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Finding real estate investment opportunities through the Multiple Listing Service (MLS) is easier since there are dedicated platforms for it. However, some real estate investors opt for off-market listings for a plethora of reasons.
About 10% of home sales are off-market deals as they can offer endless investment opportunities. First, you need to know where to find off-market properties, and this article can help you with that to kickstart your investment journey.
1. Consulting Real Estate Agents
The best way to start is by contacting professionals who know their way around the real estate market. Real estate agents have established professional networks that can streamline the search, not to mention knowledge about the best off-market deals that suit your needs.
Find a real estate agent in the local area where the property you want to buy is. They'll do a better job at finding off-market deals and could even put you in touch with the property owners themselves. There are instances when the agent also has exclusive access to listings that are not yet listed on the MLS.
2. Researching Online Resources
Other buyers also look through non-MLS listings through online platforms like Craigslist, pocket listing services, or Facebook marketplace. Just be sure to do your due diligence when buying off-market properties through these sites.
While it's easier to find off-market properties online, you will also find deals that turn out to be scams. Look for red flags like unrealistically low prices or unsafe auction websites. Bogus off-market property listings are easier to publish than the ones listed on the MLS.
3. Direct Mail Marketing
You can send targeted emails to potential sellers to find off-market deals you can invest in. If they did not previously consider selling their rental property, they might do so now that there's an offer on the table.
This also means you'll have less competition or none at all. With no competitors, you can avoid a bidding war and pay for a lower sales price. Remember that finding a property is only half the battle, and you will still have to convince the owner that you are a serious buyer.
4. Direct Approach
Go to the neighborhood you're interested in having a rental property in and ask around. It's not advisable since it'll take a lot of effort to do so, but an in-person interaction may be more convincing than direct mail marketing.
You can even look into distressed properties or pre-foreclosures, given that an attractive offer will be more appealing to an owner than losing the home completely. If the owner is not around, you can look through public records to determine who you can contact.
5. Networking with Other Real Estate Investors
Chances are other real estate investors are also looking for off-market properties to purchase, or intend to sell one of the properties they already own. Networking gives you access to real estate deals you can bid on.
You might still want to consult real estate professionals like real estate agents or property managers to discover whether the off-market home is worth the investment, as they will know which up-and-coming properties are in certain locations.
Benefits of Buying an Off-Market Property
Reduced Competition
Since off-market property listings aren't widely advertised, you'll find fewer potential buyers looking to buy the property. You wouldn't need a competitive edge to acquire the property since others won't compete with the purchase.
Potential Savings
Without worrying about competition, you can strike better deals by negotiating the purchase price. The off-market home will likely be below fair market value, and you can potentially save money due to the lack of:
- Marketing costs
- Agent commission
- Listing site fees
Increase Privacy
Without using known platforms that tend to record MLS data, you can engage in a more private transaction with the seller. This can be beneficial to you if you prefer discretion over convenience.
Unique Access
Off-market listings don't usually schedule open houses or put up yard signs, which means that you can stay ahead and speak with the homeowners directly. You can ask them about important details about the property that are worth noting before finalizing the deal.
Less Stress
Many investors prefer pocket listings since they can avoid competition and tend to be short sales. Off-market properties won't have you going through a lot of red tape. It makes sense for investors who just want to get the deal over with and start their business as soon as they can.
Why are Off-Market Deals Uncommon?
There are downsides to off-market properties as well, which is why most buyers still opt for MLS listings. For one, a recent passage by the National Association of Realtors called the MLS Statement 8.0 Clear Cooperation Policy requires MLS members to submit the listing to the MLS within the same day, putting the property on public record.
On the bright side, sellers can still choose to stay out of the MLS IDX or Internet display. Office exclusives also allow agents to only share the listing with other agents, who can then present it to their clients, still making it private in the traditional sense.
Should I Hire Professional Help?
If you're new to real estate investing, then hiring professionals like real estate agents and property managers is advised. They can offer insights that most sellers won't tell you, allowing you to make informed decisions about your investments.
Even after purchasing a property, your work has only just begun. Once you turn your real estate into a rental property, responsibilities will start piling up. Between marketing your rental and handling day-to-day operations, even experienced landlords hire assistance.
With Income Property Advisors, can expect a steady stream of income coming your way as the business runs smoothly. You won't have to do any work— just sit back and relax, and we'll do everything on your behalf.
Leave your worries at the door. Contact us to learn more about our services and how our expert help can help you grow your rental business!
