What are some good ways to find off market deals

Question

Need some tips and advance on finding off market deals and motivated sellers

Jim K. · Answer

I keep on mentioning this and no one pays attention. But hey, let's take another shot at it...

Our last four deals have been off-market deals that we bought as pocket listings. A pocket listing is a deal that is given to an agent who is told explicitly NOT to list the deal but to talk to his investor clients about it. This pocket listing is usually a property that is not move-in ready. It needs to be sold quickly, and that the seller is looking for a sure cash deal for the property quickly for one reason or another.

Pocket listings are a major source of off-market deals. Do how do you find the agents who deal in pocket listings, estate sales, this kind of real estate? These agents are typically long-service players in a specific area, with a connection to a no-name small agency whose advertising is usually just word of mouth. They have longstanding links to the local fire department, police, and municipal government. They are usually in their sixties.

There's a secret trick that, as far as I can tell, I'm the first person to think up. What I did was call the local plumbers of my target area.

As part of the closing process, my target area requires a DYE TEST. A dye test is carried out by a plumber to make sure that the gutters of the house are not tied into the sanitary sewers. Now, in a pocket listing, who arranges the dye test? Not the owner, that's for sure. The pocket listing agent usually handles it.

My county maintains an online list of licensed master plumbers that you can break down by municipality. So what an investor in my target area can do is get his hands on that list, call them, and ask if they know an agent they've done dye tests for with no owner present. IF TWO PLUMBERS COME BACK TO YOU WITH THE SAME AGENT, CALL THAT AGENT AND GET ON HIS CASH BUYER LIST. There's a high likelihood that agent handles a lot of absentee sales, and therefore secures a number of pocket listings.

Ryan Ingram · Answer

Here are the things that I do to help find off market deals:

Network: I like to attend as many events as I can that are largely attended by other real estate investors. No investor can possibly take on all the good deals that come their way. I have purchased several off market deals from having great relations with other real estate investors.

Word of Mouth: I do my best to talk about real estate investing all the time. It may be annoying, but anyone that knows me knows that I am actively acquiring real estate. I have had several people reach out to me that have nothing to do with investments. They usually have a friend, neighbor, cousin, that wants to sell their home pretty quickly...and they reach out to me.

Direct Mail: I use the auditors website to pull the names and mailing addresses of the types of properties that I am interested in. This can be pretty effective...but just remember that direct mail is to generate leads, not close deals. The only way you can close deals from direct mail is by building the rapport and trust.

Driving Around: I drive around a good bit and look for properties that seem to be vacant, run down, or otherwise neglected by the owner. I'll then use the internet to try and track down the owner and see if they want to sell.

I'm not nearly as aggressive at pursuing off-market deals as others...but I generally have a slow trickle of properties into the pipeline. I think it is all about fully immersing yourself into the industry and spending as much time with other like minding people as possible.

Ashley Kehr · Answer

My best advice would be to tell everyone you come in contact what you are looking to buy so you are the first person they think of when they know of someone selling.  You could also send out letters to owners of properties that fit your criteria.

May Emery · Answer

@Anthony S. I agree with several of the comments here -  After networking & word of mouth, mail is the best way to contact the off-market sellers  - because these are people who haven't done the work to list their homes and are unlikely to be searching online to find an investor in the area.

The list is important. You have a lot of competition in PA, so you don't want to mail to the same people that most every other investor is mailing to.

Absentee Owners have been popular for a long time, and are apparently still somewhat effective (people are still mailing to them) but they are getting multiple offers to buy their home. It's hard to stand out.

There are some owner-occupied segments with people who share motivating factors for selling their home.

Seniors with Long-time Ownership: often ready to downsize or transition to assistance.

Homeowners with Low Financial Stability Scores (FSS): Struggling financially and likely ready to cash in on their asset.

Both these categories have additional advantages in that they probably don’t haven’t been updated and may have deferred maintenance. They won’t be expecting the same money as their neighbors with the shiny new kitchen and fresh paint.

What are some good ways to find off market deals

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