3. Contact sellers through direct marketing
One of the most readily used methods for finding investment properties outside of the MLS is through direct marketing. Direct marketing can include mail campaigns -- sending a series of postcards or letters -- or online marketing such as Google or Facebook ads targeted to a list of potential sellers.
This avenue for finding off-market investment properties can produce positive results, but can also be time-consuming and costly.
Direct marketing campaigns are typically run over several weeks or months, allowing for multiple touches and an increased likelihood of response. This all adds up over time.
You have the option to buy a list of qualified leads to market to, such as properties in probate, properties in pre-foreclosure, or vacant properties. You might even "drive for dollars" -- drive or walk around your ideal investment area collecting addresses for properties to market to.
It's time-consuming, but if your marketing reaches the seller at the right time, it could lead to a great investment opportunity. If you have the time and the funds to create or purchase a list of qualified potential sellers to market to consistently, this could be a worthwhile avenue of finding off-market investment properties.
4. Look on popular real estate websites
Another free way to find investment properties outside of the MLS is by searching online at real-estate-specific websites such as Zillow, Craigslist, or a turnkey real estate investment platform like Roofstock.com.
Zillow is one of the most readily used platforms in real estate. Although most properties for sale on Zillow are actively listed in the MLS, properties can be listed for sale by owner on Zillow. You can set up alerts on Zillow for free to meet your specific buying criteria in your desired investment area. If a new listing is added, you can be alerted immediately, giving you the chance to identify potential investment properties quickly.
Craigslist has more than 60 million users and 50 billion page views per month. Some sellers use it to list their property for sale in an attempt to avoid paying Realtor fees or listing on the MLS. Investors, like wholesalers, often list properties for sale on Craigslist, as well. Although many leads are duplicate listings from properties on Zillow or are listed on the MLS, it's possible to find quality off-market investment properties on Craigslist.
Roofstock has listings for off-market turnkey rentals. Most of these properties have been recently improved or renovated and all of the properties have tenants and third-party management in place. Roofstock is by no means the only option for turnkey investments, but it's one of the largest platforms. Most of its competitors operate at the local level. As always, conduct your own due diligence on any investment. Do not rely solely on the platform's estimations or valuations.
5. Buy from a courthouse auction
If you're looking for investment properties outside of the MLS, another great option is to buy them at a courthouse auction. Properties going through tax sale or foreclosure are required to go to public auction, where you can often buy properties for far below market value.
In most counties, properties going to tax sale or foreclosure sale are publicly listed on the county's auction calendar. Sales are typically held online, although counties require you to go to the courthouse to bid. A small deposit, such as 5%–10%, is usually required from the winning bidder on the day of the sale. The remainder of the purchase price is usually paid to the county by certified check within two to five days, although every county operates differently.
If you’re buying from a courthouse auction, you'll be unable to access the property beforehand, so it's important to ensure you:
- buy at a great price,
- leave room for unexpected costs or expenses, and
- pull the title to guarantee that no liens will remain outstanding after the sale.
It's important to educate yourself on this process and understand what due diligence needs to be conducted to identify and buy quality investment properties at public auctions.
Although there are other methods of finding off-market properties for sale, these are some of the best ways you can find investment opportunities outside of the MLS.
In many cases, it's beneficial to use a combination of these strategies, which makes it easier to find quality investments. Find the method that makes the most sense for you based on the time or funds you have available.
[Update]: See our Coronavirus Resource Center for up-to-date information on how the pandemic is impacting the real estate market.