I LOVE OFF MARKET PROPERTIES! When I buy off market properties, I make so much more money. Not just in saving money from the purchase price, but also, my monthly cash flow goes up as well.
There are terrific properties out there for us investors as long as we know where to look. When I first got started investing in real estate, it was hard to find off market properties. With technology, it is so much easier than ever before.
The big question though is “How do you find investment properties that haven’t been listed”? These are properties that are often actively avoiding public exposure, that might not even be for sale yet.
As I was looking for great real estate investing deals, I was looking in every way possible. In all my looking for properties, I found many wrong ways and many right ways.
In this article, we are going to look at some of the best ways how to find off market properties for real estate investing. Here is a list of the best ways I found how to find off market properties.
- Wholesalers (My all time FAVORITE!)
- Direct Mail (post cards and yellow letters)
- Real Estate Agents (only certain ones are good)
- Contractors, Builders, and other pro’s
- Real Estate Auctions
- Public Records
- Driving For Dollars
- Other Investors
- Craigslist and Facebook Marketplace
First, Why Do People Sell Off Market?
Off market properties, or pocket listings, have three main advantages for sellers: privacy, a lower commission, and cachet.
There are a lot of reasons a seller might want a private sales process; maybe they have life issues like a divorce, or a death in the family, that could complicate a conventional sale.
Or they might just be averse to having photos of their home and their belongings on the internet, available to anyone who clicks.
Not to mention the browsers who’ll parade through their home every time they have an open house.
In general, you want to get as many eyeballs on your property as possible through marketing services like the MLS. However, sellers can save big on commissions by forgoing listing and agent fees.
Commission on an off market sale is lower because there isn’t a listing agent involved; that alone will halve the typical 6% commission.
Off market properties are intriguing to buyers because they offer exclusivity, and a lack of competition.
In some hot markets, buying off the market is the only way to avoid a long, drawn out bidding war.
Off market deals are often the best deals because you’re not competing with as many buyers.
So How Do You Find Off Market Properties?
Finding off market properties takes a little ingenuity, a little networking, and a lot of luck. Here are some sources to get you started.
It is honestly not hard but it does take some work.
Just like any business you are building, it the longer you are doing it the more deals will come to you. Over time, you will have a pipeline of deals coming in because of the work you put in a few months prior.
ALL TIME BEST! Wholesalers!
I have bought so many properties off wholesalers because they are awesome!
They are basically just like a realtor but, in my opinion, they work much harder. Their job is to find both sellers AND buyers.
First, they do everything we are talking about in this article. They are finding using the methods how to find off market properties to get them under contract.
Once they have the off market deal under contract, they assign or sell it to and investor like me who will pay them for their work.
It is not uncommon to pay $2,000 to $5,000 for the deal.
I surely do not mind paying their fee because they did all the work! I wake up every morning, drink my coffee, check my email and go through all the different properties that my wholesalers send me.
It is amazing to get deals delivered right to your email!
It’s an inelegant solution, but it can be very effective.
There are a lot of homeowners who want to sell and just need a little nudge to take the plunge.
Blanketing your target area with mailers that explain you’re looking to buy properties can bring in opportunities that didn’t even exist until your mailer hit the mailbox.
Experts advise to be persistent, if you take the direct mail route; your first or even second wave might not bring in the type of leads you’re hoping for.
It’s often a numbers game: If you can send out 1000 emails with a 10% reply rate, you’re looking at 100 potential deals.
That’s a 100 properties where you’re dealing with little to no competition – a treasure trove of deals waits for buyers who do direct mailing correctly.
Real Estate Agents
No one knows the market better than real estate agents.
Once you’ve networked with your local agents, let them know exactly what you’re looking for, and where you’re looking for it, and they could end up bringing your next investment right to your doorstep.
If you know agents who specialize in the areas you’re targeting for investment, make sure you check on their office’s website regularly; they’ll likely post their exclusive pocket listings on the site.
