A property hits the MLS. Good location. Decent photos. Numbers look interesting. I see it. And so do 500 other investors.

So I have to ask myself: "What the hell do I know that they don’t?"

Maybe that's the wrong question. Some of the most interesting opportunities I've seen never started with a listing at all. They started with conversations. A contractor mentions an owner who's tired of the property. An attorney has a client dealing with an estate. A broker remembers something I told him six months ago. A neighbor knows who's thinking about selling. Another investor has a deal that's wrong for him but might be right for me.

That's the romantic version of the off-market deal. I knew before everybody else. And there's real value in that. If I'm talking to the owner before fifty buyers show up, I'm not necessarily competing against fifty offers. I may have time to understand what the seller actually wants. Maybe price isn't even the most important part.

But I have to be careful here. Off-market doesn't mean good. Sometimes nobody else knows about my wonderful secret deal because nobody has bothered to establish what it's actually worth. Sometimes “no competition” means I've found an opportunity. Sometimes it means I'm the only idiot in the room.

And the opposite is also true. A property can sit right there on the MLS where everybody can see it and still be an opportunity. Because seeing the same information doesn't mean understanding it the same way. Maybe I understand the neighborhood better. Maybe I know what the renovation actually costs. Maybe everybody else sees an ugly building while I know exactly what can (and cannot) be fixed. Maybe I've financed twenty properties like it and know where the numbers usually go wrong.

So perhaps there are really two advantages I can have: I can know about the deal before everybody else. Or: I can understand the deal better than everybody else. The first comes from relationships. The second comes from experience. And ideally, I'd like both.

That's why I'm beginning to think "off-market" itself isn't much of an investment thesis. Neither is "I found it on the MLS." Those only tell me where I found the property. They don't tell me why I should make money on it.

So when I find something that looks like an opportunity, maybe the question I need to ask myself isn't: "Where did I find this deal?" It's: "If everybody else knew everything I know about this property, would I still have an advantage?" And if the answer is no, then perhaps my entire edge is simply hoping nobody else finds out.