What Is Off Market Real Estate?
When people talk about “off-market” real estate deals, what they are referring to is any property that isn’t currently listed on the multiple listing service (MLS)—which is where real estate agents list properties for sale.
Why Is Off Market Real Estate Better For Investors?
There are a few reasons that investors prefer to find off-market deals, but they all boil down to the fact that you can often get a lower purchase price (better deal) on properties you find off-market.
There are two main reasons you can generally score a better deal with off-market real estate; There is little (or no) competition, and the seller won’t have to pay commission to a real estate agent.
Lack of Competition
When a property gets listed on the MLS—especially in a sellers’ market—there is a whole lot more competition. In 2021, for example, properties are selling on the MLS for over the asking price quite frequently.
Not only are there fewer eyes on the property, but there aren’t real estate agents on both ends of the transaction to mess with negotiations.
Don’t get me wrong, real estate agents are great, and you absolutely shouldn’t think I’m saying anything differently. I recommend using them on most of your transactions. That being said, it is much easier to negotiate face-to-face with the person who owns the home, than it is to play “telephone” through two real estate agents.
Also, the seller may care about different aspects of the deal than what the agent thinks are important, and things can get unnecessarily muddied throughout the negotiations.
Real estate commissions are generally about 3% on the buyer side, and an additional 3% on the listing side. Removing the commission from the deal means that theoretically, you could pay 6% less, and the seller would walk away with the same amount of cash after closing.
This is a great way to lock in a quick discount, even if you are looking at retail pricing “if you sell to me before you list this property, I’ll offer you 3-5% below list price, but because you aren’t going to have to pay commissions, you’ll still walk away with more money in your pocket”. I love a good win-win scenario!
Bonus – The seller won’t have to deal with inspections/appraisals
A lot of times, the properties I’m hunting wouldn’t qualify for a loan. For that reason, the property would struggle to sell on the MLS. However, it allows me to pay less for a property, because I’ll write the offer to buy the property “cash, as-is”, which alleviates a lot of stress from the seller, while simultaneously allowing me to lock in a solid discount!
Should I Buy Off Market Real Estate Deals?
Really, it depends on how experienced of an investor you are, and what your risk tolerance levels are.
You can make an absolute killing by finding your own deals off-market.
You can also lose a fortune if you buy the wrong property “as is”.
I recommend most people tackle their first deal with a real estate agent, to fully understand what potholes to avoid, and how the buying process looks. This is one of the reasons I tell everybody that house hacking is my favorite way for anybody to get their start in real estate!
That being said, if you want to get the best deals on real estate, you should absolutely find your own deals off-market!
How Do I Find Real Estate Off Market?
Alright, the odds are that if you found this article online you already knew that you want to buy deals off-market…you just don’t know how to do it.
Well, here is the good stuff you’ve been waiting for!
Propstream is the most all-inclusive real estate app for investors, and I cannot recommend it enough. Think of this as the investor’s version of MLS access—on steroids!
Propstream allows you to search for properties, pull lists of homes to market to, skip trace leads, pull tax information on properties, see how many properties a potential seller owns, and so much more.
Propstream has been an absolute god-send for me as I’ve been ramping up my marketing for deals, and I will be using it for years to come.
Not only can you find almost any information you could ever want on a property—and run accurate comps on them—but you can even send postcards directly from their system!
Oh, and you can see all properties—on and off-market—not just properties listed on the MLS!
On top of all this, Propstream allows you to skip trace on the site, which is perfect for when you may want to call or text a lead instead of sending them letters (my preferred way of finding deals). I take every letter that comes back as “return to sender” and either text or calls that lead in order to make sure I’m getting in touch with them!
For a deep dive check out this full review of Propstream!
Use this link for a 7-day free trial of Propstream!
REIsift is the newest tool I’ve added to my tool belt in this list, and one of my favorites!
REIsift is a data management tool, that allows you to market more like a sniper than a crew-served weapon.
