How to Find Off-Market Properties

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It’s an assumptive approach to think real estate investors call realtors for listed properties. While this is an option, this is quite costly for an investor looking to maximize their profit margin.

What is the niche of a skilled real estate investor?

Successful real estate investors work hard to find their deals, the majority of which never appear as listed for public consideration. Finding off-market deals is the optimal skill for any real estate investor.  

Real estate investors avoid properties listed on the Multiple Listing Service (MLS) due to the cost. Once realtors list a property, they anticipate a payment. 

Commissions can range from 1 – 3% in most instances but can be slightly higher. 

Factoring in this commission reduces the property’s profit margin, which will doubtless have problems that require resolving before resale. 

Therefore, an investor utilizes the MLS as an absolute last resort.

Problem properties seem to leap at skilled investors. A keen investor’s eyes can identify a problem from the curb, even the entry of a neighborhood.  

FOCUS ON MAXIMIZING YOUR PROFITS

All communities have a personality, and when a property diverges from a personality-driven community, there is often a problem.  

The key to maximizing profit in real estate investment is contingent upon the purchase.

Most people think it all comes down to the sale, but this is novice thinking. Skilled investors make money when they buy the house. What does this mean?

  • The property is purchased below market value.
  • Instant equity is obtained this way.
  • The cost of repairs is absorbed due to the purchase price of the home.
  • Keeping repair costs within an optimal range is imperative.

    • Equity increases in “hot” markets since market values increase, even while the renovation is underway.

    Equity is how you make money on the purchase. As many investors say, you must purchase the house “the right way” to reap the benefits.

    FOUR STRATEGIES OF A SKILLED INVESTOR

    A skilled real estate investor is always on the hunt. They can’t help it. Once your senses have been attuned to real estate investing, you see problems and think of solutions constantly. 

    It’s not a burden but a mission. It’s a way to help people in need, either from the homeowner’s standpoint or those seeking viable housing.

    1. Driving for Dollars: Perhaps one of the most ancient methods but remains quite effective. It's regarded as a push strategy because you engage in finding a property. What does this look like for investors? You get in your car and drive around your city or town just as it says. Since gas prices are high, it behooves you to know what to look for and where to find it. Here are a few tips: Vacant houses are the bane of someone's existence. If a house is vacant, there is a reason. Try getting as much information about the home as possible.
  • Ask the irritated neighbor.
  • Check the mailbox. Is there any mail with a name on it?
  • Someone in the community knows the owner or the owner's descendants.
  • Partner with a real-estate-focused title company and let them do their magic with the address you provide.
    • 2. Bandit Signs: Have you ever seen a sign that says, "We Buy Houses?" These signs are a classic strategy that drives business to you. They cost very little to secure and work wonders when placed in the right location. People with problems will call, and when they call, you need to be prepared to behave like an investigator and get as much information as possible.
  • Property address
  • Who is the owner(s)?
  • Current status of mortgage
  • Tax status
  • What are the perceived problems of the homeowner?
  • Schedule an appointment to meet at the property within 24-36 hours. Do it that day if you can.
    • 3. Direct Mail: It may be called "snail mail," but homeowners still receive bills, circulars, and personal notifications in writing. As a result, this, too, is a pull strategy. It differs from using Bandit Signs because it powerfully targets a specific audience. When strategically employed, direct mailing can reap massive benefits. Many investors have stated that direct mailing campaigns can result in multiple deals. Direct mailing allows the investor with multiple contracts to wholesale some of them. It's another means of income and does a tremendous amount of good. Other investors get to flip houses and provide quality housing to many families. Direct mailing should be:
  • Driven by a strict set of criteria.
  • Utilize software that helps focus your efforts in a particular geographical area.
  • Written in a professional yet compassionate tone to avoid offended potential homeowners. Remember, people with problems are not happy. They are having severe issues with their property and are looking for solutions that won't leave them homeless.
    • 4. Lead Generators: These are those entities or persons who can give you a "heads up" about a property before the general public is made aware. It would help if you had a network of businesses or people who can alert you when a problem property comes across their purview. Here are just a few examples.
  • Probate attorney
  • Foreclosure List at City Hall
  • Real Estate Title Company
  • Tax Lien List at City Hall
  • Private Lender Leads
  • Estate Attorney

    • GET CONNECTED WITH EXPERTS TIPS TO FINDING THE BEST DEALS

    While other lead generators are available, these are perhaps the most common and certainly most lucrative. 

    Troubled homeowners are typically the most motivated.

    Success as a real estate investor comes to those who do the work of finding these types of deals themselves. 

    Indeed, you can find a good deal from a wholesaler, and Glenn and Amber Schworm will show you how to do it with ease at www.HomeFlippingWorkshop.com. 

    When the numbers work, they work; however, the most significant profit margin comes to those who contract their deals.  

    To learn more about finding suitable properties, watch Glenn Schworm’s video, How to Find Off Market Properties.

    Training and development will be essential if you are truly serious about becoming a savvy real estate investor that knows how to find deals that benefit your bottom line.