You don’t have to wait to see a for sale sign go up to find investment property (or any property, for that matter). There are potential off-market real estate options available—if you just know how to find them. Whether you invest in real estate with your personal funds, with your self-directed IRA, or if you’re simply looking for your dream home, you can locate off-market real estate opportunities in a few different ways.
Off-market real estate deals are appealing to savvy individuals who realize the potential of these transactions. Often, you score deals that you won’t find in properties listed on the market. And you can cut through some of the conventional buy-and-sell red tape to enjoy an easier process for all parties. You can even negotiate a more flexible purchase timeline.
The strategies below can help you buy property ahead of your competition (with a greater chance your offer is accepted). And you potentially bypass the costs of dealing with multiple real estate agents.
5 Ways to Identify Off-Market Real Estate Investments
1. Explore online sites for off-market real estate
You’ve probably seen homes offered on sites like Facebook and Craigslist. But there are also websites for off-market real estate. You’ll find sites for both commercial and residential property, and most feature filters so you can dial in specific locations and types of homes and/or buildings. It may take a bit of time to plow through all of the listings on different sites, but it’s fun looking and you may find exactly what you’re looking for.
2. Find insider information
And in this case, it’s legal! Real estate agents, wholesalers, builders, and contractors can help you find off-market real estate.
Contact real estate professionals and ask if they have listings of homes that sellers have requested to remain private. These are commonly called “office exclusive” or “pocket” listings. While the National Association of RealtorsÒ (NAR) has rules in place for these private listings, they do occur. And if you work with a well-connected real estate professional, you might find and buy your dream investment property well before your competition even knows it’s there.
Wholesalers are a gold mine. These are typically investors who buy the contracts to sell distressed and/or under-market properties and find individuals or investors to buy them. They are dialed into the process and have a knack at finding off-market real estate.
Builders and contractors are in the industry, after all, and they network with homeowners, investors, and others who may know of opportunities you can check out.
3. Drive around and knock on doors
You can always hop in the car and drive through neighborhoods that are of interest to you. This gives you a true lay of the land and the opportunity to identify potential homes you want to buy. The homes you see most certainly won’t be on an off-market real estate list. In fact, the owners probably aren’t thinking of selling—until you knock on their door and ask. To learn more about how this works, check out this recent webinar with real estate investor Bill Cook and Advanta IRA’s Larissa Green.
4. Consider direct mailings
This process is a bit like knocking on doors, without physically doing so. Essentially, you buy mailing lists of addresses in desired locations and mail each property owner that you’re interested in buying real estate in the area. This is a popular strategy, and we bet you’ve even received one of these mailers yourself.
5. Join investor networking groups
These are everywhere. From state-sponsored and national real estate investment associations to local associations and groups—you can join investment clubs to network and find off-market real estate deals.
Investing in Real Estate with Your IRA
Investing in off-market real estate in an IRA is a strategy many individuals use to build tax-sheltered retirement income. Capital gains and other income grows in your IRA on a tax-deferred basis, creating more capital for you to reinvest.
The process of locating investment property as outlined above is the same, but the finer details of investing in off-market real estate with your IRA are different. For example, your IRA buys the property with funds in the account, and the property is titled in the name of your IRA.