Top 3 Reasons to Invest in Non-Listed Properties
Early on in my investing career I bought properties that were listed on the real estate multiple listing site (MLS). This always proved to be a struggle and a whole lot of work. I actually went and attended school and got my real estate license so I could have access to the latest properties before they were noticed by the thundering herd of buyers. It did not take long to learn that sellers of a property that was freshly placed on the market were not motivated to take low ball offers. I was becoming frustrated searching hundreds of listings, and then crunching the numbers, only to narrow it down to a few worthy properties. I would then drive to these few properties and often discover the properties needed work, or more work than anticipated. Back to the drawing board, searching more properties, looking at more properties, crunching more numbers, occasionally writing an offer that would not be accepted and not make its way to contract just to start the process all over again. I thought there had to be a better way.
I found the better way in unlisted properties:
While doing much research I learned of properties that were not listed. I ran the numbers on these properties and wow they worked much better, so I started buying them. I enjoyed this concept much better so I continued to search for more and more unlisted properties. I indeed found the secret to great investing was found in unlisted real estate properties. (What I mean by unlisted properties, is they are not listed for sale through the conventional MLS system)
Why Non listed properties are better for the real estate investor:
• The MLS system is retail focused: They are intended to attract the retail buyer. Often a seller becomes skeptical when they find out their home (in which they raised their family) is being sold to an investor). Sellers become further skeptical when they see an investor looking for what they perceive as a low ball offer.
• Non listed properties are like buying business in a box: Sellers who sell these non listed properties tend to market them toward a real estate investor. They are fully aware of what an investor is looking for ( a return on the investment). The price structure tends to already be conducive for an investor to purchase and make a return on their investment; often these properties already have a tenant in place. These properties often tend to be a turnkey property that is already a performing asset.
• Non listed properties: tend to be positioned within the Micro markets that make the best financial sense for the investor. Most investors are looking for cash flow and or equity growth. Sellers who sell investment properties have originally purchased these properties within the micro market of a city that best represents a solid equity growth. They understand this is all about location.
Non listed properties are typically promoted through different channels than the MLS. Sellers understand that the typical real estate MLS channels is designed for the home buyers and sellers to buy and sell. Investors or rehabbers typically sell their buy and hold real estate through promoters who work with investors.
To learn more of these types of investment groups visit our Properties page.