The best deals on investment properties aren’t found on the MLS. Quite the opposite, in fact.
In an overheated real estate market, you need to find deals where you aren’t bidding against a slew of other buyers. This means finding properties not listed for sale, also known as off-market deals.
But if they aren’t listed anywhere publicly, how do you find off-market real estate deals?
6 Ways to Find Off-Market Properties
There are many ways to find off-market real estate deals. Most of them involve finding distressed property owners and contacting them to offer a quick, sure sale.
Try these tactics to find off-market property deals, and try mailing, emailing, calling, or texting the owners.
Few sellers are as motivated as those facing foreclosure.
The trick is to reach them as early as possible while you still have time to buy the property before the foreclosure auction. At auction, the lender typically takes the property back and lists it on the MLS as an REO property.
You could go visit the courthouse to find foreclosure filings (I used to do this, in my early 20s). But in today’s world, you can save yourself the trouble by using online platforms like Foreclosure.com or Propstream.
When I used to buy pre-foreclosures, I found that owners responded best when you offered to let them stay in the property as renters, with the opportunity to buy it back as a lease-option.
2. Tax Liens and Tax Sales
The same concept applies when owners fail to pay their property taxes.
And you can buy the tax lien or property at tax sale—but you’d be competing with other investors.
Instead, try contacting the owner before the sale to work out an agreement. That could mean a quick sale, or lease buyback arrangement, or something else entirely. As with foreclosures, try to reach these owners before they get flooded with direct mail, calls, and text messages from other investors.
Platforms like Foreclosure.com and Propstream also provide data on tax liens, not just foreclosures.
A judgment is a legal debt, attached to a person rather than a piece of property (like a lien).
However, property owners can’t sell real estate without paying off judgments against them. Judgment holders can also garnish the wages of the debtor, to satisfy their judgment.
Judgments offer one more way to find motivated sellers. Again, platforms like Foreclosure.com and Propstream can help you find property owners with judgments against them.
Divorcing couples are also highly motivated sellers. Often they’ll list the property for sale, but if you can reach them before they decide to do so, they may sell to you as well.
As a matter of public record, you can, of course, pull divorce filings from the courthouse. Or you can just use platforms like Propstream to find them in your target market.
As with other distressed sellers, make sure you put on your sensitive cap when you approach them. The transaction may be a pragmatic order of business for you, but it’s emotional for the owner.
5. Tired Landlords
Being a landlord isn’t for everyone. Many novice investors find that they simply don’t have the stomach for enforcing leases, rent defaults, eviction filings, constant repairs, and the other headaches of owning rental properties.
Often these “tired landlords” just want out. They’re willing to take a low offer, in exchange for just getting rid of the property (and often its deadbeat tenants) quickly.
Unlike foreclosures, there’s no singular way of finding these frustrated owners. Instead, you have to get creative in how you identify them. One way is through local eviction filings: landlords are at their most frustrated when they have to file to evict a defiant tenant. Reach them during the eviction process, and they’re often more than willing to hand over the deed in exchange for a cash buyout.
You can also find tired landlords by searching for vacant rental listings that have remained posted for a long time. Vacant rental properties are expensive for landlords, and after a few months of carrying the mortgage and other costs, often landlords have had enough.
Just be prepared that often you’re agreeing to take on the ex-landlord’s headaches, including their deadbeat tenants whom you’ll have to evict.
6. Driving for Dollars
An oldie but goodie, you can always find off-market property deals by driving for dollars.
Not familiar with the term? It simply means driving around your target neighborhoods and looking for dilapidated or neglected properties—a sign that the owner doesn’t have much interest in them. These owners may not have the money to repair the property. In some cases, they just don’t know what to do with the property.
Which sets the stage perfectly for you to make them a low buyout offer.
As a modern twist on driving for dollars, try tools like Deal Machine. You snap a photo of the property, and the Deal Machine mobile app pulls up the property details such as transaction history, liens, assessed value, property taxes, and more. It also pulls up the owner’s name and contact information, and for an extra fee, you can click a button to have Deal Machine mail the owner your template offer letter or postcard.
Contacting Property Owners
Identifying motivated sellers is only half of the equation as you learn how to find off-market real estate deals. The other half is contacting them, and then closing the deal.
The classic strategy for contacting owners is a direct mail campaigns. Property owners’ names and mailing addresses are a matter of public record, after all. You can try postcards or letters and experiment with different tactics and wording.
But it’s easier than ever in the twenty-first century to find people’s other contact information. That includes phone numbers, email addresses, and social media profiles. You can try online platforms like AnyWho to find phone numbers, and then call or text them. Just beware not to violate the Do Not Call registry.
Email and social media profiles are also valid ways to reach sellers if you can find them.
Just remember to be respectful, discreet, and transparent. Get to the point quickly and honor their request for no further contact if expressed.
There’s no mystery or secret sauce in how to find off-market real estate deals. It’s a business model like any other, requiring systems in place for both identifying motivated sellers and then contacting them at scale.
For the former, try platforms like Propstream or Foreclosure.com to quickly and routinely pull up local distressed owners. You can also try driving for dollars, with some automation help from tools like Deal Machine.
To contact these sellers, you can set up direct mail campaigns. Many online services let you simply upload a spreadsheet with your list of owners to contact, and they send out the mailings at scale for you.
Alternatively, you can hire a virtual assistant to help with looking up phone numbers, email addresses, and social media profiles. And, of course, reaching out to them with your template messages.
Just don’t expect to find great deals posted publicly on the MLS. If you want to score a good deal, you need to find off-market properties.
What strategies have you used to find off-market property deals?