REIsift allows you to upload every list you pull, tag them, and then stack them all together to find the most motivated sellers to market to. For example, yesterday I drove by a property that was all boarded up. I added it to my driving for dollars list in Propstream. When I exported that list and uploaded it to REIsift I tagged it as “driving for dollars”. Now, I was looking through my list of properties that I had found while driving around—I filtered the records for only properties that were tagged as driving for dollars—and I immediately noticed that this property was also tagged as a code violation and pre-probate property.
This property had three major red flags, so I skip traced it, picked up the phone, and called the owner. I will be looking at the property on Thursday, and if my appointment goes well, should be able to lock it up ASAP!
REIsift is definitely not necessary when you’re first starting out, but if you plan on doing consistent marketing, or a lot of volume, it will save you a fortune compared to what it costs!
Here is an article I wrote with more information about REIsift.
Here is a discount link if you want to give REIsift a shot!
Ballpoint Marketing and I are going to be doing business together for a long, long time. In fact, there is a really good chance that you have seen the ads I’ve been running for them on my platform. I believe in these mailers so much, that I was okay staking my reputation behind them to help them grow 😊
Ballpoint is the best direct mail marketing company I have ever used!
In the last six months, I have purchased and launched 8,000 Ballpoint mailers. From these mailers, I purchased six homes—which I wholesaled—and took control of a 40-unit hotel, and 39 additional units from the same seller! I’m also currently under contract on a 4-plex for $90k with gross rents of $1,865/month 😊
The reason Ballpoint is so effective is that they look like handwritten letters and have very eye-catching letters which increase your open rate dramatically.
I could go on and on about how big a fan I am of Ballpoint marketing, but I already did in this article.
The reason I prefer direct mail to cold-calling or text-blasting boils down to time. I can order the mailers, drop them in the mail, and wait for the phone to ring. Both of the other options either involve calling or texting people myself to drive leads or hiring other people to do this for me. While neither of these options is bad, I found that my best use of time when first starting out was to focus on the lead management, and appointments/negotiations.
That is why I made it as simple as possible to get the phone to ring…drop letters in the mail, drink beer, and answer the phone—or, pay a call center to answer the phone in my case, haha.
Here is more information on Ballpoint Marketing.
Here is a link to give Ballpoint a shot today!
I’m currently looking at bringing in my first cold caller for the business. Several of my friends have had a lot of success with cold calling, but I haven’t pulled the trigger on it yet.
You can cold call yourself by skip tracing a lead, and then picking up the phone and, you guessed it…calling them.
Orrrrr…you can hire a virtual assistant to cold call for you. That is what my friends have all done, and as a former Marine Corps recruiter who had to cold call a lot, I definitely recommend going this route before you decide to make 10,000 phone calls a month yourself, haha.
Another option for marketing that has become popular recently is text-blasting (or SMS marketing). I’m not going to recommend a specific company here because I still haven’t decided which one I like the most. I’ve used Launch Control and Lead Sherpa, and several of my friends use REIskip, but I’m not sure which one of these I’ll decide to use long-term.
I really just use text blasting for my return to sender mailers, but perhaps one day I’ll make it a larger percentage of my marketing.
Lots of people in my market still use landlines, so direct mail just seems to return a more predictable amount of leads for me
REsimpli is the real estate CRM I personally use to track all of my deals. From the moment a lead calls in, until the moment I buy (or offload) their property, it is tracked through REsimpli.
There is simply no way I would ever be able to keep track of my leads without this CRM. The more leads you bring in, the busier your life will become, and the harder it will be to follow up with leads appropriately.
REsimpli not only tracks all of the leads that come in, and allows me to follow them along the lead pipeline, but it allows me to set up automatic text-message follow-up systems too! I love this because I can set a lead that “ghosted” me on an automatic drip, and stay in touch until they ask to be taken off the list—without taking any time away from working my more promising leads.
