Investors, who know the real estate market inside out, know that looking for investment opportunities on the marketplaces and the multi-listing service (MLS) is not enough — the most precious deals might be the ones you find off-market.
What is an OFF-MARKET DEAL exactly?
An off-market deal is a property for sale that is not marketed to the public on the MLS.
You may wonder WHY the agents are not listing the property in the most visible place where thousands of potential buyers may see it. Well, there may be a few reasons for it, but the most obvious ones are:
The seller wants to keep it private. Possibly, the owner doesn’t want to shoo off the tenants as they might think that renting conditions will change together with the owner.
The agent wants to save the effort. The agents are getting many requests from people who are just kicking the tires and have no real intention to buy the property. Thus, by advertising the property to a limited, and in many cases already hot buyers, the agents are saving the troubles and making the selling process much easier.
What`s in it for buyers?
Less competition. On highly-traffic sites, the offers are visible to thousands of potential buyers and agents. Chances are that the property you’ve noticed might slip through your fingers before you even make a phone call.
Lower prices. Less competition usually means lower prices. The investors specializing in off-market deals are building their strategies to get better prices. For example, they may offer to seal the deal on the same day in return for a discount.
Unique opportunities. Sometimes off-market deal means that the seller wants a fast and easy exit from the property. This means that the buyer is more likely to negotiate an attractive deal.
Where to find off-market deals?
It might take some time to get access to good off-market deals, as it is, in a way exclusive niche for the investors who always have an appetite and resources to purchase.
Here are a few ideas to help you get started:
- Establish networking: closer relationships with people involved in the real estate business, like other investors, local contractors, builders, agents, and brokers, may help you find great deals even before the seller commits to selling.
- Attend auctions: you may find foreclosed properties on the real estate actions for a low price. Keep in mind, though, that they may require a significant budget for the renovation. Consider all pros and cons before making a purchase.
- Get in touch with sellers directly: you may search for offers without a middleman, like “for sale by owner” marketplaces. Another way to approach sellers directly is by driving around the desired neighborhood and looking for “for sale” properties. It will help you get the conversation started with a property owner who might also be able to connect you with other home sellers in the area. This takes us back to the first bullet point: the broader your network, the better.
In the end, word of mouth is the best free advertisement. Once you start knowing more people in the desired location or the real estate business in general, it will be easier to find someone who knows someone who may have a deal for you.
Even though off-market deals are a great way to find properties to invest in, a bidding war may become very hot. To win, you need to make sure you have cash available at your disposal FAST and HUSTLE-FREE. Having Lending Bee as your hard money lender is very practical. We are committed to building long-term relationships with our customers based on trust and mutual benefit.
Buy right! Be ahead of your competitors with Lending Bee.