In a competitive market, it can take the right strategy to find the best opportunities. In addition to public listings, you might look for properties that are off market. While these deals may require having the right connections or carrying out additional research, they could also come with less competition, better pricing, and more flexible terms. You could find an opportunity to add value to a property, improve its operating efficiencies, or reposition it in the market.
Consider these guidelines as you look for off-market real estate opportunities in your local area.
1. Build Relationships with Brokers
The right investment sales broker will be aware of properties that aren’t listed publicly but have been passed on to them as off-market. If you have a solid relationship with a broker, you can share what you’re looking for. A good broker will be in constant contact with others in the industry and will be aware of what’s moving fast and what’s not, along with where the good deals can be found.
In order to be an investor that a broker calls when an off-market opportunity arises, you’ll want to demonstrate that you are well-informed and serious about buying. While you can call the broker, you’ll also want to keep in mind that their time is limited. You might ask what’s in their pipeline, and if they are aware of any off-market opportunities.
If you’re looking to raise capital from other investors, the story of having an off-market deal could have an appeal, as investors often look for ways to buy in at a below market price. If you’re looking at an off-market place without a lot of competition, you might hope for a good buy. For properties on market, there could be more bids which raise the price. Sometimes, however, it takes a broker to really educate a seller on the market. In these cases, it could be better to not be the first buyer in but rather come in as the last buyer.
2. Be Aware of For Sale by Owner Risks
Some owners look to sell their property on their own. They might not offer a fee to brokers because they want to save on paying a commission. While you may face less competition when buying from a seller, you could also miss out on some of the benefits that come from working with a broker. For instance, the seller might list certain terms or conditions for the sale and not be open to negotiating. If you work with a broker, you may be better positioned to find a middle ground.
3. Know the Seller’s Motivation
For both on-market and off-market deals, if you’re aware of the reasons the owner is selling, you can use this to lay out a strategy. In some cases you might find a deal that was on the market and failed. If you stick with it and try to buy it, you might be able to get it at a later date when the seller is more motivated.
4. Create Opportunities Through Direct Outreach
If you see a vacant building, you might be able to contact the owner of the property directly. Most cities make ownership publicly available, or you could use a private service like Reonomy. When you talk to the owner, you can ask about their interest in selling the property.
You might be able to find opportunities in abandoned projects too. You could research the lenders and call them. Ask about the project and what steps need to be taken for you to secure the deal. You can also track listings that are on market, as over time they might go off market. You can contact the seller and find out if they are still willing to move forward with a transaction.
5. Evaluate Distressed Situations
When a loan is maturing or a property is underperforming, sellers may prefer to move quickly and quietly. You can start by researching public records to find information on foreclosures, tax liens, or building violations. You may also check CMBS (commercial mortgage-backed securities) databases and auction platforms like Ten-X for note sales. Reach out directly to lenders to ask if they’d consider selling the loan or introducing you to the borrower.
Distressed assets often come with challenges, so you’ll want to be knowledgeable about the risks involved before moving forward on a deal.
Finding off-market real estate deals takes initiative, persistence, and a willingness to look where others aren’t. Whether you’re building strong relationships with brokers, reaching out directly to owners, or identifying distressed assets, the key is to be proactive and strategic in your approach. While these opportunities may not always be obvious or easy to secure, they could lead to outsized returns over the long-term.
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