Uncovering hidden gems can make all the difference in the competitive world of real estate investing. Off-market properties, often elusive yet highly lucrative, hold the potential for substantial returns. But how does one find these elusive opportunities? This comprehensive guide unveils the strategies and techniques savvy investors use to unlock the secrets of off-market properties.
Whether the homeowner is looking to engage in a private sales process or wants to test the waters, it can be challenging to find unlisted properties if you need help locating them. However, successful investors only knew where to look when they got started. Over time, investors cultivate unique methods that make it easier to identify unlisted homes. Learn how to find off-market properties in this guide.
1. Networking
To find high-quality properties that aren’t listed on the market, you’ll need to build a strong network that includes agents, other investors, and brokers. Experienced real estate professionals have industry knowledge that can be invaluable when you’re looking for an off-market property.
It’s common for sellers to be uncomfortable opening their homes up for showings, which is when they’ll explore an unlisted sale. In this scenario, real estate agents can’t use their marketing abilities to attract qualified buyers. Instead, they’ll turn to their network to see if anyone’s interested.
Once you’ve cultivated a strong network, you can tell the agents you know what types of properties you’re looking for. You’ll be among the first to see if they can access unlisted properties. The key to building a network is communication. Attend investment and real estate events to find people interested in guiding you to off-market properties.
2. Direct Mail Marketing
Direct mail marketing lets you reach potential sellers who may be on the fence about selling their properties. Make sure all marketing materials you send are personalized. These materials can include everything from letters and flyers to mailers.
Tell the owner of the property that you’re interested in buying it. If a homeowner is considering selling, getting your name to them before they’ve even listed their home may get them to contact you directly instead of testing the market. Before creating a direct mail marketing campaign, identify a handful of neighborhoods you’re interested in. Only include homes you can afford in your campaign.
3. Digital Marketing
Digital marketing has become an increasingly effective tool among savvy investors in recent years. With targeted digital advertising, you can attract potential sellers who still need to list their homes. Start this campaign by identifying your target audience.
Research is necessary before creating marketing materials that appeal to the homeowners you send them to. Ads on Facebook and other social media platforms can reach audiences interested in selling their properties off the market.
4. Driving for Dollars
Driving for Dollars is another form of direct marketing that’s highly effective in helping people find distressed or abandoned properties. It involves moving to neighborhoods and searching for properties that meet your specifications. While this technique can be used for off-market properties, you may also be able to identify vacant and distressed ones that won’t cost as much.
Before driving through neighborhoods, creating a list of things you need in a property is a good idea. If you know what you’re looking for, you can avoid wasting your time. This is the only way to collect the information you’ll uncover when driving through your target neighborhoods.
You’ll eventually need to reach out to the owners of the properties you’re interested in, which can pose a challenge. Make sure you take copious notes of homes you believe are vacant or distressed. Consider snapping a picture of each property as well. Once you’ve built a list, perform skip tracing to find each owner’s mailing address and phone number. You can contact them to express your interest in buying their home by placing a letter on their door, sending direct mail, or cold calling them.
5. Real Estate Agents
Finding off-market properties is made considerably easier by working with real estate agents. They have access to pocket listings and off-market opportunities that would otherwise be difficult to find. You can become friendly with real estate agents by attending open houses, scheduling meetings, and attending industry events.
Numerous services match investors and buyers with local real estate agents. By being informed of off-market opportunities early on, you can make a bid before anyone else.
6. Real Estate Events and Conferences
It’s always a good idea to attend real estate events and conferences. You can spend time networking and learning about off-market properties. These events are attended by like-minded individuals and potential sellers who may inform you of properties available for purchase. Always be ready to provide your phone number or business card. If you get any leads, follow up on them promptly.
7. Online Databases
While real estate agents are in a better position to know about off-market properties than most, there are several other resources you can tap into. For example, online databases like Mashvisor provide information about off-market properties. You can also find these properties on Craigslist and Facebook Marketplace.
Sellers using these databases may try to test the market or avoid agent fees. These platforms are viral among off-market investors, so it’s a good idea to check them daily and make an offer immediately when you find a good deal. Remember that some platforms have subscription fees you must pay before you gain access to these listings. For example, Foreclosure.com costs just under $40 per month after a seven-day free trial.
While many platforms with subscription fees are legitimate, consider why you use them before signing up. You can benefit from this if you regularly invest in off-market properties. On the other hand, you may not want to subscribe if you only plan on buying a single property.
8. Partnering with Other Investors
As touched upon previously, it’s highly recommended that you partner with other investors to find off-market properties. When you’re just getting started, reach out to experienced investors who know where to look and may not currently be buying. Look for local real estate investment groups and clubs in your area. Consider joining a professional association that helps you build your network with monthly meetings, lunches, and mixers.
Don’t view investors as the competition. From price and location to style and condition, each investor has rigid guidelines for what they want from a property. If you tell other investors what properties you’re looking for, they may contact you when they find one. You can also make your referrals in the future.
When forming partnerships and adding more people to your network, make sure you speak with a mixture of investors, contractors, agents, and builders. You can leverage your shared resources and knowledge by maintaining a network of different professionals.
9. Probate Agents
Probate real estate agents focus on selling homes currently being taken through the probate process, which occurs after the estateholder dies. These agents can give you insight into the real estate market and inform you of homes that are going through probate and may be ready to be purchased. This type of agent understands the process and steps it takes to sell a property in probate. When working with a real estate agent specializing in probate properties, you can rely on their expertise to guide you through the home-buying process.
10. Auction Sales
Auction sales are a great place to find off-market properties. These homes are often foreclosed and distressed properties that banks and similar financial institutions are selling. When a bank sells a foreclosed property, its goal is to offload the debt quickly, which means you can get a good deal on the home you’re interested in. Keep in mind that these properties are often in need of repairs. Do your due diligence before taking part in an auction.
While these sales are held regularly, the easiest way to find homes about to be auctioned off is by using platforms like Auction.com. You can find vacant and foreclosure properties from here by entering your zip code or city. You’ll find all the information you need on these listings. For example, most properties have an estimated resale value, which gives you an idea of how much profit you can make if you decide to fix and sell the home.
11. Real Estate Wholesalers
When trying to find off-market properties, consider working with real estate wholesalers. These individuals specialize in finding off-market deals and matching them with interested buyers. When sellers work with wholesale investors, they enter a contract that gives the wholesaler full rights to the home. They receive a fee for finding the right buyers, effectively making them intermediaries or third-party facilitators.
If you choose to work with a wholesaler, you’ll likely need to pay a fee between $5,000 and $10,000. Even though the wholesaler made a deal with the home’s owner, that person likely can’t afford the fee. When a wholesaler presents you with a deal, include this fee in your calculation to determine if you should proceed with the purchase.
Conclusion
Buying a home already listed on the market means dealing with other buyers and potentially entering bidding wars that you’ll lose. Instead of bypassing this process and increasing your chances of finding affordable properties, it’s better to search for off-market homes.
If these properties interest you, explore the methods detailed in this guide to help you find the right ones. From building a network to working with agents and investors, finding off-market properties is easy when you know what to do. Be persistent in your search for off-market homes. Before finalizing any deals, conduct thorough due diligence to ensure you’re making a good investment.