Top 5 Ways Real Estate Investors Find Off-Markets Deals
When the seller’s market is so hot that homes are going under contract in under two weeks on average, a real estate investor’s best bet is to find off-market deals. Off-market properties are simply properties that aren’t listed for sale. Once a property hits the market, buyers flood the listing, and the competition is immediately fierce. But if you can find off-market deals, you might be able to snag them without any competition.
Let’s count down the top five ways real estate investors are finding off-market deals.
Wholesalers are investors who get a property under contract, then sell the contract to a new buyer. Wholesalers are essentially middlemen who agree to purchase a property at a price below market value, then sell the right to purchase to the eventual buyer at market value and pocket the difference.
Wholesalers are typically well-connected and often find off-market properties through their networks. And technically, once they get the property under contract, it’s no longer active on the market, so it is an off-market deal at that point.
In many states, off-market properties can be purchased through auctions, the most common of which is a property tax auction. These properties are auctioned off to recover back property taxes owed by the homeowner.
Counties in tax deed states, like California and about 30 others will publish notices of upcoming tax auctions. Anyone is welcome to attend and bid on the property. But be prepared to bid against lots of seasoned real estate investors. And be prepared to invest a fair amount of money in renovating the property before it will be ready to rent or re-sell.
3. Network With Attorneys
Attorneys often learn of potential real estate listings, so networking with attorneys can give you a connection to sellers before they list their homes on the market. Divorce attorneys, for example, might be able to tell you when a couple is planning to sell the home as part of their division of assets. And an estate attorney can tell you if a family will need to sell the home of a deceased relative.
For empathetic investors, this can be an opportunity to help families in need of quick sales. Divorced couples and grieving families might appreciate a no-hassle sale with a short escrow period so they can pay their bills and start the next chapter of their lives.
4. Real Estate Databases
In the age of Big Data, you can subscribe to real estate databases that contain clues to potentially motivated off-market sellers. PropStream, for example, cross-references databases to help you find distressed properties with owners who might be willing to sell quickly. The database includes divorce filings, bankruptcy filings, and pre-foreclosure notices, as well as county property records and MLS data. Databases are great for generating targeted lists of homeowners that might be receptive to a direct mail campaign. Many of the databases even include skip-tracing to help you find the owner’s contact information.
5. Real Estate Agents
No one has their finger on the pulse of the housing market like real estate agents. Real estate agents are typically the first to learn of upcoming listings because potential sellers contact agents to get more information about the selling process weeks, or even months, before listing. So if you have a relationship with a real estate agent, you get on the inside track to be notified of motivated sellers.
Not only that, but agents talk to the other agents in their brokerage. When one agent gets word of a potential listing, that agent will let the others know so they can start lining up potential buyers.
While it’s still a seller’s market with fewer off-market listings our borrowers are still scooping them up. It always comes down to connections and being able to perform. Many of them count on Coastal Capital to provide financing in days to get these deals closed fast.\There’s a reason why long-term California real estate invesotrs consider Coastal Capital their financing partner of choice.