Finding Off-Market Deals
To be a successful investor you need to have a pipeline of potentials deals. It is no secret that the Multiple Listing Service (MLS) is the common source for finding properties to make offers on. However, the investor that can find deals outside of the MLS will find that there is less competition and more possibilities. In order to capitalize on these deals, an investor must utilize some less common tactics. In this article I will outline three techniques for finding off-market deals. Disclaimer: There are many techniques for finding off-market deals but for the purposes of this article I will outline three.
First, is direct mail marketing. A direct mail campaign can be extremely valuable if it is implemented correctly. Begin by identifying your target list in which to mail. One such list is absentee owners. This list contains people that own the property but don’t live at the property. A more common name for these owners are landlords. Some landlords want to be in that position while some landlords want to unload the burden of being a landlord. It is the job of the direct mail piece to find the landlords that are motivated to sell. A key component to implementing a direct mail campaign is to be consistent. This technique rarely works if you only mail a one-time piece. Therefore, you should mail a marketing piece to the same list multiple times in a year.
Another technique for finding deals is “Driving for Dollars.” You can implement this technique in two different ways. One, you can intentionally drive neighborhoods in which you want to invest looking for houses that are vacant, with overgrown yards, or deferred maintenance. On the other hand, most of us travel to the same places every day. We go to the office/work then back home utilizing the same streets, turns and maneuvers so often we could travel the route with our eyes closed. Therefore, the second way to implement this strategy is to take a different route home every time you make the trip. By doing this, you will effectively kill two birds with one stone. This strategy is as old as the hills but still very effective.
The third technique is networking. The saying goes, “Your net worth is directly related to your network!” This is true in many industries but especially real estate. There are many deals that are completed between investors. Co-wholesaling, partnering, and joint venturing are all common tactics in real estate investing. Therefore, if you are looking for off-market deals, networking with other investors and real estate professionals will yield hearty results. One of the best places to find other investors is at a real estate investing club. When attending a meeting, make it a goal to meet 10 new people every time. This tactic will substantially grow your network over time. All of these people can be valuable sources for off-market properties.
In this article I have outlined three common techniques you can use to find off-market properties. If faithfully implemented, these techniques will be valuable resources for finding deals with less competition.