Property Buyers Group’s “Off Market” Division comes across many properties not listed to the public through direct marketing and their small network of brokers and sellers. These Off Market Deals are designed to provide the seller with complete discretion and the buyer a valuable asset. Property Buyers Group handles many different property types including commercial buildings, apartment buildings, townhouses, mixed use investment buildings, industrial properties and development-conversion sites.
One of the most elusive and desirable real estate opportunities is the “off-market property”. This is a property where there is a motivated seller, but the property has not been broadcast on the MLS (Multiple Listing Service) and does not appear on any of the national or local real estate sites that “re-broadcast” the MLS. Savvy investors and specialty real estate companies covet a property where they are the first to contact the seller. Keep in mind, just because the property is not yet advertised, it does NOT mean it is a great investment. However, in this new market where inventory is low and may continue to be, cutting out the competition can be a fantastic strategy. So, how does one find these “hidden gems”?
This question reminds me of the book Rich Dad, Poor Dad by Robert Kiyosaki. In that book, Robert teaches a simple, but common-sense concept: if you want to know more about a subject, including money, you surround yourself with people who know more about that topic than you do. Regardless of one’s profession, learning a variety of techniques to tackle the problems one faces is always a good idea.
That’s why we look to “team up” with clients to discover exactly what the clients’ needs are and then form a plan to contact property owners that have just begun to think about selling. We believe that you get what you ask for, so defining a specific type of property and asking both yourself and the real estate professionals you choose to team up with how to find this type of property is the first step in finding off-market properties.
There are many reasons people sell real estate. My partners and I often encourage people to hold onto property for as long as they can before they sell, but forces beyond people’s control often make it impossible for folks to hold onto real property. Motivations can include obvious reasons such as death (estate sales), divorce, relocation, short-sale needs, as well as a million other reasons that force people to let go of their properties. Some of these people are motivated, but they do not feel as if they want to go through the formal process of listing the property and negotiating with the general public through the internet.
Perhaps it’s too overwhelming to put the property out there for the whole world to see; maybe there are family issues that have not yet been resolved. Regardless of the reason, they are anxious to get the property sold, and they’re interested in a quick and simple solution. Presenting an attractive solution is the job of the property buyer/investor and is the reason that the property owner decides to sell the property before it is in mass circulation.
Techniques to discover these properties include, but are not limited to:
- Direct mail (targeted mailing lists with very specific language)
- Estate Attorneys
- Divorce Attorneys
- Relocation companies
- Local Builders (These folks tend to “land-bank” properties)
- Real Estate Agents (they call them “Pocket listings”)
- Public Records (for bankruptcies and short-sale opportunities)
- People you know!
People you know are perhaps the best place to start. I remember listing several properties for a client who happened to be a friend. I suggested he sell me one, admitting at the same time that he would probably receive more if he posted the listing on the open market. He sold the property to me at a price that has allowed me to profit at a more rapid pace and make it a really solid and much less risky investment. This is a property that I still own and will most likely never have to sell. This is the fundamental difference in real estate investing as compared to the stock market or mutual funds – the relationship with the principal can matter. When you buy stock in Coca-Cola, the CEO does not write you a personal thank-you note. This type of thing can happen in an off-market real estate transaction. Real estate is a cooperative business; both the buyer and the seller must agree to mutual terms before a deal is struck. Emotional needs, personal reasons or simply just people wanting to get the property sold as quickly as possible, for whatever reason, are factors for getting a deal before it hits the market.