How to Find Great Commercial Real Estate Deals Outside of Your Market
Where real estate investments are concerned, many investors regularly discuss the elusive off-market deals. By finding commercial real estate deals outside your market, you’re much more likely to face decreased competition, negotiate more effectively, and secure your desired property. So naturally, this can positively increase cash flow, so off-market real estate is a great way to retool your investment strategy.
However, before you start playing the real estate market or setting aside capital for real estate investing, it’s essential to understand how investment properties work and find deals on the correct property type. Whether it’s a rental property, an office building, or another piece of commercial real estate, here’s how to find the best off-market deals.
Turn to a real estate agent.
While it’s easy to think real estate agents focus on their buyers, many realtors also maintain seller lists. That way, if market conditions are favorable, a realtor can prod potential sellers into listing their real estate. In some cases, real estate representatives will provide cold calls to property managers, tenants, and landlords to discuss selling real estate. While it’s not always possible to convert someone into a real estate seller, especially if you’re a new investor looking to acquire your first property, a real estate agent can help facilitate long-term real estate investment strategies. This can help you find the ideal rental property or investment property in the United States.
Rely on traditional real estate direct mail.
Many successful real estate investors in the United States depend on direct mailing opportunities to acquire property. Pros enjoy these strategies because they typically don’t require much money and can help you develop long-term real estate property strategies. Especially for a new real estate investor, direct mail can lead to higher returns. Mailers can even be a long-term investment as they’re comparatively easy to update, intuitive for beginners, and don’t require a broker.
If you’re interested in a direct mail campaign, the next step is to determine your audience so you can craft a targeted campaign. Then, once you’ve developed an effective mailing list, you can send out mail to single-family homes and properties that you’d like to acquire. No matter the type of real estate, from residential real estate to commercial properties, direct mail can help connect you to adequate buying opportunities in the long run.
Contractors regularly network with real estate professionals.
Contractors can help you find unlisted real estate and different property types. This is a good idea for individual investors, and you can even consider limited partnership opportunities to help you hit your investing goals. The only downside is that this requires you to have existing network connections, especially if you want to make an excellent investment. For example, a contractor may be working with real estate developers to fix up a commercial property to sell. If you’re looking for real estate investment opportunities and you have an established relationship, a contractor may be willing to share this information with you.
Successful investors use all different ways to achieve their financial goals, own property and supplement their regular income. Since contractors can help with many types of real estate investing, working with a pro is a great way to bolster your developing real estate investment strategy. It’s also the first step many beginners make when they’re applying real estate investment tips.
Network with fellow investors.
Whether you’re looking to spot a great opportunity for homeownership, or you want to debate market analysis and exit strategies, it’s essential to work with fellow investors and limited liability companies. Whether you’re working with a single investor or a firm, you can gain insight into their strategy, real estate tactics, and willingness to sell. Buying and selling within an investor network is a form of “house hacking” that can pay high dividends.
The best part is that this is an intelligent way to get the most out of your property value. You know that fellow investors and flippers understand the importance of an investment property or renovation opportunity and won’t offer as much hassle as other sellers. You can use this strategy for a long time when you’re trying to connect to property owners, find commercial property to generate passive income, or even list your own home. The next step is to leverage your existing network to find listing opportunities and off-market single-family buildings, condos, or commercial units.
Wholesalers can help you find off-market deals.
When you want to grow your taxable income, add to your net worth, or develop rental income, you can turn to wholesalers to find potential off-market opportunities. Many wholesalers are using clever tactics to put income properties under contract across the United States. A wholesaler can find smart deals from malls to rental additions, flip the right to purchase, and turn it over to the buyer for a commission fee. While this is an adequate rental income or commercial property strategy, a few cons range from property depreciation to bottom-line impacts.
Wholesalers also regularly sell products that need additional work. To avoid dipping into your emergency fund, it’s essential to determine how much work a wholesaler off-market listing requires. You can find an appropriate lender and interest rate to cover costs when you know how many repairs and renovations a property needs. You can also determine whether or not a property rehab deal is a right fit for your investment portfolio.
Auctions often feature hidden gems.
Auctions are one of the best ways to find off-market properties with lower property taxes. There are probably already regular housing auctions in or near your zip code, which makes it much easier to connect to local commercial real estate deals. Much like if you’re working with a wholesaler, you can expect most auction properties to require a certain amount of rehab. Depending on the auction’s location, you can buy an off-market property by paying back taxes or past-due utilities taxes.
When you know how to find the right off-market deals, it’s that much easier to diversify your real estate portfolio, invest in properties that pay regular dividends, and collect the monthly rent of your commercial properties.
About the Author:
Annie Dickerson and her partner Julie Lam are founders of Goodegg Investments — an award-winning real estate private equity firm — and creators of the Real Estate Accelerator Mentorship Program. They are authors of the book Investing For Good and hosts of the popular Life & Money Show podcast: https://goodegginvestments.com/
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.