Whether you’re looking to buy a house as your primary residence or you want to add an investment property to your portfolio, sometimes the best deals are the ones that aren’t even on the market. The question is, how do you find them?
4 Off-Market Deal Sources
The process of selling a home can be complicated, but the initial step is fairly straightforward. The majority of homeowners are going to hire an agent, list their property on the MLS, and stick a nice for-sale sign in the front yard. And if you’re fine paying the market rate for a property, there’s nothing wrong with buying one of these listings. However, you should know that not every property a buyer purchases comes from this traditional pathway.
There’s an entire marketplace of real estate transactions that stem from “off-market” activities. And if you want to get a “steal of a deal,” you need to understand and tap these different channels. They include:
There are real estate auctions in every market. Some are small and private, whereas others actually occur at the courthouse (physically or online). In most cases (such as courthouse auctions), the properties being offered have been foreclosed.
If you’re going to buy a house at an auction, do your research in advance. This includes thoroughly researching the property and surrounding area, registering for the auction, coming up with the necessary cash/financing, and reviewing all paperwork in advance.
Most off-market transactions can be directly tied to networking. To find a deal in this manner, you need connections – either personally or through an agent.
If you’re a real estate investor, it’s especially important that you surround yourself with other investors in your market. (It sounds counter intuitive, but they can be some of your best resources.)
You never know when another investor will send you a deal that they’ve passed on. You’ll also run into situations where other investors want to partner together for a joint venture deal. Either way, the proper network can feed deals directly to your doorstep.
3. Approaching Homeowners
“Driving for dollars is a term that real estate investors use to describe a technique for finding great deals on houses,” investor Mark Freguson writes. “You drive around until you find a house that looks vacant or distressed and then attempt to buy that home from the owners.”
More specifically, the five-step process looks like this:
- Drive around and look for properties that are vacant, distressed, or otherwise in need of some serious TLC.
- Record the address and take pictures.
- Knock on the door, send a mailer, and/or contact the homeowner via phone.
- Build some sort of rapport and trust with the individual.
- Make an offer
Driving for dollars requires a strong stomach and a willingness to be turned down. You’ll get denied 99 times out of 100. But all it takes is one deal to come out ahead.
If you’re a full-time investor who is constantly looking to buy new properties, you can actually streamline this process by training and hiring your own team to go out and find you deals. This cuts down on the amount of time you have to spend driving around and making the initial contact with sellers. From there, you can handle steps four and five.
4. Searching Recent Eviction Notices
This is a pretty creative strategy. With this approach, you pull public eviction records through the local courthouse and look for properties where the owner has recently issued an action.
What does this tell you? Well, it indicates a situation where the owner is likely frustrated – and possibly even stretched thin (financially or otherwise). And if that’s the case, they might be interested in unloading the property and moving on. This gives you an opportunity to come in and make an offer.
Begin Searching for Your Next Deal
There’s ample room for creativity in the world of real estate. As you search for your next home or investment property, consider leveraging one of these off-market strategies. There’s no guarantee that you’ll find a deal, but you’ll increase your odds. And at the end of the day, that’s all you can ask for in a white-hot real estate market.
Article Submitted By Community Writer