If a property gets listed publicly, it’s highly likely that there are other investors and agents looking into that property as well. The real estate market can be very competitive, so you may be forced to look elsewhere in your search for assets if your target market is being dominated by other players. In this case, off-market multifamily properties can be a game changer for you as it will bring numerous advantages to your portfolio. But how easy are these properties to find? In this blog, we will discuss the methods on how to find multifamily properties off-market and whether that can be a viable strategy.
What Are Off-Market Properties?
An off-market property, as the name suggests, simply means that the property has not been publicly listed for sale. They are instead sold through personal or private channels to keep them away from the public eye. This is why finding these properties as an investor can be so invaluable.
- Reduced Competition – Since there will be very few people who are aware of these properties for sale, you will be able to face reduced competition, potentially giving you the freedom to negotiate better terms.
- Maintain Anonymity – Both the property owners and agents can maintain discretion and avoid public exposure with these transactions. Compared to traditional listings, these assets can be acquired, renovated, and put up for sale or lease without the attention of other agents or investors.
- Unique Investments – There may be unique reasons why the property is being sold off-market. This may include distressed assets, estate sales, or sellers with specific requirements. You never know what you may get with an off-market investment property, but it may pay off better than traditional investments.
- Unique Offerings – As a real estate agent, you can offer your clients exclusive access to off-market deals if you build a portfolio of them. There are some clients to look for this specifically, so you can set yourself apart in this competitive market.
How To Find Off-Market Deals
1. Real Estate Networks
The professional network that you created in your real estate investing journey is one of the best places for information. This includes other real estate agents, property managers, as well as industry contacts. Off-market opportunities may appear somewhere in your local area and it’s the people who have their ear to the ground that hear about it. Real estate agents are always looking for information and will have details about their own clients which may end up with an off-market property opportunity.
2. Direct Mail Campaigns
Direct mail campaigns are a proactive method of finding off-market deals. What you need to do is send direct mail to multifamily property owners in your target area. This mail should introduce yourself and your interest in purchasing off-market properties. Provide your contact information so that if there are any property owners who are interested, they can reach out immediately. If not, you will still have put your feelers out in the market and something will catch eventually.
3. Property Management Companies
Property management companies manage a portfolio of properties within a specific area. As such, they have extensive knowledge of properties and property owners. This will give them some insight into those who are looking to sell quietly. By establishing relationships with local property managers, they will be able to connect you with these opportunities when available.
4. Local Courthouse Records
This is based on the fact that off-market properties are sold for specific reasons. One way to get ahead of this is to research local courthouse records for divorce filings, estate settlements, or tax liens in the local area. These records may potentially lead you to property owners who are open to off-market multifamily properties.
5. Real Estate Wholesalers
Real estate wholesalers are the middlemen between property owners of distressed properties and investors. There are even wholesalers who specialize in off-market properties. By contacting them, you can gain access to a pool of multifamily properties that have not been publicly listed.
6. Online Platforms
While online platforms are not necessarily “off-market”, there are some closed groups and websites that are specifically designed for off-market real estate deals. Private Facebook groups are a good example where a small group of people interact about off-market deals. Then there are websites such as Reonomy and RealNex which can be used as well.
7. Personal Referrals
It wouldn’t hurt to ask around your close family, friends, and acquaintances for help with finding off-market multifamily properties. They may know someone who is interested in selling their multifamily property, which could lead to an off-market deal.. Personal referrals can sometimes surprisingly lead to hidden opportunities.
8. Public Notices
Public records and notices can give you information about probate listings or code violations in your local area. In these cases, the owners will likely want to sell their multifamily properties discreetly, so it gives you an early advantage to reach out to the owners when you see these notices.
9. Cold Calling
Cold calls have long been a sales or information-gathering tactic, and it can work for you as well. Granted it will require time, patience, and effort, but persistence and being positive throughout your calls can lead to positive results. You should consider gathering a list of property owners in your target area and expressing your interest in purchasing any multifamily properties they own off-market.
Finding an off-market property can be a very profitable endeavor but will require more work than traditional real estate investing. Just remember that contacts and networking are crucial for finding off-market deals since you won’t have many other ways to hear about new off-market properties. Good luck hunting!