Off-market real estate transactions sound a bit like urban legends, but these very real property deals benefit both the buyer and seller. Savvy real estate investors develop a strategy for pursuing off-market properties, and when successful, secure profitable properties not available to those relying on traditional listings.
Life Bridge Capital is a leading real estate syndication company. We offer our investment partners the opportunity to leverage shares of multifamily rental properties into a passive monthly income. Learn More.
Why Search For Off-Market Properties
An off-market property has not yet officially hit the listing service yet, and may not even be in the process of coming to market. It gives investors the opportunity to purchase a property without competition bidding up prices, and it also provides an element of surprise as a new owner takes over a property. But it’s not just the buyers who benefit.
First, sellers often prefer the privacy that comes along with a pocket listing. Putting a multifamily building on the market can create uncertainty among tenants and create a perception that the building isn’t doing well. If that happens, the owner loses negotiating power with prospective and returning tenants, and the building can even lose some of its appeal and prestige.
Additionally, keeping the property as a pocket listing allows the seller to be selective about who views the property, making the process more streamlined and convenient for the seller.
Investors looking for off-market properties should keep both features in mind, not only as selling points, but also as reminders that they are offering something that truly benefits, and therefore may motivate, a seller.
Unfortunately, finding an off-market multifamily property is not as simple as searching online for properties for sale. Instead, investors trying to find something not yet available to everyone will have to employ more than a bit of creativity.
Use a Connected Agent
If finding a property is a task you would prefer to outsource, it is critical to use the right real estate agent. You will rely on their connections and knowledge to find an unlisted gem.
For better and worse, the multifamily property market is relatively small in most cities, and an agent specializing in multifamily properties should have a book of past clients. Those past clients are the perfect pool in which to begin the search for an off-market property.
Be Consistent But Be Creative
Expect that a successful off-market deal will require many interactions before the seller decides to let go of the property. After all, if they were ready to sell, they likely would have listed the property.
The art of closing an off-market real estate deal centers on striking the right balance between staying at the forefront of the potential seller’s mind without causing them to reject your offer simply because they find you a pesky annoyance.
The best overtures will seem personal and unique, so avoid repeating scripts at all costs. Instead, try to tailor the pitch to the owner and property.
Implement Inbound and Outbound Channels
Thankfully, finding off-market multifamily properties is more than knocking on doors and making unsolicited phone calls. Instead, investors can develop a strategy to streamline their efforts by cultivating inbound and outbound streams of information and referrals.
Investors have the most control over their outbound channels. Outbound channels refer to all the information and material the investors put out to place themselves in front of property owners and get themselves on the shortlist if the owner decides to sell.
Outbound marketing may include direct mail, Facebook and Google ads, and even cold calling.
Alternatively, in-bound channels funnel people to you as they find your information. Investors commonly do this through their social media, blogs, podcasts, and websites.
Work Your Own Network
Your network may be the most abundant resource you have for finding off-market properties. Each person you interact with could be the one who gives you the heads up on your next deal, whether they be your barber, landscaper, or accountant.
Anybody who knows a real estate agent knows they know a real estate agent. Similarly, everyone who knows you should know that you are a multifamily real estate investor looking for your next property.
Try Online Resources
Several niche and other sites exist to connect people in the industry.
One is Roofstock, which is an investment property marketplace. While some properties are available on public listings, others are exclusive to the site and can only be accessed by Roofstock members.
Second, forums like BiggerPockets give investors a chance to create online connections that can lead to the next big deal.
Final Thoughts
Investors pursuing off-market deals should keep in mind that their offers bring sellers the undeniable advantages of discretion and limited showings, meaning these types of transactions are far from a burden to the seller. As your network grows within the multifamily industry in your area, so too will your opportunities to snap up properties before they hit the market.
Life Bridge Capital is a leading real estate syndication company. We offer our investment partners the opportunity to leverage shares of multifamily rental properties into a passive monthly income. Learn More.
