Do you Buy MLS or Off Market?

26 Replies

I'm guessing the answer is "whatever is a deal", but just curious if you find most of them off-market or if you ever buy off MLS. Just curious..

@Zack Thiesen

Every investor has different way(s) they acquire properties.  I buy properties from:

  • - online REO auctions
    - from the MLS (criteria: 90+ days on market with specific keywords in my search criteria)
  • - Tax Sale auctions (Upset & Judicial sale)
  • - Wholesalers

      Originally posted by @Zack Thiesen :

      I'm guessing the answer is "whatever is a deal", but just curious if you find most of them off-market or if you ever buy off MLS. Just curious..

       You are correct in that as long as the property aligns with your goals and the numbers make sense that it doesn't matter where you found it. 

      But it's largely market dependent. Here in CO Springs it's very difficult to find a property on the MLS that makes any sense. In fact, even wholesale "deals" are regularly getting bid up to absurd prices. Myself and most other investors I know are looking off-market as that tends to be the only place to find properties that cash flow.

      In general, if something is on the MLS the exposure will make it far more likely to be bid up to market value whereas with off-market properties you don't have that. I have friends locally who invest elsewhere and are able to find properties that cash flow on the MLS in OOS markets so it depends where you are.

      Thank you @Michael Nyszczot for your reply. I thought it would be interesting to see people's replies for their best and most often used method of finding deals. I was wondering if most things that remain on the MLS for a long time are suspect/picked over or truly just waiting for the right buyer, time or price offer.

      @Daniel Haberkost I have noticed that in several markets, that it's impossible to find anything that makes sense as an investment on MLS. In my local market here in CA, anything placed on MLS at a decent price is just bidding war bait. The answer to the question depends a lot of what part of the market cycle you're in too I guess. I found a house here I rent now back in 2016 on the MLS and had been on the market for over a year and turned out great for me.

      In other markets I'm looking at for investments, it seems like there are plenty of MLS deals too for the right buyer. But I am newer to investing so also trying to learn more about buying at auction and how to find good wholesalers since I'd like to see what that side of it is like.

      @Zack Thiesen yep the stage of the market cycle plays a big role in it too. Right now there's plenty of capital available but a lack of deals and vice-a-versa in periods such as 2008/2009. I've met most of the wholesalers I know at local meetups, do you go to any in your area?

      @Daniel Haberkost True, I myself am trying to take advantage of the current trend and sell high on a property and then take that capital and find somewhere where deals can still be had. The market makes it a challenge to have your cake and eat it too, hahh. But that's how it goes.. 

      That being said I have not done any local meetups although I should! I'm not really looking to invest where I am in the near future at least but meetups certainly seem like a great way to do it. I have friends and many clients who own rentals and we'll discuss that part out our lives sometimes but it would be nice to get involved in a strictly REI-focused meeting. Wherever I invest I will certainly be looking to make and maintain those kind of relationships in person.

      I’ve only bought one property out of state so far. In my limited experience I found buying “on market” deals to be difficult. Too much competition from other investors willing to pay too much. 

      Almost Everything off market .. however I recently broke my rule And did put one under contract last week . It’s a nice 3 bed two story . I paid 7k for it so I can’t complain. I guess there’s a few out there if you look hard enough

      MLS at the moment. 2 that I've found have been properties that were relisted due to contracts busting. 1st had 3 contracts bust. 2nd had a cash buyer back out due to a probate issue that was going to delay closing. It was actually being taken off market, but Redfin flagged it for a day as back on market. I'd already ran #'s, knew it was a good deal. My realtor knew the listing agent. Got it under contract with an extended closing period to allow them to clear title.

      Most wholesalers in my area are delusional in their asking price, rents, and ARV's. It's probably less than 5% of wholesale properties that are even worth running numbers on.


      One thing I'm really curious about is whether anyone sources deals from BP marketplace. I literally never hear anyone reference it on forums or podcast. 

      @Zack Thiesen I'm guessing you are asking about single family homes? When I used to buy SFH and multifamily, I bought them on MLS and negotiated hard. Now I only buy mobile home parks, I buy 60% from mobilehomeparkstore.com, 40% off market deals from my broker/seller relationships. In case any of you are interested in mobile home park investment - that's where I buy.

