Houston is consistently growing in popularity, and it remains one of the best places to live in the country – as well as one of the most promising areas for real estate investors to make money.
Unfortunately, millions of people in and outside of Houston have come to recognize what an amazing city it is, and that has led to a surge in demand and competition from homebuyers. That increased competition has led to higher prices, fiercer negotiations, more stressful purchasing processes, and less time for due diligence.
Of course, these drawbacks only apply to properties that are publicly listed. If you had a way to find off market properties, you could ostensibly find much more attractive and potentially much more profitable deals.
But what is it exactly that makes off market properties in Houston so valuable? And how do you track them down?
Why Are Off Market Properties Valuable?
These are just some of the reasons why off market properties are so valuable to real estate investors in Houston.
- Les competition/less demand. The biggest advantage is that there’s less competition and less demand for these off market properties. There are potentially no other buyers interested in the off market property, meaning you might be able to offer a lower price – and take your time doing it.
- More time for due diligence. Real estate investing is a risk, so it’s important to do your due diligence before every transaction. Unfortunately, in a market where properties are sold in just a few days, and sellers usually have multiple offers on the table, there’s rarely enough time to do proper due diligence. Making offers on off market properties gives you much more time to do proper due diligence.
- Flexible negotiations. Similarly, off market deals typically involve more flexible negotiations for both the buyer and the seller. There aren’t multiple offers to consider. There isn’t as much time pressure. Sometimes, the buyer and seller are in more direct contact with each other.
- Smoother transactions. All of these transactions flow much more smoothly for both the buyer and the seller. There are fewer complexities and potential hiccups to deal with, and both the buyer and the seller can finalize the deal relatively hassle-free. Off market potential buyers often make cash or as is offers, expediting and streamlining the process even further.
- Unique opportunities. When you’re searching for off market listings, you’re casting a wider net. This allows you to find unique opportunities that may not be available on the public market.
The only question is, how do you find these off market properties if they aren’t publicly listed for sale?
Networking: Your Best Bet for Finding Off Market Properties in Houston
The best strategy to find off market properties in Houston is networking. Every connection in your network is potentially someone who has a property they’d be willing to sell or someone who knows someone who has a property they’d be willing to sell. Accordingly, the bigger your network is, and the better connected the nodes in your network are, the better your chances to find off market properties.
These are some of the best types of contacts to connect with:
- Property managers. A Houston property management professional is arguably the best connection to have in pursuit of off market Houston properties. Property managers work with property owners and sometimes manage hundreds or even thousands of units in a given area. As an added bonus, once you acquire the property, you can work with the Houston property management team to take care of most of the responsibilities in exchange for a small portion of the gross rent you collect.
- Real estate agent. Another great option is to connect with local real estate agents. While real estate agents most commonly deal with publicly listed properties, they’re also intimately familiar with the local real estate market and multiple listing service. They may be willing to help you find off market properties through mutually valuable transactions.
- Real estate lawyers. Similarly, it pays to connect with real estate lawyers. It’s always worth having a real estate lawyer on speed dial if you’re a real estate investor anyway.
- Anyone who’s well-connected. Almost anybody can be a valuable addition to your network if they have lots of connections. If you meet someone who knows 1,000 people, and each of those people knows 100 people, that’s 100,000 friend-of-a-friend connections. If even 1 percent of those people are potentially interested in selling, that’s 1,000 potential deals.
If you’re interested in building your network, these are some of the best tips to do it:
- Meet lots of people. Meet as many people as you can in as many ways as you can. Go out and meet people at networking events and in public places, but also connect with others on social media.
- Keep your network active. If you want to keep your network active, you need to reach out regularly. Even simple “hello” or “happy birthday” messages can keep your connections strong.
- Do favors before requesting favors. It’s a good idea to offer value to your network before requesting value from others; in other words, do favors before requesting favors. Instead of immediately asking for leads, buy your new connections a coffee or a meal.
- Make your intentions known. Make sure all of your contacts know that you’re interested in buying off market properties. Remind them periodically.
Marketing and Outreach for Off Market Properties
Alternatively, you can choose to practice marketing and outreach strategies to reach homeowners directly. This is an excellent complement to networking, as it allows you to reach people who may not be especially well-connected. Some of the most common strategies include:
- Local ads, billboards, etc. If there’s a particular neighborhood that interests you, consider purchasing local ads, displaying billboards, or distributing flyers. If this strategy leads to even one successful deal, it could be worth the investment.
- Direct mail. Another option is to send direct mail. Let homeowners in the area know that you’re looking to buy properties and offer them incentives for reaching out to you.
- Calls and texts. Similarly, you can get contact information for homeowners in a particular area and send calls and texts with marketing messages.
Are you in search of off market properties and other interesting real estate investment opportunities in Houston and surrounding areas? Or are you in need of a team of property management pros who can help you manage the day-to-day operations of your growing portfolio of rental properties? We can help. For a free consultation, contact Green Residential today!
Michael is Green Residential’s Vice President. He helps to keep the team organized and running smoothly. Prior to joining Green Residential, he spent 12 years working at Cadence Bank in the mortgage loan servicing department, where he specialized in loan audits, modifications, and bankruptcy-related issues for the mortgage portfolio.
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