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Why Off Market Real Estate Deals Should Be Added To Your Investment Portfolio

Off market real estate deals are great for investors looking to gain an edge over their competition. While it may seem like supply is low and demand is high (making it more difficult to find deals) what you may not know is that hundreds of properties are sold each month without ever being listed on the MLS. These pocket listings don’t have to break the bank either! In fact, implementing the following tips will make it easier than ever to find off market properties at great prices.

What Does Off Market Mean In Real Estate?

In real estate, “off market” simply means that the listing broker is not submitting the property to the MLS (and by association all websites that feed off the MLS like Trulia, Zillow, etc.) The only way the property sale is made known is typically by word of mouth through the broker or the broker’s network — no public advertising occurs.

off market real estate deals

Where & How To Find Off Market Real Estate: 9 Secrets For Success

  • Direct Mail Marketing. One of the most efficient way to find off market real estate deals is through direct mail marketing. Define your target home seller and send out postcards or other ads that express your interest in purchasing their homes. Purchasing an ad in your local newspaper is an easy way to market directly and as it turns out, is extremely effective and budget friendly. Sometimes, homeowners don’t even know they are ready to sell unless they are presented with an attractive offer. Before implementing this marketing strategy however, be sure to mind your due diligence. Not only should you research the traits of your target audience, but also, the best ad venues to reach your ideal customer. From postcards, to yellow letters to bus bench ads, the options are endless.
  • Online. While online websites like Zillow and Trulia primarily feature properties listed on the MLS, they can be used occasionally to find off market deals. How? Take Zillow for example. Zillow allows sellers to list their properties 30 days before the property is listed on the MLS. To take advantage of this, investors should track these sites regularly so that they stay ahead of the competition.
  • Networking. Networking is arguably the best lead generation strategy in the real estate world and that holds true with off market properties. If networking isn’t your “thing”, it’s time to change that because you never know who you’ll run into at your local REI meeting place. Perhaps you come across a real estate attorney and hit it off instantly. Chances are, that attorney has connections with issues or creditors who want to move properties off their books.
  • Real Estate Agents. Just because real estate agents are most familiar with properties on the MLS doesn’t mean they aren’t just as savvy when it comes to finding off market deals. To improve your chances of success and to get ahead of the competition, contact a realtor (or realtors for that matter) who are familiar and have experience with the market you wish to purchase in. Agents are often privy to which properties are just about to go on the market. So if you make friendly with realtors in your market, they make be willing to give you the skinny on properties before those properties are offered to the general public. Before reaching out to an agent, be sure to check their website; often times, their pocket listings will be cataloged online.
  • Builders and Contractors. In addition to real estate agents, builders and contractors are good friends to have if you’re an investor looking to find hot off market deals. Local builders are usually “in the know” about properties where the homeowner or investor abandoned the job mid project because he or she didn’t have the financing to finish the construction. While this situation is unfortunate for the poor sap who failed to properly think through then scope of the deal, it can be quite fortunate for the investor ready to swoop in, finish the job, and turn a profit at closing. Contractors and other tradesman are constantly in touch with people in the business and if you’re lucky, they can directly lead you to pocket listings in your local area. Just be sure you’re completely transparent throughout all your networking experiences. Let people know you are an investor looking for off market properties. This way, you will begin to earn the trust and build the respect of other real estate professionals in your market.
  • Wholesalers. Wholesalers are great friends to have if you’re an investor looking for off market properties. Why? Because wholesalers specialize in just that. Real estate wholesaling, at its core, consists of finding a discounted property, putting it under contract, assigning the contract to a potential buyer, and charging that new buyer a fee. Often times, those discounted properties wholesalers find are off market properties. Keep in mind however, that working with a wholesaler is like working with middleman meaning you likely won’t get as good of a deal as if you went directly to the source. But networking with wholesalers in general is a great way to stay in the loop of off market homes in your area.
  • Public Record. Local newspapers and state government website will occasionally mention real estate properties that are soon to be listed. You might find expired listings in which case you could contact the seller directly in order to negotiate a great deal. Public records can also reveal foreclosed or pre foreclosure properties, both of which offer investors lucrative opportunities. Pro tip: sites like HUD home store will alert you when up and coming properties are listed online.
  • Word Of Mouth. No matter how you look at it, real estate investing is a people business. This means, anyone you encounter — from your friends to your family to your mailman — should know who you are, what you do, and how to contact you. The more you employ word of mouth marketing, the more people will think of you when they see an off market property.
  • Auctions. Auctions are great for investors who specialize in off market deals because they always have a steady stream of foreclosure and REO properties. Periodically browse auction websites to find deals that have potential. Once you find an attractive property, confirm its auction status, location, and bidding procedure (and be prepared to act fast). Before showing up to a real estate auction, be sure you’ve minded your due diligence ahead of time. Thoroughly research the neighborhood and property specs and set a budget that you won’t surpass.

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5 Reasons All Investors Should Buy Off Market Properties

  • Fly Under The Radar. Off market deals aren’t publicized and they typically stay out of the spotlights. This gives investors specializing in this strategy the chance to fly under the radar and score properties at a great price before they’re ever even listed for the public.
  • The Power Of Negotiation. Because these properties go unseen by most, both buyers and sellers are more relaxed when it comes to the negotiations. This can lead to the kind of contracts that would never be possible on the open market. Have your contingencies prepared and get ready to play hardball.
  • Get An Edge. Off market deals give buyers a competitive edge because these properties are not open to hundreds of competitive buyers — investors may compete with two or three other buyers tops. If you’re selling an investment property, consider listing it off the MLS to test the market. This way, you commit to nothing and have nothing to lose. If you get a great offer, you may choose to accept, but if you don’t you haven’t lost anything.

Are you going to add off market real estate deals to your investment portfolio? Let us know in the comments below how you find your first property.

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