      @Micheal Briscoe very useful to know, thank you so much. I had read that wholesalers will often inflate their numbers just as landlords advertising inflated rent rolls in the copy of their listings. I think if I were to find a wholesaler I would ask another investor for a reference. what is the way you've found decent wholesalers?

      @Kalen Jordan I would also be interested to know.. I've gotten a few "cold call" copy/paste wholesaler intros into my inbox too. Not sure how I feel about that. I suppose that's why I asked my initial question because I wanted to at least weed out what others might know to be fruitless paths to good properties. Thanks for the reply

      @Zack Thiesen

      I deal with mobile homes so there are many sources to find deals.

      Repos, park owners, individual owners, MLS, etc.

      You can do things with mobile homes that you can't with real estate so some of my best deals have come from the MLS! :)

      Originally posted by @Zack Thiesen :

      @Kalen Jordan I would also be interested to know.. I've gotten a few "cold call" copy/paste wholesaler intros into my inbox too. Not sure how I feel about that. I suppose that's why I asked my initial question because I wanted to at least weed out what others might know to be fruitless paths to good properties. Thanks for the reply

      Yeah from everything I hear on the podcast it seems like half of people use MLS and the other half it's all about relationships.


      So I'm kind of assuming without a magical relationship that most of what I'm seeing isn't a "good deal" but I'm probably misunderstanding 😂

       

      Originally posted by @Zack Thiesen :

      @Micheal Briscoe very useful to know, thank you so much. I had read that wholesalers will often inflate their numbers just as landlords advertising inflated rent rolls in the copy of their listings. I think if I were to find a wholesaler I would ask another investor for a reference. what is the way you've found decent wholesalers?

      Local Facebook groups are the only place I've networked with wholesalers. On a few distribution lists. Lots push their offerings in the groups with their absurd numbers. Once you know your market well enough, you'll know immediately whether their ARV's and rent projections are in the ballpark. As for their repair estimates, that's a laugh too. Lots of ‘no repairs needed' and they haven't been updated in decades with with dirty carpets, etc.


      I’ve not seen a wholesale deal yet in my market that makes sense utilizing hard money.  The few I have looked into would’ve been alright for cash buyers.  YMMV

       

      @Zack Thiesen

      My last three purchases have been; FSBO with a sign in the yard on the block where I already own, word of mouth through BP, and contacting somebody with a duplex for rent and asking if he'd rather sell instead. I have been outbid on every single MLS listing I've tried to buy for the last two years.

      @Jerry Lucker thanks for the reply. I'm enjoying the variety of answers I'm getting, it's illuminating for sure. I've never considered mobile homes.. what are some of the main ways that you favor them?

      @Anthony Wick I really like that idea of approaching the duplex owner with the for rent sign, that's a great idea. And it's the same here in my market for value-add opportunities on the MLS, I dont even try anymore. Snapped up in minutes at well over asking and all-cash. Most of the times the price seems truly foolish.. FOMO is a killer. A lot of people moving here from the SF Bay and to a family trying to find a house it all seems like a steal to them I'm sure.

      @Zack Thiesen

      The seller was going to retire the following year and sell, so after some negotiation we worked out a deal. My last duplex that was FSBO was a non motivated seller. But we had a few beers, no real estate agents, and managed to work out a deal.

      None of these got me a home run, but they were decent deals and I manage to cash flow a couple hundred per door.

      I’m a part timer with a W2 job, so I can be fairly picky and buy more, or not buy more. But ya, I have no idea how a lot of people are making any money on what they’re paying around here.

      @Zack Thiesen I have done about 500 in the Cleveland markets. Maybe 10 were from MLS, . HOWEVER like I tell many, who cares where it comes from, as long as its a deal. But most great deals do not come from MLS . I can get as many as I want off market withOUT ever doing any mass email blasts, or marketing .

      Its ALL about your network/ team 

      Good luck 

      @Zack Thiesen

      Both, there can be good opportunities on and off market. I've bought one house on the MLS and I've bought a house off market. As long as the property fits your criteria.

      I continue to network and work referral base (one realtor at a meetup started a referral chain for me of 15 units) as that has best ROI long term. In the meantime, I hustle the marketing pretty hard. That's the bread and butter.

      MLS has been a waste of time for me. Honestly no idea how ppl use the MLS effectively.

      I've bought a dozen units or so from wholesalers but those deals can be rough. They are too lazy to work for their fee and want everything to be the buyer's problem.