t hit the market yet. But how do you find properties, and sellers, that haven’t made their desire to sell clear yet? Real estate investors use a variety of tactics and connections to find people who are in a position that makes them more likely to sell.
While finding off-market properties isn’t easy, it can give you access to opportunities and properties that you may have had to fight, and pay more for, down the line. So if you want to start looking for off market properties where do you start?
What Are Off-Market Properties?
First things first is the definition of off-market properties. Off-market properties, often called pocket listings, are simply properties that are for sale that have not hit the market yet. An off-market property will not be advertised to the public as for sale. These properties could be ones close to foreclosure, properties that the owners are planning to sell soon or properties that sellers are likely to part with but need a little convincing.
Because they aren’t listed on any real estate website or have any indication that they may soon be for sale, off-market properties can be difficult to spot – but not impossible. Real estate investors have a number of tricks and tactics they use to find the best off-market properties in their area.
What Are The Benefits Of Off-Market Properties?
Off-market properties are highly sought after by real estate investors for a number of reasons. Firstly they often have a lot less competition. If a property is not advertised as being for sale the likelihood of many other parties being in the negotiation is low. This gives you an advantage when negotiating for a deal. If you get in there first and a seller is eager to get rid of a property you could face no competition – certainly a desirable situation in any real estate deal.
Second, you could end up getting a great deal and wind up paying less than you would if the property hit the market. Getting in touch with a seller before their property goes public gives you the time to make your case and negotiate for a deal before they get inundated with interest. If the seller is interested in unloading the property fast you are in a great position! Also there is less competition driving up the price. The lower price and faster negotiation is why investors are so motivated to find these kinds of properties.
Where To Find Off-Market Properties
So if off-market properties aren’t included in MLS or real estate websites where can you find these opportunities? Investors have a number of tactics for finding hidden opportunities. Here are six of the best ones…
Driving For Dollars
One way an investor can find off-market properties in their desired area is by using the classic tactic of driving for dollars. When an investor drives for dollars they are quite literally driving around a neighborhood looking for homes that may have interested sellers.
Usually homes that seem abandoned or have fallen into disrepair or are significantly outdated have sellers that can be motivated to sell quickly. The key is looking for homes that signify absent or out of state owners. The logic is if they have let the property fall into disrepair they would probably rather offload it than maintain it. These properties can be a great find, especially in a highly sought after neighborhood.
Agents and Brokers
It is no secret that if you want information on a local real estate market you should look for the top agents and brokers in the area. These real estate professionals are experts in their area and even though they cannot represent off-market properties, they may know homeowners that are moving towards selling.
Your best bet is to use your existing relationships to learn more about what sellers in the area may be interested in selling to you. If you don’t know any real estate agents or brokers in your desired area, do a little research to find the top agents and reach out to start a relationship. Real estate agents are always a great resource!
Direct Mail Marketing
One of the best ways to get in touch with potential sellers is through direct mail marketing. Something as simple as sending out postcards can bring in leads you may not have known about otherwise.
The key to success is narrowing down your area of interest and creating a sending list of the homes that fit your requirements. You can create a list like this in minutes using Invelo’s powerful List Builder tool. Narrow down your search by location, home size, bedrooms and more to create a lead list that is as specific as you want.
From there really hone in on the homeowners that you are trying to reach. What kind of messaging would best resonate with them? Once you nail down the details, create attractive and informative real estate postcards and start them on a sending schedule – another thing you can do right in Invelo! Your first postcard may not bring in leads but your second might, or third or fourth or fifth!
The great thing about direct mail is that it is relatively inexpensive, especially when you are sending a lot of postcards. They are also more likely to get noticed than an email because the recipient has to physically look at it before throwing it away. If someone is thinking about selling your postcard could be the push they need.
Builders and Contractors
You may not think of them as resources for finding properties but local builders and contractors can be great to have on your side. These professionals work on homes directly and talk to homeowners and people living in your desired neighborhood. They are the definition of ‘in the know!’
Connect with a few contractors in your area and let them know what you are looking for and offer a referral reward. If a homeowner is fixing up a property in order to sell it these people will know first and can alert you to get in contact with the owner before it hits the market.
If you have existing relationships with builders and contractors let them know that you are searching for properties. You never know what they have heard or seen!
It is also prudent to form relationships with prominent wholesalers in your area to find good deals. Wholesalers' entire business hinges on finding fast opportunities and connecting them with investors. If you form relationships with wholesalers in your desired area they will know what you are looking for and can connect you before they begin to advertise their properties.
You can often find good deals if you connect with a wholesaler who knows what you want.
Real estate is equal parts ‘what you know’ and ‘who you know.’ One of your biggest assets in real estate is your network of contacts. Connecting with real estate professionals, tradesmen and even other investors can connect you with great off-market deals.
Build your network by being vocal about what you are looking for and where you are looking for it. If people know what you are looking for they can connect you when they find something you would be interested in. The more eyes and ears on your side the better.
If you are looking for a true deal in real estate you might want to focus on finding off market properties. If you haven’t done it before, start by looking at your network of contacts and thinking about how each person could be a resource for you. From there start communicating with more and more professionals in your desired area. The more resources you have out there the better your chances are for finding a hidden gem.
If you know where you want to buy, create a mailing list and start sending out direct mail postcards to drum up some leads! You can do all of that right on Invelo in a matter of minutes.