Note: The following article includes important tips shared on the 7/13/22 Empire Investment Club event, “Club Conversations: Sourcing Deals and Finding Off-Market Opportunities with Ronald Bowser.”

Tips on sourcing off-market deals

When looking for a great deal on a property you can turn into positive cash flow, many investors seek out off-market opportunities. The concept is relatively straightforward, however, the work involved can be substantial. In a recent EIC event, Ronnie Bowser and Jennifer de Jesus and the De Jesus team contributed their methods for sourcing off-market deals. Here are a few highlights and tips discussed in the EIC event:

Estate Sales and other publicly noticed filings

When death occurs, many times the estate may have to sell a property to settle an estate. These estate sales also can include probate sales. When a will is in probate, the details of the property or properties held in the estate (if there is one) are made public and can be searched. For a fee, you can get lists of probate filings. Many times these properties become a burden on the families of the deceased and buying the property from them may just be a perfect match and the help that they need.

Off-market deals are more benefit to the seller

From the seller’s perspective, it can be advantageous to not list the property — they will avoid commission costs, other expenses and stressors. Without listing, the seller doesn’t have to: 1.) get the property ready for sale, 2.) conduct multiple showings, and 3.) depending on the residency, deal with tenants’ schedules. In addition to money, the seller saves time by taking a deal without having it go to market. Sellers also may just want privacy, so they refrain from listing.

If you’re going to source deals yourself, get an understanding of what is important to that homeowner — ie. best price, quickest sale, as is condition. Find a way to make everyone happy in the transaction and you’ll likely have a deal.

For the buyer, off-market deals can get you a better price due to lack of competition. The downside to this method is that it takes more time and energy to make the deal happen. Even if you target probate: getting the information is simple; what you do with that information is more complicated. Homeowners may not be ready to deal with the probate. If you can find the way to have the conversation and share how you can help them, you are more likely to have a deal.

searching and marketing for off-market deals

Sourcing off-market deals is time-consuming. One tactic is direct mail. There are services that can generate lists, such as tax delinquency or foreclosure, and you can target those lists and their zip codes. You should target the area/group by mailers for at least six months—repetition is what works best with direct mail.

Most counties have their own tax records — you can search and tweak the criteria to create a list of people targeting different things, such as non-owner occupied properties. You can also target zip codes or geographical regions. It’s best to target areas where investment properties likely are. For example, in Bethlehem, the south side of is where most of these properties are, so avoiding the north side would be your best best.

Zillow has their own search criteria where you can search for pre-foreclosure; pre-foreclosure happens when people have been recorded as delinquent on their mortgage. It doesn’t mean that the bank is pursuing them for delinquency or that they are in foreclosure, it just means that they have missed payment and foreclosure is a possibility in the future. You may be able to offer a deal where you purchase the property and lease it back to them, alleviating some of their stress.

Look for absentee owners who own out-of-state properties when generating your target list as well. They are more likely to sell an investment property than their family home.

If you are looking to try this method of sourcing off-market deals, you can pay services to get phone numbers with addresses, or you can hire interns to research the phone numbers, send the mailers and perform the cold calls. These options may be a bit more costly.

Other tips and resources for sourcing off-market deals

• Consider the process of your outreach—how are you having them contact you if they’re interested? Do you have a process in place for follow up and good tracking of your outreach?

• There’s also the traditional yard signage promotion — such as, “we buy your home.” You can rent billboards, buy radio commercials.

• Networking with groups and similar investors who are always looking to buy and sell can generate leads. Cultivate those leads to source your own off-market deals.

• Wholesalers will take a cut but can also be a good resource if you cultivate those relationships.

• For-Sale-By-Owner (FSBOs) are one way to identify property owners who want to save on the sale of their house. You can source these but FSBO or Craigslist sites.

• Contact landlords going through the eviction process or who have problem tenants — they may be in the mindset of getting rid of a property.

• Look at different types of forums people can connect with to find deals. Bigger Pockets is a good one. Meetup.com has real estate groups, especially if they’re locally based. Investors look to network with other investors. Investor groups are a fantastic resource.

• Facebook groups are often regional or neighborhood-based and there is often chatter about home sales or problems with neighbors or VRBOs/rentals. Use social media. People who are having some type of distress will sell a property. Post what you’re looking for, “In Search of” (ISO) in any social media if the audience is appropriate and permissions for the group or page allow for marketing.

• Tour an area you’re interested in. Look for the houses in disrepair. Sometimes the physical appearance of a property is a potential indicator of a property in distress. Look for un-shoveled steps after a snowstorm during winter months and uncut yards in the summer months.

• Real estate agents have access to old expired listings. We can pull up data from years ago. We go back to old data and assess properties that at one point the owners wanted to sell them and weren’t successful or their listing expired. These people at least have raised their hand to sell at one time.

There are multiple ways to source off-market deals, however, you need to have the discipline and often the funds. If you’re patient and commit to sourcing your own deals, these processes can work. As in most things, timing is everything. When you make it clear that you’re interested in buying properties for investment purposes, whether they’re fix-and-flip or buy-and-hold properties, you can create your own stream of steady opportunities for off-market deals.