The state of the current business world can seem a bit unsettling…
While the COVID-19 outbreak has left much of the country in a state of lockdown, that doesn’t mean that investors, and subsequently brokers, have to lockdown as well.
In a down market, off-market deals become much more important and prevalent. The good news for investors and brokers is that finding motivated sellers off-market isn’t that difficult anymore.
Why is that the case? How do brokers and investors find sellers and land off-market deals?
Amidst COVID or not, you can use Reonomy’s property intelligence platform to discover assets by type, quickly identify if a property is likely to sell, and see exactly who the owners are (including contact info).
Motivated Sellers of Off-Market Real Estate
There are a number of commercial owners that are eager or willing to sell, that simply haven’t gone to the market or connected with an agent yet.
In order to take advantage of that, you’ll have to do some digging to identify whether or not an owner is actually interested in selling (and why).
A great place to start is with Reonomy’s new Likely to Sell feature, which combines machine learning with more than 30 years of sales data to algorithmically predict properties that have a high likelihood of selling within two years.
With that and a combination of other filter types, you can very quickly source new, targeted off-market deals.
How to Find Off-Market Deals With Reonomy
In tandem with the Likely to Sell feature, you can use the Reonomy platform to filter the market by geography, asset type (and sub-types), and owner.
Additionally, filter the market for properties based on:
- Most recent sale date and amount
- Most recent mortgage amount
- Loan origination and maturity dates
- Building and lot size
- Tax assessments
All of this enables you to quickly analyze your niche of the market, see whether assets are likely to sell, and get in direct contact with property decision-makers.
Let’s run through it from a high-level…
The best approach is to start with identifying the location and asset type of your choice.
Across any market, you can find sellers of real estate of all kinds, and for a combination of any kinds you might prefer.
For example, if you are looking to purchase a multi-family apartment building, it would make sense to look around your area for owners of multiple multi-family apartment buildings.
Find Sellers by Sales and Loan History
To get more granular in your search, you can analyze the sale and debt history of a property more thoroughly.
One option offered by Reonomy is to search for properties coming to term on loans. If an owner is due to refinance, they may choose to sell their property instead.
Another option would be to search for recent sellers and buyers. Reonomy allows you to search owners by name to uncover their portfolios. An owner who recently sold an asset may be looking to sell off additional properties.
Find Sellers With Reonomy Comps
Once you identify a property of interest, you can also view its comparables to find other similar assets.
What you might do is look up a property of interest, or even look up a property you’ve already brokered, then simply click Reonomy’s “Comps” button, which will take you to a list of similar assets.
Comps are used to understand asset values, but can also be helpful in spotting additional opportunity that falls within your typical scope.
Getting in Touch With Off-Market Sellers
Reonomy’s property intelligence tool increases the probability of finding new prospective sellers off-market.
It can also help you (A) craft a much stronger pitch with the information you’ve discovered, and (B) get in touch directly with decision-makers.
Reonomy gives you full access to property owner contact information, including phone numbers, email, and mailing addresses.
You might get lucky and find a seller quickly, but there is no guarantee. Given the off-market scenario, and given potential turmoil in the market, some of the owners you talk to when prospecting may not be looking to sell at that moment in time.
Nevertheless, it is important to keep a roster of all potential sellers, as there will be many that will have a future interest to sell their commercial property. Developing those relationships wherever possible may pay off handsomely down the road.
Establishing relationships over the long term is powerful for business growth. The best way to start those relationships is with direct contact.
- Quarantine tip: In a COVID-stricken market, just like you have extra downtime to reach out to owners, they have extra time to field calls. Use the time to dig in a little deeper to get to know owners and build relationships with them.
Access to owner contact information is a large piece of the puzzle when it comes to sourcing and landing off-market deals.
Without getting into direct contact with a decision-maker, your outreach time will not be spent very productively. The Reonomy platform can make that process a little easier to navigate.
Below, we dive a little deeper into the “why’s” around motivated sellers.
Motivating Factors for Sellers
Not every property owner will be looking to sell off-market, so there will be many individuals who will not be responsive if you were to reach out to them.
If your outreach is more targeted however, you will encounter this issue a lot less frequently.
Here are some scenarios that may cause a property owner to consider selling their real estate assets.
- Business owners in need of newer or larger buildings
- Owners approaching loan maturity
- Long-time owners looking to retire or lessen their management load
- Owners in distress
Targeting individuals in one of these situations will increase your chances of finding owners who are interested in selling their property.
You can use Reonomy’s building and lot, sales, and mortgage data on commercial properties to determine if any of the cases above are likely, and based on that information, reach out only to worthy, qualified leads.
Why Connect With Sellers Off-Market?
So then, if identifying the right off-market prospects is so tricky, why even do it?
One benefit of off-market deal-making is the ability to take a very personal approach to your interactions.
For example, Reonomy allows you to see an owner’s entire real estate portfolio in one place, therefore you can fully analyze that individual’s situation and personalize your outreach to them accordingly.
Another benefit of finding deals off-market is that you will encounter less competition from other potential buyers.
An owner of a property that is actively listed for sale will most likely be approached by multiple interested parties who may end up in a bidding war for the deal. Off-market owners on the other hand, will not have a bunch of competing offers to choose from, and may be more willing to negotiate or settle for your initial proposed purchase price.
Overall, buying real estate off-market offers much more flexibility.
Negotiations can be more fluid, creating better deals for both parties. Off-market sellers can maximize their earnings by avoiding broker commissions associated with listing their property with a brokerage.
Using a tool like Reonomy will allow you to not only spot motivated sellers of commercial property, but also access their contact information and get in touch with them directly.