Off market property has become a popular buzzword in real estate circles. Real estate investors are always looking for a great off market deal that will maximize their returns. In this post, you will learn what off market means, what the advantages of buying off market properties are, and what the best strategies to find deals in 2021 are.
What does off market mean?
An off market property – unlike a house that’s on the market – is basically a home for sale that is not publicly advertised on platforms like the MLS, Zillow, Craigslist, and Facebook as well as in real estate magazines or local newspapers. It could also refer to a home that the owner is thinking of selling but hasn’t actively begun to pursue the sale yet.
So why do homeowners choose to sell their rental property without advertising?
- To retain privacy – The seller might be dealing with a situation like bankruptcy or divorce which he/she doesn’t want become public.
- To create a sense of exclusivity – Keeping property off market creates the impression that the sale is a secret only known by a few. As a result, the seller can negotiate a higher price.
- To lower agent commissions – Since off market homes are not advertised on the MLS homesearch, sellers don’t have to pay much in terms of agent commissions.
- To minimize foot traffic – Some sellers don’t want the hassle that comes with public listings. They want to avoid the constant open houses or showings for potential buyers.
Benefits of buying off market properties
This type of properties offer benefits not only to the seller but also to the buy, especially if this is a real estate investor. Here are some of the advantages of pursuing off market real estate deals:
- Face less competition – Public listings can attract a lot of competition. This could result in bidding wars with other potential buyers, thus driving the home value higher. With off market properties for sale, there is little or no competition. Since there are no competing offers, you can negotiate a favorable price with the seller.
- Save time and money – Hiring someone to find listed properties on your behalf can be both expensive and time-consuming. Buying off market properties means that you are dealing with the homeowner directly. You can therefore close deals much faster and save on commission costs.
- Get access to unlimited supply – The MLS and other listings might only have a few income properties that match your real estate investment criteria. However, off market properties present you with unlimited options.
How to find off market properties in 2021
Wondering how to find a home for sale? Here are some of the strategies you could use to find off market homes for sale:
1. Work with wholesalers
Real estate wholesalers act as middlemen between property sellers and buyers. Wholesaling real estate basically involves finding a discounted property for sale, placing it under contract, and then assigning the contract to the end buyer at a higher price. For example, the seller could sign a contract for $250,000 and then reassign it for $315,000. The difference of $65,000 is the wholesaler’s assignment fee or finder’s fee.
Before buying from a wholesaler, be sure to conduct a home inspection to find out the amount of repair and renovation required. This will show you whether the asking price is justified or not.
2. Real estate auctions
A real estate auction is another great place to find off market property deals. Popular real estate auction websites include Auction.com, Hubzu, Williams and Williams, Bid4Assets.com, Concierge Auctions, and Foreclosure.com. You can also find real estate auctions advertised in your local newspapers or magazines. With auctions ,however, you might have to incur fees such as buyer’s premium, auction service fee, earnest money, technology fee, and transfer fees.
3. Driving for dollars
Though a traditional strategy, driving for dollars can be very effective in finding off market properties. As the name suggests, it involves driving around neighborhoods looking for deals. Keep an eye out for homes that appear vacant or distressed. Such homes are usually characterized by boarded up windows, overgrown yards, uncollected mail, and general neglect. As you come across such homes, write down the addresses.
How do you find out who owns a property? Simply visit your county offices and make a search using the address. You should be able to get the name and phone number of the homeowner.
Or there is an even easier and more efficient way. You can use the Mashboard, one of Mashvisor’s must-have real estate investment tools in 2021. You can search for property owners in a certain city or by zip code to find out the name, email address, and phone number of the property owner. With Professional subscription to Mashvisor, you can even reach out to homeowners by email through our user-friendly interface.
Reach out and express your interest in purchasing the property.
4. Contractors and builders
Local contractors and builders are constantly working with homeowners. As a result, they are often among the first to know when a property is about to be sold, even before it gets officially listed. If you have a good rapport with contractors, builders, and other tradesmen, they can lead you directly to off market properties in your area.
5. Mashvisor Property Marketplace
However, the Mashvisor Property Marketplace is by far the best platform for finding off market properties for sale in 2021. Using big data and predictive analytics for real estate market analysis, you can find lucrative investment opportunities anywhere in the US housing market. This list of houses for sale includes bank owned home, short sales, auction homes, foreclosures and pre-foreclosures. To find the exact investment property that you are looking for, you can use filters like location, budget, property type, number of bedrooms, number of bathrooms, preferred rental strategy, and return on investment. Emails and phone numbers of property owners are readily available on this platform.
The cool thing about this online marketplace is that you can not only find but also analyze the investment potential of rental properties for sale. This will show you whether the deal is worth it or not. Using the Investment Property Calculator, you can estimate the startup costs, monthly expenses, rental income, cash flow, occupancy rate, cap rate, and cash on cash return of any residential real estate property in the US, whether on the market or off the market. The estimates are based on actual rental comps and sales in the area which makes them very accurate and highly reliable.
Direct mail marketing, working with real estate agents, checking public records, and networking with other investors are alternative strategies for finding off market properties. However, some of these traditional strategies are not very effective. For best result, use real estate investment tools like the Mashvisor Property Marketplace and the Investment Property Calculator.
Related: How to Find Off Market Properties
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