Builders and Contractors
Tradesmen are a vital part of the real estate ecosystem, and they can be an excellent source of off market intelligence.
Builders can clue you in on projects that were abandoned when financing dried up, and contractors can tip to properties.
Since these professionals are always working around properties, they can tip you off about renovated properties that are about to hit the market, or landlords who are ready to sell, but just need that little push.
Just remember that when you’re building out your network, be up front and transparent about what you want.
Don’t pretend that you might be offering them work, just to get access to tips.
Real Estate Auctions
Auctions are a great clearinghouse for off market properties and, depending on the competition, can be a fantastic source of value.
Monitor your local auction house websites, the county courthouse, and national auction sites like Auction.com or RealtyTrac to find suitable investment properties.
You’ll mostly be looking at foreclosures and REOs. Foreclosures can be a great deal, but you must do your research beforehand, to make sure they don’t come with liens or other debt obligations attached.
REOs are properties that failed to sell at foreclosure auction, and are now owned by the lenders.
These can be an even better source of value, but keep in mind that many of these properties went unsold for a reason.
If you see a tempting deal, make sure to have the property inspected before you make an offer.
If foreclosure auctions have too much competition for you, you can often find out about short sales and pre-foreclosures through public records.
This can get you a crucial lead on other investors.
Monitor local newspapers and local government websites to find out about these deals; the website HUD Home Store also lists properties regularly.
In the same vein, sifting through expired listings can yield surprising leads.
These owners may think their homes are unsellable, and might welcome an offer; after seeing their home languish on the market without selling, they might be ready to negotiate, too.
And while you’re searching through expired listings, you might as well give Craigslist a look; it can be chaotic, but there are some deals to be found there.
Driving for Dollars
This is a trendy term for driving around and looking for houses that you can buy.
Experts suggest you should look for homes that look abandoned or distressed.
Owners who are absent or are struggling with maintenance might welcome an offer.
Once you’ve scouted an area, and recorded some promising addresses, use county records to track down owners and make them an offer.
Other Investors are Great Sources of Off Market Properties
Real estate investing is like the board game Monopoly.
You buy one piece of property, rent it out for a while and grow your cash on hand.
Then, you add more properties to your land.
After a while, you sell those properties and turn them into Hotels. That is where the real money is.
Now, this is exactly why other investors are terrific. They have good properties that are making money for them and they want to move up into larger properties.
That is when they are willing to sell it as a off market property to you and then move their money into another deal.
Craigslist and Facebook Marketplace can be great places for off market properties
Doing a search on either one of these platforms will show many properties in your area that are possibly off market.
Do a search in your area for properties for sale and you will most likely find many off market properties there.
The Takeaway On How to Find Off Market Properties
If you review the list above, you’ll see one big commonality: networking.
Whether you’re tapping into the knowledge base of your local real estate agents, or getting tips from contractors, the best way to find off-market properties is to build up your network, and establish yourself and your brand.
Solitary strategies like driving for dollars or sending out direct mailers can definitely yield results.
In the long term, you’ll get the best returns if you build up an organic system that doesn’t just reveal potential investments, but actually brings them to you.
- Everything You Need to Know About the EIN Number and How To Get One
- What Is a Land Contract and How to Buy Real Estate with No or Low Money Down
- Qualified Retirement Plan Account (QRP) with Damion Lupo
- Get Funding for Real Estate Investing with Real Estate Leverage
- What Does House Poor Mean and How to Not Fall Into The House Poor Trap
Premium online courses for any level of investor: beginner-advanced. Completely go at your own pace and can be taken through "Self-Study" or through "Membership".
Inside the membership, attend live 90-minute Group Coaching sessions with Coach Dustin Heiner as he and the MPI Coaches teach you how to build a successful real estate investing business.
Connect with the MPI Coaches and the other like-minded investors inside the MPI Mastermind Community. Ask questions about investing and get feedback how to be successful in your business.