In real estate investing, off market properties are those that are selling (or have already been sold) without any public knowledge or advertising. These properties were once linked to only high-end properties, like celebrity homes. Now, this term has expanded to include investment properties that need an immediate sale.
You would be surprised to hear the number of income properties that are sold as off market properties that are not listed on any public real estate listing sites. Real estate investors are always on the hunt for these income properties. The question is: Do investment properties sold this way actually offer any benefits?
What Makes Off Market Properties Desirable?
Just like everything else in real estate investing, off market properties come with advantages for real estate investors.
- Sellers Benefit from a Private Sale: First of all, seeing that off market properties are not publicized, property investors can take advantage of this when they are looking to sell an investment property, but don’t want to prematurely disrupt their current tenants.
- Sellers Don’t Have to Commit: In addition, property investors who are thinking of selling in the near future can use off market properties to test the buying waters. There’s the option to accept an offer if one comes along, but they can take their time to look over the offers since competition is much lower.
- Buyers Gain a Competitive Advantage: Off market properties also benefit a real estate buyer – especially those in a real estate market where there are hundreds of other prospective buyers – because he/she would have to compete with only one or two other buyers. Thus, the chances of closing on an investment property will increase!
- Increased Time to Look over Properties: In a highly competitive real estate market, like New York, for example, real estate sellers expect a quick sale. However, with off market properties, since competition is lower, property owners who are not in a rush to sell allow prospective buyers to look over the property thoroughly before making an offer – which is a great advantage for real estate buyers!
- Flexible Negotiations: As a result of no time pressure, both parties can be far more relaxed and reasonable at the negotiating table. Buyers can negotiate over the price, the down payment, and any issues concerning an investment property directly with the seller.
5 Ways to Identify Off Market Properties in Any Real Estate Market
Work With Real Estate Agents
Real estate agents are professionals who have been in the real estate investing business for a very long time. So, it’s no surprise that these guys are the first who come to mind when looking for off market properties. A successful real estate agent knows the ins and outs of how to find any type of investment property in their market – not only off market properties.
The best way to identify off market properties when working with real estate agents is to first determine the real estate market or neighborhood in which you want to buy an investment property, and then contact a real estate agent who works in that market. That way, you ensure finding a real estate agent who is familiar with your market of choice and knows where unlisted investment properties for sale are located, and thus will save time when searching for local off market properties.
Related: The Best Ways to Find a Real Estate Agent
Another tip when working with real estate agents is to check if they have websites and other social media platforms like Facebook or Twitter. Some real estate agents share information about off market properties only to their contacts on these platforms. Thus, stay in touch with your real estate agent if you wish to find these income properties before anyone else!
Contact Real Estate Wholesalers
In real estate investing, wholesalers work as middlemen between a seller and a buyer. They can help property investors in identifying off market properties seeing as their job involves finding distressed sellers who haven’t listed their investment properties for sale yet. A real estate wholesaler will then work on assigning the investment property to a contract, finding an end-buyer and sell him/her this contact.
As a result, when you contact real estate wholesalers, they’ll add you to their list of prospective buyers and inform you about off market properties! Moreover, wholesalers typically convince property owners to sell their income properties for a significantly low price to ensure closing the deal. Thus, real estate investors should contact real estate wholesalers to identify cheap off market properties.
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Focus on Networking
Judging by the two mentioned ways of identifying off market properties, you can tell that you need to have a network to find income properties. After all, real estate investing is a people business, and since off market properties are not listed or advertised, people find out about them mostly through word-of-mouth. This is why networking is essential in real estate investing.
Related: 5 Key Factors for a Successful Real Estate Investing Career
Your network should not only include personal acquaintances like friends and family, but also anyone you meet throughout your career as a real estate investor. This includes other property investors, agents, wholesalers, local contractors, and real estate attorneys.
The best way to ensure finding off market properties from your network is to make your intentions known! Anyone in your inner-circle might have a deal up their sleeves, or probably knows someone else that does. Thus, don’t hesitate to inform them that you are looking for off market properties for sale.
Use Online Sources
As previously mentioned, some real estate agents have their own websites and social media platforms in which they share information regarding off market properties. Furthermore, there are websites which property investors could make use of.
Zillow, for example, allows real estate agents and sellers to advertise investment properties 30 days before they’re listed on the MLS and consider them as off market properties. Another example is Zenlist. This website allows you to find listings before they hit the market!
Using online websites is the easiest way to identify off market properties because any real estate investor can easily access such sites. Nevertheless, this results in having larger competition. Thus, if you want to find off market properties with less competition, it’s best to consider the previously mentioned methods.
Related: 6 of the Top Websites for Real Estate Investing
Don’t Forget Public Records and Direct Marketing
These two ways go hand in hand. Public records (such as local newspapers and state government websites) often mention real estate properties that will be selling soon, foreclosed homes, as well as expired listings. Real estate investors can then contact or send a direct mail to sellers of these off market properties saying that they want to negotiate a deal. This could be an incentive for sellers to contact the real estate investor, especially if they are desperate to get rid of their off market properties.
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Final Thoughts on Off Market Properties
The real estate investing world offers many opportunities for real estate investors to find investment properties for sale and make money off of them. Off market properties are those that are sold (or are selling) without being publically listed. They offer many advantages to property investors who can identify them. If you want to find an off market investment property in any real estate market with less competition and a quick sale, make sure you take the above-mentioned methods into account.
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