To drive home how powerful this is, this Saturday my team is meeting a lady at her property (two homes on one parcel) to look at it for me to give her a cash offer. The price she is asking is very tempting, and unless there is something very wrong with the property, I think this will be a solid deal. This lady was one of the first three leads I ever input into REsimpli and has been on an automatic drip from me for almost a year now.
If it hadn’t been for the automatic drip follow-up system, I wouldn’t have been the person she called when she finally decided to look into selling the home!
Assuming this deal goes through, that follow-up system will singlehandedly pay for my REsimpli subscription for at least the next 2-3 years.
Additional Systems For Finding Off-Market Deals
Call Porter has been a game-changer for me!
Call Porter is the Call Center Ryan Dossey built for himself, which was so successful he scaled it into a full business.
When somebody calls the phone number on my direct mail letter, a Call Porter rep answers the phone. They screen the caller, input their information into my CRM, and even schedule a seller appointment using my Calendly link in order to put it on my calendar at a time that works well for me.
This allows me to drop letters in the mail, and then sit back and wait for seller appointments to appear on my calendar. Then I simply jump on the phone and schedule a time to walk through their property with them in order to write an offer on their property!
I have no idea whether Call Porter will give you a discount if you tell them that you heard about them through me, but it can’t hurt to give it a shot. They don’t have a referral system, but I know that I’m receiving a discount for being a member of Ryan’s coaching, so they might hook you up if you ask, haha
Again, Call Porter is not necessary to find deals, I just found it extremely helpful because a) I hate answering the phone when I don’t know who it is, b) I hate getting the “fuck you, take me off your list” calls, and c) I worked in a vault for the last two years I was on active duty, so I couldn’t answer the phone even if I wanted to.
When you decide to scale, this is a great way to help you do it!
Another piece of the off-market lead flow puzzle is to build a website that generates leads passively. My friend Ryan Dossey recommended Investor Carrot to me, and after doing my research I realized that he was right!
Ultimately, I ended up buying this domain for Freedom Properties and launching my carrot website last fall.
Investor Carrot is an awesome website that allows you to build credibility within your market and rank high enough on Google that people will find your company when looking to sell their home.
I wrote a comprehensive review of Investor Carrot as well. Be sure to check it out if you would like more information!
Also, here is the link to set up your own Carrot website and begin bringing in leads passively. I am currently using their lite plan, but am seriously debating the leap to their pro plan as I write this, haha. Definitely don’t worry about paying for their expensive plan right away, the lite plan is more than sufficient.
I’ve already landed one deal from a Carrot lead, which will pay for this website for the next 4+ years, haha!
Learning to Find Off-Market Deals is A Valuable Skill!
If you’re interested in learning how to find your own off-market deals, check out my course which will teach you everything you need to know to get started along that journey!
Start Finding Off-Market Real Estate Deals Today!
Finding Off-Market Real Estate Deals
This turned into a much longer article than I had originally anticipated, and I really hope you find it beneficial.
Learning how to find my own off-market deals was a complete game-changer for me, and the return on investment has been 100% worth the time.
Also, this is just a brief overview, if you are interested in a coaching program like the one I’m in, I would be happy to introduce you to Ryan and his team over at Create Cash Flow (CCF). While I don’t believe this is necessary to get started, I can tell you it certainly helped me get off the ground and running much faster.
Happy hunting, and feel free to comment—or message me—your questions about this below. Happy to help in any way!
Thanks for a great article. I am buying a SFR as my primary off market through word of mouth. I am thinking about delving into RE as an investment, but wonder is it really necessary? I love RE, but so far have only been successfully working towards FIRE via stocks.
I wouldn’t say it is necessary, but it can definitely work!
Hi David! Great article! Do you do any Facebook advertisements for Freedom Properties? I’m setting a monthly marketing budget and don’t want to be spread too thin over too many types of campaigns… I’d rather go all in on direct mail at this point but just wanted to get your opinion. Thank you sir!
I do, but not as much as I probably should. That isn’t my realm of expertise, haha. Hit up Ryan Dossey!