Finding a good deal for an investment property can be a challenge. In our last post, we talked about foreclosure properties, which are usually good deals, but also tend to be very competitive. In this post, you will learn more about off-market deals. These can be more difficult to find, but these sellers focus on the niche group of real estate investors, which can mean less competition and an easier acquisition.
Pocket Listings
In a pocket listing, a broker holds a signed listing agreement with the seller, but the property is not advertised or listed on the multiple listing service (MLS) which means your typical agent and home buyer don’t know the property is for sale. With these properties, the general public is unaware that the home is even for sale, meaning there is usually less competition for you as the buyer. Sellers may choose to list their home as a pocket listing because they generally provide the seller with more privacy than a traditional listing. These listings can also lead to a faster, smoother transaction overall. A good way to find these listings is to create connections with local real estate agents who will likely be aware of off-market listings like this.
Wholesalers
Perhaps the best way to find an off-market deal is to use a wholesaler. Wholesalers are frequently non-licensed real estate specialists who work closely with direct sellers or even other wholesalers to bring off market deals directly to real estate investors. They essentially act as the middlemen who put a property under contract then assign their right to that contract to an investor who then steps in to complete the rehab of the property. There is a large variety of different wholesale networks to get involved in. In the D.C. metro area, one place to keep an eye on for wholesale deals is Great DC Deals.com. This website provides up to date information on local real estate investment properties for sale in the metro area. When searching for wholesale deals, be sure to do your research and make sure the deal works for you. One thing to watch out for is a wholesaler that may be attempting to do a daisy chain. This is when a third party, not the actual wholesaler, holds the deed to the property. These particular deals tend to have difficulty closing once the project is complete, and sometimes they don’t even close at all, leaving you in debt without a property to sell.
Real Estate Investment Events and Meetups
There is a large community for real estate investors, especially in the D.C. metro area. Getting involved with REI events and meetups can be hugely beneficial to your business as a real estate investor. At these events, you will be able to network with other investors who can help you learn the ins and outs of the business. By establishing relationships with other investors, you also open yourself up for the opportunity to get a property from another investor. It is possible that an investor could purchase a property with the intent of completing a rehab project, but after the purchase they realize that they don’t have the time or resources needed to complete it at the time. In this case, the investor may approach other investors they know to unload the property before it becomes too much of a financial burden to them.
Lenders
Your lender is an excellent source for finding off-market deals, especially if that lender is local to the area you are trying to find a property in. At WCP, not only do we have extensive knowledge of the process and the local market, we also have connections in the area to builders, wholesalers and real estate agents that have a bank of properties they are trying to sell to investors. We regularly have 5-10 off-market properties each month that we are looking to place with investors. This is perfect for investors who don’t want to compete with hundreds or even thousands of other investors on market. Contact us today to learn more about how we can help with you find and acquire your investment property.