The Best Kept Secret for Finding Off-Market Deals
/
If you make this call to five local property management companies, you will have at least a few potential deals to consider, and have property management contacts in place for future deals.
Over the past several years, the real estate sales market has strengthened and prices have risen. While this is positive for the economy and owners of real estate, it has created a challenge for those of us looking to find and purchase “good deals” on rental investments.
Would you believe me if I told you there is a secret supply of off-market, tenant-occupied, financially-performing rental homes in your community? And that you can access this supply without having to spend any marketing money? As a matter of fact, with a simple phone call you can have access to this pool of rental properties. All you have to do is call your local property management company.
I run a property management firm in Denver, and we manage hundreds of rental properties. Most of them are owned by small investors who own one to three properties. At any given time, we have dozens of investor clients who would be interested in selling their tenant-occupied property, if only they could find a buyer. But they believe they can’t sell because it is tenant-occupied, has outstanding repairs that need to be made, and they don’t have the money to fix everything. They just want out. If only they could find a buyer. Get the picture?
If you are looking to buy a rental property, I suggest you Google the phone number of every property management company in the area. Start by calling those property management companies that do not sell real estate (which should be around 50 percent). Your conversation should sound something like this:
You: “Hi, my name is Marc Cunningham and I am a local real estate investor. I’m looking to buy a rental property and have it managed. Can you tell me a little bit about your property management services?”
Them: They tell you all about their services, what they do, why you should hire them…
You: “That sounds very interesting. The biggest challenge I have right now is finding the right home to buy. Does your company help investors like me buy rental properties?”
Them: If they do: “Yes. We can help you do that.”
If they don’t: “No, but we can refer you to a local real estate agent.”
You: “What I would really like to do is buy a property that is already tenant-occupied. You said that you manage X rental homes. Do you think any of your current clients would be interested in selling their rental property to me?”
Them: Awkward pause while they connect the dots and consider the fact that they could facilitate a sale for a current client, make some money in the process and hopefully retain management of the property with you as the new owner.
You: “I would even consider properties that may have some deferred maintenance if I could get a good deal on it.”
Them: No response as they think through their current client list and recall recent conversations from owners who said something like, ‘I can’t wait to sell this rental property!’ or ‘Don’t renew the tenant lease agreement this year because I want to sell.’”
You: “May I leave you my contact information and have you call me if you come across a deal for me?”
This is truly a win-win-win.
The seller wins because they have a tenant-occupied property they just want to unload.
The property management company wins because they are helping the owner sell the property, maybe make a commission from the sale, and hopefully retain the management of the property with you as the new owner.
You win because you are able to purchase an off-market deal, at a good price, with property management already in place.
If you make this call to five local property management companies, you will have at least a few potential deals to consider, and have property management contacts in place for future deals.