We’ve written quite a bit about the benefits of off market properties, especially as it relates to commercial brokers and investors.
But, benefits aside, one question looms:How do you find off market property owners that are motivated to sell?
Below, we’ll explore that question and run through the best practices for finding motivated sellers of commercial real estate.
- Motivating Factors for Sellers
- Why connect with sellers off market?
- How to Find Motivated Sellers Off Market with Reonomy
- Getting in Touch with Off Market Sellers
- Off Market vs. Finding Sellers with Listings
How to Find Motivated Sellers of Off Market CRE
Consider this: there are a great deal of commercial owners that would like to sell their property, that have yet to list the asset or prepare the building for a sale.
Not to mention the fact that there are also many owners that are willing to sell, that don’t have current intentions of listing their property.
The thing is, when a property is off market and not listed for sale, you have to do some digging to identify whether or not an owner is actually motivated to sell.
Without access to the right information, that can be a very time-consuming and inefficient task.
It’s no worry though, because it doesn’t have to be.
We’ll look at why, but first, let’s consider some of the reasons why commercial property owners would be motivated to sell.
Potential Motivating Factors for Sellers:
1. Business owners in need of newer or larger buildings.
2. Owners approaching loan maturity.
3. Long-time owners looking to retire or lessen their management load.
4. Owners in distress.
Not every property owner will be looking to sell off market, so not all owners will be responsive if you were to reach out to them.
If your outreach is targeted, however, then you’ll run into that issue much less frequently.
With access to building and lot, sales, and mortgage data on commercial properties, you can see if any of the cases above are likely, to make sure you’re reaching out to worthy, qualified leads.
So then, why off market?
Why connect with sellers off market?
One benefit of off market deal-making is the ability to take a very personal approach to your interactions.
On Reonomy, you can see an owner’s full portfolio in one place, which you can fully analyze and use as fuel for your outreach to them.
Another benefit of finding deals off market is that you can skip the broker fees.
For investors, discovering and interacting directly with the selling owners cuts out the need for intermediaries.
Overall, buying real estate off market offers much more flexibility.
Negotiations can be more fluid, creating better deals for both parties. The premium on off market deals is much greater for buyers, as well.
This flexibility can be a big benefit based on the kind of deal you are looking to create.
By using a tool like Reonomy, you have the opportunity to spot motivated sellers of commercial property, then access contact information and get in touch with owners directly.
You no longer have to spend valuable time taking trips to your local county recorder, clerk, or assessor’s office to perform a property search and look up owners.
How to Find Motivated Sellers Off Market with Reonomy
When searching for sellers on the Reonomy Platform, the more targeted you can make your efforts, generally, the better.
You can search your market for properties based on asset type, most recent sale date and amount, most recent mortgage amount, loan origination and maturity dates, building and lot size, and much more.
You’d likely start with a location and asset type.
Add filters for state, city, MSA, county, zip code, neighborhood, and street name.
Then add any number of asset class filters across commercial, multifamily, and land property types.
Find Motivated Sellers by Sales and Loan History
If you are looking for a very specific type of property to purchase or market, you can run a few different types of searches.
One way to do this in Reonomy is to search for properties coming to term on loans. If an owner is about to refinance, they may be looking to sell.
You can also search for recent sellers.
Reonomy allows you to search by ownership information to uncover portfolios. An owner who recently sold an asset may be looking to sell off additional properties.
You can try any of the example searches yourself within the Reonomy platform and tailor your search to your liking.
Find Sellers by Asset Class and Location
Use asset class filters within your location to identify owners of properties in the same asset class.
If you are looking to purchase a multi-family apartment building, it would make sense to look around your area for other owners of multiple multi-family apartment buildings.
From there, you can directly access their contact information and look at their ownership portfolio.
By viewing the ownership portfolio, you can look at all of the holdings they are associated with and determine if approaching the owner would be worthwhile.
Find Sellers With Reonomy Comps
Once you identify a potential property of interest, you can view comparables to find other similar assets.
Search the property you want to purchase, and you can directly run a search for comps from the property details page in Reonomy.
Search Properties by Owner
With Reonomy, you have the ability to search for properties byownership information to unlock their portfolio.
You can conduct a search in Reonomy by the name of the owner of record, the owner mailing address, and if it is owner-occupied or not.
With the ownership search feature, you can see every property the LLC or individual is involved in.
This allows you to see the scope of their portfolio and further determine if it might be worth your time to approach a potential buyer.
It will also help you determine what the seller is interested in on a wider scope and how long they have owned some of their properties.
Getting in Touch with Off Market Sellers
With these search tools, you’ll have a higher probability of finding a potential new seller and a much stronger pitch with the information you’ve collected.
What’s left is to reach out to the owner directly.
Reonomy gives you full access to property owner contact information, including phone numbers, email, and mailing addresses.
Additionally, keeping a roster of possible sellers around makes it possible to find sellers who may transact commercial property now or in the future.
You might get lucky and quickly find a seller, but it’s not a guarantee.
Many of the people you talk to when prospecting will not have a desire to sell their commercial real estate on that day.
A large percentage of potential sellers will have a future interest, however, to sell their commercial real estate property, so it’s important to develop those relationships where ever possible.
Establishing relationships over the long term becomes a powerful tool. And the best way to establish those relationships is with direct contact.
Off Market Vs. Finding Sellers with Commercial Listings
If you are not looking for off-market deals, check listings sites for properties for sale. Though not typically off market, you can also turn to listings to find sellers.
CRE search engines like LoopNet and CREXi have large databases and have different features and pricing tiers to search.
Commercial listing databases are full of clients who already have representation.
If you are looking for a listings platform, we have compiled a guide to the best commercial real estate listing platforms.