Many novice real estate investors make the mistake of turning to mainstream channels, such as the MLS, to search for an investment property. But what many don’t realize is that the best deals tend to be found off-market!
Off-market properties are properties that are not formally listed with the MLS or a real estate agent. Some properties remain off-market indefinitely, while others may be available off-market for a period of time before they’re listed on the MLS.
Whatever the case, these off-market properties bring many benefits to both investor and seller. The primary benefit is the fact that you can avoid paying thousands in commissions to a real estate agent. This means that the seller can pocket more money and it also enables them to offer a lower price to the investor.
What’s more, there’s less competition for these off-market properties, since the pool of prospective buyers is generally limited to investors; relatively few members of the public will ever learn that the property is even for sale. Less competition means there’s less of a chance of ending up in a bidding war that will drive up the price.
Sellers of an off-market property are often very serious and ready to move forward. A large percentage of off-market properties are owned by banks or lenders, real estate investment groups, companies and other collectives. It’s rare to find sellers with an emotional connection to the home, which improves your chances of completing the sale. This lack of an emotional connection also enables you to avoid a situation where the buyer requests far more than the property is actually worth.
Finding these off-market properties can be a bit more challenging. They are sometimes listed online via investor-specific websites and even on classifieds sites like Craigslist. This is where you can benefit from having a large network of colleagues in the investment industry, as you can more readily learn about the available off-market properties.
If you’re seeking to get involved in real estate wholesaling and investing in the Chicago area or beyond, or wish to sell a distressed property, contact Greg Teele, CEO and founder of Teele Enterprises Inc. Call 224.343.6890.