Real estate rental property, commercial real estate, and real estate syndications can provide a great way to make some cash and also maintain financial stability. But if you don't live in an area where the real estate market is on the upswing or don't want to buy rental property nearby, you might feel a little stuck.
Savvy investors find hot commercial real estate investments outside their local market by exploring out of area markets. If you take the initiative to look for commercial real estate outside of your local area, you are more likely to see decreased competition, easier deal negotiation, and you will probably be able to snag the property you had in mind with better terms than if you'd pursued a typical listing.
For these reasons, it seems like a no-brainer - You need to find off-market commercial real estate! But how?
You are coming to the realization that finding off-market homes could increase your competitive edge, and that with this advantage, you could easily use real estate outside your local market to retool and refine your investment strategy.
Before you start playing the real estate market or setting aside capital for real estate investing, it's essential to understand how investment properties work and find deals on the correct property type.
Whether you're searching for a rental home, commercial real estate like an office building, or anything else, here's how to discover the best off-market deals.
Get to know your fellow investors
While most folks will immediately turn to online websites for real estate properties that are listed for sale, you want to buy off-market properties. So, it's important to approach things differently.
First, you want to get to know and make friends with other real estate investors. While at first, this might seem counterintuitive because you might think they are your competition, there's actually a TON of value in having relationships with people who share your interests.
Commercial real estate investors, especially those who are more experienced than you, often already have contacts and connections to investment opportunities that aren't listed elsewhere. Many investors already know and work with real estate brokers, have already dabbled in direct mail marketing, and can already guide you toward or warn you against certain locations or strategies.
Whether you are looking for a great deal, or you want to discuss market analysis, or exit strategies, rubbing elbows with fellow real estate investors and real estate professionals will help you gain the connections and knowledge you need.
By forming a relationship, you can gain insight into their strategy, willingness to sell, and real estate approach. When you are selling and buying within a respected investor network, you are working within a form of “house hacking”. This often can pay high dividends in your favor.
If you want the most out of your existing or future real estate investments, surrounding yourself with fellow flippers and investors helps you realize the highest value from your investment property or a renovation. This niche group of people knows what it takes to profitably flip or BRRRR distressed properties. With this supportive community of potential buyers and sellers surrounding you, it will be much easier to, generate passive income, find off-market commercial property, and achieve your financial goals.
If you've already built a network of real estate professionals, lean into it!
And, if not, it's time to start. This is the #1 way you can expand your reach and find your groove in off-market property.
Use a Real Estate Agent For Off Market Property Leads
We often think of real estate agents focusing mainly on their buyers. But experienced realtors maintain seller lists as well. If a market is favorable, a real estate agent may reach out to contacts who've previously expressed interest in or asked questions about selling. Sometimes, if the market value has risen significantly, homeowners become potential sellers easily.
Real estate agents will often make phone calls, send postcards, and use other means of communication to property managers, landlords, tenants to share the purchase price on properties sold in the local area. This alone could be a big persuasion to a property owner, especially if they've thought about selling before.
If you’re new to the investing game and want to purchase your first property, a real estate agent could help you establish a long-term real estate investment strategy.
Connect With Area Contractors
A good idea for individual investors is to connect with contractors in your desired market. Contractors often can help you find unlisted real estate because they know what renovations they've quoted and which owners have been considering a change. You might even consider partnering with a contractor to help you buy a distressed property and hit your investment goals.
Contractors can help in different capacities and with many types of real estate investing. Working with a “pro” contractor can really help you develop your real estate investment strategy because as they are renovating properties and working with real estate developers, they might share property details with you. You never know when the relationship might be mutually beneficial.
Use Direct Mail For Investing In Off-Market Properties
A lot of real estate investors use direct mail to find off-market real estate. Direct mail marketing does not require a lot of money and you can help generate off-market leads for years to come.
Whether you are a new real estate investor or you've got some experience under your belt, you should consider direct mail marketing because it's a quick way to get your name out there.
Your first step in starting a direct mail campaign is to figure out your audience. This way you can craft a very well thought out targeted campaign. After you have created your mailing list, send out the mail to residential real estate, apartment building owners, and other types of properties that you’d like to have in your portfolio.
Try Your Hand At An Auction
You can find great deals at an auction as the properties up for auction may be distressed properties at a low price point. Likely, there are regularly occurring real estate auctions in or near any zip code, and this makes it really easy to connect to excellent off-market commercial real estate deals in any area!
Browse auction websites to find off-market deals from all over the country, in every market, of every real estate type, residential and commercial. These properties often wind up at auction because property owners are unable to pay taxes, the mortgage, or both, and have fallen delinquent.
Auction properties generally need some type of rehab, so be ready for that. Always perform proper due diligence on the properties, investigate the parties involved and pull public records so that you can know as much as possible about the off-market listings presented at auction.
Depending on the auction’s location, you can buy an off-market property just by paying the back taxes or any past-due utility taxes the property has.
Find Off-Market Properties Through Wholesalers
Wholesalers can help you grow your taxable income, add to your net worth, or develop rental income because they often have a lot of information on, strategy around, and insider knowledge about off-market opportunities.
Wholesalers can find the deals, flip the right to purchase, and then turn it over to the buyer for a commission fee. If you are looking at rental income or commercial property, there are a couple of cons. These can range from bottom-line effects to property depreciation.
Wholesalers normally work with properties that need some work. You want to make sure you check how much work the property needs by surveying public records, looking at on-market properties nearby (for contrast), and talk to fellow investors. You do not want to have to invest more cash into a property than you have or than what it's worth.
When you know how much work a property needs, and you still think it's a great deal and that you can profit, you can find the correct lender and interest rate to cover those costs.
How To Find Off-Market Commercial Properties For A Great Deal
Off-market deals are so often talked about in the real estate investment arena, and if you weren't sure how to find off-market properties, now you know!
When you know where to look for the best off-market deals, it's a lot simpler to diversify your real estate portfolio, invest in properties that pay regular dividends, and collect rental income from your commercial holdings.
As you explore off-market real estate, you're sure to see decreased competition, meet new fellow investors, gain insight and experience that leads to personal growth, and quickly brush up your negotiating skills.
All of these will positively impact your cash flow, diversification strategy, and investment portfolio!
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This work by Annie Dickerson is licensed under CC BY-NC-SA 4.0