Today I want to talk about finding off market deals.
So, what exactly are off market deals? They are properties that are not YET listed.
I have always believed that working with off market deals is a no-brainer because there is so much less competition. If you think about it for a minute, when you are looking for deals on the MLS, you have thousands of people who have eyes on the same properties. Make no mistake about it, you can still find deals on the MLS but there is definitely a lot more competition.
When it comes to strategies for finding off market deals, there are so many different ways you can find those properties. Today, I want to go over 12 ways you can find these hidden gems. I’m going to break these down for you in a minute.
Finding Off Market Deals
- Direct Mail
- Driving for Dollars
- Your Website & Social Media
- Online Resources
- Public Records
- Builders and Contractors
- Property Managers
- Word of Mouth (Friends, family, etc.)
Breaking it Down: Finding Off Market Deals
Let’s talk a little bit about each one of these off market strategies.
It’s no secret that direct mail is a great way to reach sellers and for finding off market deals. If you have a clearly defined target audience, a clear message for that target audience, and you set up consistent direct mail campaigns you can be very successful with off market deals.
I hear people say this all the time; “But they got 30 letters…”, or “everyone is doing direct mail”. That is most likely true. However, most people will never keep up with their direct mail campaigns. In fact, 90% of the people will quit on or before their 3rd mailing, yet 81% of their deals will come at or beyond their 3rd mailing. You simply need to stay in the game. Another thing I would like to point out is that when you add ringless voicemail and text follow-ups to direct mail campaigns, you may be able to increase your results by up to 400%.
What you need to remember is those thousands of agents and investors looking on the MLS for deals. When you look at it that way, it doesn’t sound like you have nearly so much competition, does it?
A good wholesaler can be worth their weight in gold when it comes to finding off market deals. What is a good wholesaler? It is someone that knows how to put good deals together. This person is almost certainly really good at marketing, and they know their numbers. A good wholesaler will never bring you a marginal deal. They also will never be involved in these “daisy chain” schemes where they try to sell someone else’s contract by marking it up.
Wholesalers often choose this strategy because they don’t like rehabbing or being a landlord. They would rather find deals and pass them on for a quick chunk of cash. Many rehabbers and landlords, on the other hand, have no interest in doing the marketing involved in finding a steady stream of deals. This means they are perfectly happy using wholesalers. These same investors also don’t care that the wholesaler is making money so long as they are getting a good deal for them.
Driving for Dollars
Driving for dollars can be a lucrative source of leads when done properly. I know someone that has built his whole business with this one strategy. In fact, he was able to quit his job a couple of years ago to do real estate full time.
People that are successful with this strategy generally have a plan. They don’t spend their days driving around aimlessly. My friend drove a different route home every night from work for years. That was how he started. He also farmed certain areas and neighborhoods. So, his driving for dollars was a purposeful activity. Follow up is also critical with this strategy. You need a system for following up with these potential leads.
Your Website and Social Media
Your website can be one of your best lead generation tools, so it’s important that you spend some time focusing on this. Let’s face it; people don’t think you are a real business if you don’t have a website. You must have a website. People with a property to sell will often find you through your lead generation website.
Creating your online presence goes much deeper than just having a website. You also need a presence on social media. Start out by focusing on one or two social media platforms. Build a solid presence on those before moving on to other platforms. The platforms you choose will be an individual choice, but I think Facebook and Instagram are two that investors get a lot of mileage out of. At the end of the day, it’s up to you to create your online presence. Bear in mind, that this is the way people will see you. It’s what their perception of you is. It’s what your brand and your reputation will be built on.
What exactly does social media have and your online presence has to do with off market deals? It builds your brand. It’s one of the reasons people will choose you over your competition.
Remember… Marketing is how you get deals, and branding is why they choose YOU.
Other online resources for you to find deals are things like Zillow. Trulia, FISBO, and those types of sites where the owners are trying to sell their properties. These properties are not yet on the MLS so you can sometimes find a motivated seller here.
Real estate agents can be a valuable resource for off market deals or pocket listings. This is especially true for agents that are investors or that work with investors. Agents often know about off market deals. In my area by the time a great deal hits the MLS, it’s probably already sold to an investor that they regularly do business with.
Agents are busy people. If they can make a call to an investor who is a cash buyer and sell a distressed property to them with just a phone call, it’s a “win-win” for everyone. They look good to their sellers, and an investor gets a great deal handed to them. An agent is a valuable part of your team. But you need to understand that this business is very much about relationships, and it takes time to build these relationships. My advice is to get to know them and find out what you can do for them before you ask something of them.
Networking is probably the most valuable yet underrated marketing tool on the planet. In real estate, it’s not so much about who you know as who knows you. You should definitely attend your local REIA’s and meetup groups. This is where your tribe is. However, it’s also important to belong to a group that is not strictly real estate related. This is how you will find out about property that other investors don’t know about. For instance, somebody’s friend or relative might have a property they need to sell quickly.
There are over 3300 counties in the US and each one of those counties has a different process for how you get leads. Some leads can be purchased from a list broker like Listsource.com. In other areas, there are services that can pull many of those leads from public records online. Some off market leads like preforeclosures and absentee owners are readily available through list brokers. Preforeclosures are not yet listed or scheduled to be sold yet so they can often be purchased once the seller understands you can help them save their credit. Last but not least, there are also short sales an REO’s.
Local leads might include probates, code violations, evictions and things like that.
There are both local and national auctions. Local auctions can be found online, in legal publications or in the newspaper. These properties are often a mix of single-family homes and commercial properties. Sometimes the property in an estate will end up at auction.
The foreclosure auction in my area is called the Commissioners sale. These types of auctions are generally held at the courthouse, and they are a great source of leads for the right investor. There are a lot of online resources for auctions, and they can be a big source of leads for the right person. One source you can check out for HUD houses is the HUDhomestore.com
Contractors often come across properties that will be sold instead of repaired. I know of cases where someone bought a property, decided the rehab was just too big and passed it on to another investor after getting a bid from a contractor.
How often do you think these folks run into a tired landlord? They are most likely going to be the first to know when a tired landlord is ready to sell a portfolio of properties. Property managers can be a great source of deals. Once again, network with these folks. If you’re interested in multi-family opportunities, there are specific groups for those particular investors.
Word of Mouth (Friends, family, etc.)
Tell everyone you know what you do. Don’t assume they understand what being a real estate investor means. The same thing is true if you were to tell them you are a cash buyer. They’re not going to understand what “cash buyer” actually means. However, they will understand that you can buy the property and close quickly which solves their problem.
One last piece of advice is to have a business card to hand out. People today think it’s outdated to have an actual business card, but that’s not true. You want people to have a way to contact you down the line.
Well, there you have it. My list of 12 ways to find off market deals. Every investor should have at least 3 to 5 ways to get deals. Be sure you have some off market strategies in your marketing plan.
What is my #1 Source of Off Market Deals?
Hands down its probates. Probates are a niche where you will never run out of leads, and these folks almost always have to sell the house. It just doesn’t get any better than that. My best deals have always come probates. One thing most investors overlook is how much these folks appreciate the fact that you can help them solve this problem when they have an unwanted property.
If you want to learn how to become a probate investing expert, check out my comprehensive course, Probate Investing Simplified. You can do that here by CLICKING THIS LINK.
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