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9 Ways to Find Off-Market Investment Properties to Rent Out

9 Ways to Find Off-Market Investment Properties to Rent Out9 Ways to Find Off-Market Investment Properties to Rent Out

Summary

Often despite rules and regulations, many investment properties sold every year are never listed in an MLS. Off-market property sales like these offer various benefits, including less competition for buyers and investors who know how to negotiate and where to look. Purchasing off-market can also make your new rental property more profitable, sooner.

While a Multiple Listing Service (MLS) is a comprehensive resource for many types of properties, it does not list every property for sale on the market. Many properties change hands each month without ever hitting the MLS. One of these off-market properties for sale (also known as "pocket" listings) could be your next high-earning rental property. Real estate agents can be a good source for off-market rental properties, but there are other ways to find them.

What is off-market real estate?

Off-market means a property is for sale, and the homeowner or listing broker has NOT submitted it to the MLS or other listing services. Real estate agents sometimes hold property from being submitted because they have a buyer in mind or know someone in their network who has the perfect buyer. 

For an off-market property, word of mouth is the only way an investor or home buyer will learn about the property—via the seller, broker, or the broker's network. According to the National Association of Realtors (NAR), 11% of all properties sold were sold off-market from 2021-2022.

How can you find off-market investment rental properties? 

1) Contact real estate agents

Real estate agents do most of their work with active properties on the MLS, but they also know how to find off-market deals. Agents have inside information about which properties are just about to go on the market because they have a network inside their brokerage. To improve your chance of finding an off-market deal, contact a Realtor® who is familiar with the local market and other top real estate agents in the area. 

2) Research online resources

Websites like Zillow, RentSpree and Realtor.com primarily feature properties listed on the MLS but can still help you find the occasional off-market deals. Zillow allows sellers to list a property 30 days before it hits the MLS. Keep an eye on these sites to find off-market deals. Also, watch for listings about to expire, as the owners may be willing to negotiate directly with the buyer since the house did not sell while listed. 

RentSpree allows you to manually create a listing page or connect to your MLS and opt-in to import listings automatically*. Syndicate listings to other listing sites* or share a direct link with your network and clients. In addition, agents can showcase listings on their agent profile, gather applications directly from the listing page, and manage the entire lead generation cycle. RentSpree's comprehensive feature set does all the hard work, so you don't have to.

Rent Estimate

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3) Build your network

A current network of real estate professionals and property investors can be a goldmine for off-market leads. Develop your network by attending real estate events in your area and joining local real estate investment associations (REIAs.) Check community bulletin boards, for example at the grocery store or post office, as well as Facebook groups to see who is meeting in your area. 

Beyond real estate professionals, be open with friends, family, co-workers, and neighbors about what you're looking for in a rental property. Consider offering a referral fee if their connection leads to a successful transaction. 

4) Stay in touch with builders and contractors

Local builders and contractors are often "in the know" about off-market properties. They will know about projects stalled or abandoned due to a lack of funds. Projects like these make great opportunities for a handy investor to purchase, complete the work and then sell or manage it as a rental property.

5) Look for property wholesalers

Wholesalers specialize in finding off-market deals and selling them to investors. Keep in mind that the wholesaler will build their profit margin into the sale price, so their "deal" will likely cost more than it would if you worked with the seller directly.

6) Review public records

By law, notices about pre-foreclosure properties, short sales, and properties in foreclosure must appear online and in local newspapers. Watch that section of the paper, and visit the county's tax records to look for such properties and approach the owner directly.

Another good public source is the Department of Housing and Urban Development (HUD). On HUD's website, under the tab "HUD Home Store," properties may be listed for sale. While these are not technically off-market deals, as they are more than likely also on the MLS, it is a good place to watch for expired listings and foreclosures that may be coming to auction.

7) Use direct mail

Send a targeted letter or postcard to owners of properties that catch your eye, and ask them to contact you if they want to discuss a possible sale, now or at some point in the future. You might pique the owner's interest—and a potential deal. In addition, the county's tax website and other online sites like whitepages.com can provide addresses and contact information for the current owners.

8) Preview and attend real estate auctions

Real estate auctions can be a good source of off-market deals for investors. To find auction properties, browse auction websites like RealtyTrac or auction.com for potential deals. 

Make a list of potential properties and start your due diligence on the condition, price, and potential cash flow for each one as a rental property. This will give you a bidding range and help you stay within your budget. (A word of caution about auctions: keep a level head and your numbers handy, so you don't get drawn into a bidding war, or you could end up paying too much.)

9) Drive around for dollars

Driving around various neighborhoods can lead you to off-market properties. Look for signs of a distressed or vacant property: 

  • Overgrown landscaping
  • Scattered items in the yard
  • Broken windows
  • Peeling or missing shingles, or other signs of deferred maintenance
  • A foreclosure sticker on the door 

Note addresses and head back to your computer to start your property research. You can use the county tax records to find the owner; the status of the home may appear on Zillow or Trulia. With this information, you can reach out to the owner to ask for a meeting to discuss the property. 

If you stay engaged with these strategies to find off-market properties, you'll improve your chances of buying a rental property at an attractive price where you're likely to earn a good profit. 

How the MLS Clear Cooperation Policy affects off-market deals

In 2019, the NAR enacted the MLS Statement 8.0 Clear Cooperation Policy to help regulate off-market properties and ensure they list them on the MLS. The policy requires real estate brokers and agents to submit all listings to the MLS within one day of publicly marketing the property. Public marketing means public-facing yard signs, flyers, websites, digital communications, and other platforms that all potential buyers can access.

This policy does not necessarily mean the end of off-market rental properties. Real estate brokers and agents are still allowed to create office-exclusive listings or limited listings to protect seller privacy. In these cases, the agent can choose who can see the official MLS listing. 

Off-market property sales can benefit knowledgeable buyers and investors who are willing to do their homework—such deals typically involve less competition from the general public and the chance to be more flexible when negotiating.

Cap Rate Calculator

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How to use

Enter information in the boxes below to calculate the comparative value of a piece of property in order to determine if it would be a good investment for you.

Property Value

Current market price or listed value
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Yearly earnings

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Total A:

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Yearly Expenses

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$
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$
$
$
Total B:

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Cap rate

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%

Cap rate

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Commission Calculator

How to use

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Total Commission

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Commission for Each Agent

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Rent to Income Ratio Calculator

How to use

Enter information in the boxes below to calculate the comparative value of a piece of property in order to determine if it would be a good investment for you.

Rent-to-Income Ratio Calculator

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Rent-to-Income Ratio:

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Move-in Move-out Calculators

Move-In Calculator

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Move-out Calculator

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