7 Ways for Real Estate Investors to Find Off-Market Deals

By Michelle Clardie on 04/14/2024.
Reviewed by Josefin Gatsby
Finding “off-market” real estate deals could be your ticket to lower buyer competition, simpler negotiations, and lower prices on your investment properties. But many real estate investors don’t know where to look for off-market properties. 

In this article, we’ll show you some of the best ways for real estate investors to find off-market deals. But first, let’s explain what off-market deals are and why they are such a hot commodity among real estate investors. 

What are Off-Market Real Estate Deals?

Off-market real estate deals are property acquisitions that are found outside of the MLS (multiple listing service). The MLS is the semi-official database of available properties for sale in a specific area. When a property is listed on the MLS, it is considered to be “listed on the market.”

When the average owner wants to sell their property, they hire a real estate agent to list the property on the MLS, which automatically alerts other agents in the market to the new listing. This information is also distributed to online home search sites like Zillow, Trulia, and REALTOR.com. All buyer’s agents can then notify their buyers about the property, and all buyers who are searching independently online can find the property. 

Off-market properties, on the other hand, are not listed for sale on the market. So they don’t have a wide range of interested buyers. In fact, they likely have zero buyers because, after all, the property is not listed for sale. If you can find an owner willing to sell without listing the property on the market, you minimize buyer competition. Not only does this make for smoother negotiations, but it can also lead to a discounted purchase price.  

7 Ways for Real Estate Investors to Find Off-Market Deals

There are several ways to find off-market real estate deals; you just need to know where to look. Here are seven strong resources for real estate investors looking for off-market deals.  

1. Network with Industry Insiders, Notably Real Estate Agents

A well-connected real estate agent learns about potential deals long before they hit the market. 

In many cases, agents know about upcoming listings where the owner is actively preparing to list the property for sale. An agent who can give you a heads-up about an upcoming list can help you get in before other buyers. In other cases, agents hear from homeowners who simply want to get information about the market and find out how much they could potentially make from a hypothetical sale. If your agent knows you’re looking for an off-market deal, they can pass your information along to the would-be sellers to see if you can put a deal together before the property goes to market.

Additionally, agents have networks of investors, builders, and developers. These industry insiders often share information about property owners they know who might consider selling if an offer fell into their laps. 

You can (and should) network with these industry insiders yourself. But you can also leverage the connections of an experienced real estate agent while you work to build your own relationships in the industry.

2. Seek Out FSBOs

Sellers who attempt to sell their homes without a real estate agent are known as FSBOs (For Sale By Owners). FSBOs are considered off-market deals, even if the owner is actively marketing the property for sale, because the property cannot be listed on the MLS without agent representation (in most markets). 

In most cases, homeowners go FSBO in an effort to save on the real estate agent commission. This gives investors a bit of leverage. After all, if they aren’t paying agent commissions from the profits, they may be able to come down on the price. Additionally, you may have the upper hand if you have strong negotiation skills. This type of advantage is often not available with agent-represented deals as agents are trained negotiators.    

3. Track Expired Listings

When a seller lists their home for sale with a real estate agent, it is for a pre-determined time frame (often three to six months). If the property does not sell during that time, the listing expires and goes off-market. At that point, the seller can choose to renew the listing with the current agent, list with a new agent, or keep the property off the market. 

If you pay close attention to the market, you can swoop in when a listing expires. Some sellers may be so relieved to finally have an offer that they sell for well below the original asking price. Since the seller is not under contract with a real estate agent while the property is off-market, you might also be able to negotiate an additional discount since the seller won’t have to pay agent fees if they don’t re-hire an agent. 

4. Search Public Records for Pre-Foreclosures

When a property owner misses multiple consecutive mortgage payments, the mortgage lender issues a legal notice of intent to foreclose on the property. At this stage, the property is in pre-foreclosure, and this information is public record.

Most pre-foreclosure sellers are unsure of what to do. We never want to see owners in a difficult spot taken advantage of. But their options are limited, and a quick sale could be in their best interest. 

The ideal solution would be for the owners to make arrangements with the lender so they can comfortably remain in their home. But if this is not possible, selling before the foreclosure could help them walk away with a bit of cash in their pocket for a fresh start. A foreclosure, on the other hand, would leave them without any proceeds from the home, and a damaging foreclosure history on their credit report.   

You can often search for pre-foreclosures for free with your local county public records department. But serious investors often pay for a subscription to sites like foreclosure.com, which makes it easier to shift through the data.

It’s worth noting that you can also buy foreclosed properties once the foreclosure process is complete. There are multiple methods for buying foreclosure properties, including property auctions, which is next on our list of ways to find off-market deals.     

5. Attend Real Estate Auctions

Depending on your state laws, there are a few possible causes for real estate auctions, including:

  • Tax auctions, which result from unpaid property taxes.
  • Foreclosure/REO auctions, which is how many lenders dispose of the properties they foreclose on.
  • Probate auctions, which is how the state disposed of property owned by a recently deceased person with no will and no family (however extended) to inherit the property. 

These distressed properties are nearly always sold as-is, meaning that the seller will not make any repairs or offer any warranties. These properties are often sold at a deep discount because they typically come in poor condition from deferred maintenance.

Auctions are advertised on local government websites. You won’t have much competition from the general public, but you may have stiff competition from other real estate investors.  

6. Contact Homeowners Directly

One of the most effective ways to find off-market deals is to simply contact homeowners to see if they’re willing to sell. 

If you have a target neighborhood in mind, you can send letters to each home and/or post flyers around the area. Or, if you’re looking on a case-by-case basis, you can simply record addresses of desirable properties you drive by so you can reach out to the owners directly. This is known as “driving for dollars.”

In many states, ownership records are open to the public, so you can look up the owner’s names for any given address. There are also real estate data services that sell this data. Of course, you could always address your letters to “occupant,” but personalized communication is more well-received.  

7. Take Advantage of Real Estate Syndication

You could skip the hassle of searching for off-market properties entirely by investing with a real estate syndication company

Real estate syndication is similar to real estate crowdfunding. A real estate company finds the deal, acquires the property, and allows investors to buy a stake in the property and share in the returns. Syndication deals are:

  • Professionally managed. You don’t have to do any of the legwork or grunt work. The deals are found and vetted for you, and you don’t have to invest your time or energy in acquiring, developing, managing, or selling the properties.   

  • Affordable. While buying and renovating a property on your own can easily exceed $100,000 out-of-pocket, syndication shares may be available for just $10,000 to $25,000. These low investment minimums give you the option to spread your funds across multiple projects for instant diversification.  

  • Full of high-yield potential. A good real estate syndication company has the resources and connections to access deals and terms that the average investor cannot get on their own. This means higher profitability potential for investors who choose a good crowdfunding/syndication service.

You can sign up with a syndication company to be alerted by email when new deals are open for investments. 

Key Takeaways

  • “Off-market deals” are property acquisitions that are found outside of the MLS (multiple listing service).

  • Off-market deals can be advantageous to real estate investors because there is less buyer competition. This can mean more negotiating power and lower acquisition prices. 

  • There are several ways for real estate investors to find off-market deals, including networking, FSBOs, pre-foreclosures, auctions, and real estate syndication.

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