How to Find Off Market Commercial Real Estate Deals
Off market commercial real estate is a great way to find the best deal for your business or your clients. To give yourself the best opportunities, it is so important to find unlisted, off-market deals, in addition to the more traditional listed commercial deal route. But how? And why are so many commercial state deals happening off-market?
There are many reasons for keeping some commercial listings off-market, but some include:
Buyers and sellers don’t want speculation as to why the transaction is occurring.
Sellers are interested in selling at a certain price and don’t want it to drop in value if it sits on the market.
Buyers don’t want the competition found in the open market.
The transaction tends to happen much faster with an off-market listing.
Which takes us back to our original question. If it’s not listed publicly, how can you find hot off-market commercial real estate deals?
While networking is always a great way to find any kind of property, it can be especially helpful with off market commercial real estate. But you need to make sure you’re networking with the right kinds of people, particularly:
Local contractors tend to be aware of different opportunities in the area, as they are constantly in touch with people in the business. They also tend to be some of the first people called when fixes and updates need to be made, which puts them in “the know” for different sales that may be ready to move forward.
Network with local contractors and make sure to make your intentions known. Then, they’ll think of you the next time they hear of a commercial property that may be an off market listing!
Real Estate Attorneys
Real Estate Attorneys often have clients that have creditors that need to be paid off, which makes them a great source for off market commercial real estate listings. They may also know of different properties that they know need to be moved off of the books for a client.
Networking with attorneys can clue you into properties that may be becoming available in the near future!
Wholesalers tend to buy contracts of real estate properties, then assign them to an interested seller within a few days. That means this is a great way to find off market commercial real estate, although you may not be in direct contact with the seller this way.
Keep in mind that wholesalers are acting as “middlemen” and you’re likely not to get the same deal you would get if you went directly to the source. Wondering where to find wholesalers? Check out LinkedIn and make sure to make your intentions known in the real estate community.
You may also want to join local networking groups in your area and talk about the work you are trying to do. You want to do anything and everything to make sure that you are at the top of peoples’ minds when a potential off-market commercial property pops up.
Make sure to always consult your professional network when you are looking for great off market commercial real estate listings. You never know who may have access to the information you’re looking for. It just needs to be seen by the right person at the right time to get the results you desire. And it won’t cost you a thing!
2. Direct Marketing
This is another great way to find off market commercial real estate deals. You can work on sending direct mail or postcards to local areas you may be looking in to let them know that you are interested in buying commercial property.
You can also advertise online. This could easily incentivize sellers who haven’t publicly listed their properties to contact you and it’s an easy method to get your name out.
Just be sure to have a solid plan and research the best advertising venues, in order to ensure you have a good return on investment.
3. Public Records
Take a look at public records to find off market listings you may not have otherwise known about. Local newspapers and state government websites sometimes mention properties that will be selling soon.
You could even look for expired listings and contact the seller directly to work on striking a good deal. This can also lead you to foreclosed properties that can be purchased, as well.
More and more websites are popping up that act as a private marketplace for commercial real estate. Brevitas, for example, verifies both buyers and sellers who register with the site, so the process is already done before a deal goes through.
The platform allows qualified buyers to access a poll of private listings they wouldn’t otherwise have access to. To be considered for the website, all listings must meet strict criteria.
So how would it work? A potential buyer would browse vague listing descriptions that match specific criteria that they have entered. When a buyer is interested, the seller is notified and has an opportunity to review the buyer’s profile. An online confidentiality agreement is signed, and the full listing is unlocked with buyer and seller able to easily communicate.
This can help sellers feel confident about the privacy and security of doing an off market deal online. It can also broaden your horizons for private listings in the U.S. and international markets. Many times, a document lockbox will be established on the website to facilitate sharing and provide access only to those who are authorized.
Other online sites like Loopnet and Reonomy can help with off market commercial real estate listings, as well. This can ultimately eliminate the broker, which can save the buyer and seller money on commissions.
5. Browse Auctions
If you look into auction avenues, it’s important to stay up-to-date and know you’ll have to act quickly. Courthouse auctions and website auctions may be the easiest to watch. If you happen to find a property that is a good fit, confirm the auction status, location and bidding procedure and get ready to act!
Make sure to thoroughly research the business property and area where it’s located. Also, remember to not get overzealous in your bidding, or it will only work against the budget you already set in your head.
6. Work with an Informed Broker
You may also want to work with a broker who specializes in off market commercial real estate. This person should have a wide industry network and will be privy to information on private sales. A broker can be invaluable for identifying properties and helping with the negotiation process.
Finding the perfect off market commercial deal can be more complex than basing your search on public listings, but it can yield excellent properties with sellers who may be more willing to negotiate. Don’t be afraid to inquire about a specific property that may interest you. You never know what sending a letter to the owner of a property will do. It may start a conversation that leads to a purchase!
It may take a bit more time to find the best deals, but it’s worth it. Find a strategy that works for you and stay focused on your goals. Make sure to have patience, use diligence and do your research!
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David Haug is a Madison WI commercial real estate broker. He is passionate about helping clients, customers, and friends succeed in commercial real estate. He is also a raging Badger fan. #OnWisconsin Baby! Connect with David on LinkedIn: https://www.linkedin.com/in/davidnhaug/