Off-Market Deals
If you’re like most people, you probably have a vision of what your dream home looks like. How to Fund and Analyze Off-Market Deals? You know that it will have the perfect design, location and amenities; it’ll be perfect for entertaining or your family. But one thing most people never consider is how much money they can save by getting an off-market deal on the property they want. I recently sold a 25-acre estate in Upstate NY and realized that there are many ways to get more value out of a property than what’s listed on the MLS. So if you want to make some money while saving time and effort, keep reading!
Be Clear About What You Want
- Know what you want. If it’s a home, then know where the top priorities are: location, size and price range. If it’s an investment property, then focus on cash flow and long-term potential.
- Be clear about what you want. The more specific your requirements are (e.g., “I want a house with three bedrooms, a pool, and walking distance to beaches in Montauk NY”) the easier it will be for someone else to find what they have been looking for all along!
- Have an idea of where else similar properties might be available (both off-market and not). This can help narrow down the search area quite nicely! And if none exist nearby? That’s fine too: there are plenty of other locations across South Shore Long Island where comparable homes might be found at lower prices than those currently listed on MLS (or even private sale sites like Zillow).
Get to Know Your Network
Your network is a great place to start. It’s likely that you know people who have access to deals, and they may be able to help you find some off-market deals.
You might even have connections in the local market—your friends, family members, or coworkers may know someone who could help you out too!
If all else fails, try reaching out through social media or emailing companies directly (but don’t forget to use discretion).
Run the Numbers on Every Deal
Once you’ve identified the deals, it’s time to run them through your numbers.
Here are some questions that can help guide this process:
- What is the current price of the property? How much has been paid in recent years?
- How many years have passed since a new owner bought this property? What did they pay for it and when did they close on their purchase?
- What was the average rent paid by tenants during those same years (or if there were no tenants in place yet, what was estimated at any other given time)?
Run the Numbers on Every Location
- Run the Numbers on All Locations
When you’re looking at a single location, it’s easy to forget that you need to include the cost of building in your analysis. If you are looking at multiple locations, however, this will be important. You should run an analysis for each location and then add up those costs (including any common expenses like parking or utilities) before calculating what your total off-market purchase price would be.
- Weighted Average of Costs
A weighted average is an effective way of getting a more accurate picture because it takes into account how much money each property is worth when compared with other similarly sized properties nearby as well as their distance from other nearby locations where similar deals have been made recently (or not).
Vet the Asset
An asset is any real estate loan or property that has been sold at a price below what it’s worth. It can be a single property or an entire portfolio. Think of it as the “good” kind of deal, where you get to buy undervalued assets and make money on them while they’re still hot.
It’s important to vet your assets by going through the closing process with a qualified buyer who understands their potential value in order to ensure that you get paid top dollar for your investment.
Examine the Details of the Asset
When analyzing an asset, you need to look at the details. What are the terms of the lease? What are the terms of purchase? What are the terms of financing? And above all, what are their maintenance and management agreements with respect to your investment property?
These questions should be answered before entering into any deal: if you don’t know what’s going on with this deal, then how can you trust it?
Do an Advanced Title Search and Lien Check
In order to find off-market deals, you’ll need to perform a title search and lien check.
The first step is to check the title of your property for errors (such as liens or easements), encroachments and zoning restrictions. This can be done by using an online service like Zillow or Realtor.com’s own Property Search tool; however, it’s also important to verify that all parties are listed on record with their respective counties’ registries.
Once you’ve verified that there are no issues with your property’s title, it’s time for some legwork!
Takeaway:
- You need to be clear about what you want.
- You need to know your network and how it can help you get there.
- You need to run the numbers on every deal, location, asset type and size—and then do it all again!
V Global Holdings is a full-service real estate firm specializing in commercial brokerage services for owners/investors of off-market assets as well as developers looking for opportunities in specific markets throughout North America. We have access (and relationships) with all types of lenders who will finance projects including acquisition financing; construction loans; mezzanine loans; equity lines of credit etc…Edgemont Financial provides leasing services as well as financial structuring solutions for companies looking at expanding their operations into retail space or converting existing buildings into office space through non-recourse financing agreements where there are no liens placed against any portion of the property sold under these agreements.”
Conclusion
The most important thing you can do is to understand the process and be organized. That way, you’ll have a solid plan in place before heading out on your next deal.
