6 Ways To Find An Off-Market Deal
Most investors find property by working with a real estate agent and buying commercial property listed on the MLS, the Multiple Listing Service. Sellers market their property through their agent, and potential buyers like you make an offer. For investors, competition for the same asset can lead to bidding ware if multiple buyers are interested in the same building. We will discuss advantages of buying an off-market property.
Advantages of Buying Off Market
In a hot real estate market, you may end up paying more for a listed property than you would if you bought it off-market. Buying a property that is not currently listed on the MLS also means that seller will be saving brokerage fees, which typically range up to 6% of the price of the property which will be passed on to you. You can also anticipate a quicker closing and less of a hassle with an off-market deal, especially if the property is offered by a financially distressed owner.
Strategies for Finding Off Market Properties
Here are some strategies implemented by savvy real estate investors to find off market commercial property.
1. Use the Internet: You can create a website on your own to attract motivated sellers or you can find a company that specializes in off-market sales. Make sure to run the deal by your attorney to make sure it is sound.
2. Network with Professionals: As an investor, you doubtless have a team of professionals you work with and numerous other contacts. Put the word out that you are interested in buying a property that is not listed. Real estate agents, mortgage brokers, real estate attorneys and others may have leads for you. Banks are not usually helpful, since they almost always use the MLS.
3. Find a Wholesaler: Wholesalers maintain a Sellers List of homeowners who may be interested in their properties instead of listing with the MLS. Some wholesalers send out direct mail as well. As an investor, try to get on the Buyers List and direct mail list to find an off market property from a wholesaler. At the very least, you will learn about the market.
4. Signage: We’ve all seen the signs – “Quick Cash for your House,” “We Buy Ugly Houses,” and so on. You can put up a sign in the neighborhood where you are interested in buying. Be aware that these “bandit signs” may be barred in certain areas.
5. Direct Mail Marketing: Send out a postcards or a letters to solicit property that is not listed on the MLS. Purchase a mailing list that breaks down the demographics according to area, price or owner characteristics. A commercial printer can print up the postcards or letters, provide the mailing lists and mail them out for you in a one-stop-shop.
6. Look for Vacant Homes: An easy way to find a home that may not be listed on the MLS is to simply drive around and look for a vacant property. Once you find the properties, you have to identify the owners and contact them.
Tips for Finding Off Market Property
Check with your attorney to find out if there are any issues in purchasing off market property in the area you are interested in. You will probably be buying the property as-is, so be prepared to do some repairs. If you intend to do direct mail marketing, a list of inherited property can be especially helpful. Keep in mind that you may have to send out multiple postcards and letters to get a result.