I've been scanning Zillow, Redfin, Realtor, and Trulia looking for solid Small Multifamily deals in the Worcester area. I've noticed that as inventory has dropped the only available properties are rising in price and starting to lose profitability (I am planning on either going through an HML or using an FHA loan and live in the building so my mortgage payments will be fairly high regardless). I've only seen a couple listings on Craigslist for multi families in the area that are FSBO but none that cash flow well considering they require almost total renovation.
I know there must be a decent amount of off market deals circulating in the area as it is a hot market. Where are people finding these deals? Wholesalers? Pocket Listings? Are people doing their own marketing to sellers? Any insight on the subject would be greatly appreciated.
We have begun our own marketing on the off market properties in the area. I actually found the one I have under agreement in Fitchburg through Black Diamond Facebook group. There are many wholesaler groups on social media, its a matter of finding them. This will help your flow of off market properties. Also, a BP tip I like is you can call for Rent signs to see if the owner wants to sell instead.
I am a newer RE professional too. Since October I have been sending out about 500 yellow letter mailers/ month & cold calling high equity absentee owners (searching for tired landlords) & expired listings. Despite the cold calling & mailers (which have been getting responses, just no solid deals yet besides a few who are interested in selling for astronomical prices and other people calling back and telling me they're looking for more properties too! lol) the 2 closed deals I have gotten have come from calling owners of Rental Listings and asking if they have any properties they are looking to sell. Was able to get a 9 unit on Houghton St. & 3 unit on Fairfax. Both closed with cash buyers, waived mortgage contingency and waived inspection... It will be tough to find off-market deals with FHA financing but that doesn't mean it's not possible!
I would definitely talk to Agents who move a lot of multi-families in the area like Brian Allen & also join some of the MA FB groups too and post your buying criteria, financing method and also request that everyone adds your email to their buyers list.
Thanks for the kind words guys. There is a lot of off market small multi in Worcester, honestly there is a lot more for sale OFF MARKET than on the MLS. Currently there are 27 Multis in Worcester on MLS. We work with property owners who individually own more properties than that. Keep in mind that OFF MARKET DOES NOT MEAN A DISCOUNT. Do not confuse these things. Simply put you can have a conversation on price instead of bidding against yourself. That is what off-market does for you.
@Andrew Sprague off-market deals are great, sometimes, but they almost always come with a bit of hair on them. We only do multifamily and 3 of my agents are in Worcester, I'd say more than half of our deals still come from MLS but the good ones only last a couple days on the market. I myself have 2 properties under agreement and are negotiating offers on 3 properties for my personal portfolio. 4/5 of those were from MLS and I don't overpay for properties. The trick is to identify them quickly, go see them ASAP, and then be decisive about whether or not we're going after it. If we go after it we'd shoot our best shot and give them 24 hours to decide otherwise we have other properties we'll go look at over the weekend. Offer deadlines are a suggestion and should be treated as such, there is almost always a "lock it up today" price.
You’ll have to be prepared to go over asking but You don’t need to overpay. There are plenty of multis that hit the market at a discount we just identify them and lock them up before others get a chance to see them.
I would try to avoid HML on your first property. If you find a fixer upper use the FHA 203k product and get access to super cheap money. You'll learn a ton and can use hard money on your next property.
I hope this helps, let me know if you have any questions.