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Whether you’re an experienced Canadian real estate investor or just starting to dip your toe into researching your first deal, the way that you find the deals you want to explore is a critical part of the process. A lot of real estate investors tend to rely on what are called multiple listing services, or MLS. These are aggregated portals that allow investors to view properties that have entered the market.
They offer wonderful visibility of properties to all investors, but this ironically also their biggest drawback. It’s next to impossible if you’re using MLS, to find a property that’s a real inside scoop. Every investor across Canada is seeing the same thing, so it’s within your best interest to pursue multiple avenues in addition to MLS.
But first, if you are trying to complete a private real estate deal, you need to talk to a mortgage expert about your financing options. After all some lenders will not lend against a property that does not have an MLS Listing. So, to discuss your options for private real estate purchases, click the link below for a free strategy call today.
What are private real estate deals?
Private real estate deals represent a way to bypass the activity and competitive fire of MLS sites and go right to the heart of a deal. They are also known as “pocket” listings in some circles, and they represent a true inside track for those who are willing to do the legwork to gain access to them. These are properties that are for sale or rent but are not listed on public MLS sites where everyone can view and access them. They will typically be passed around via word of mouth among brokers and investors across their respective areas and beyond, and will usually just entertain a small group of prospective buyers.
What are the pitfalls of private real estate deals?
Private real estate listings are not always popular with real estate agents since they can be seen as bypassing the system and giving unfair advantages to some clients (and their agents) over others. In the United States, this has progressed to the point where some professional groups of realtors are willing to impose fines and other disciplines on members who participate in private real estate listings. To our knowledge, this has not extended to Canada, but it’s worth keeping in mind as you navigate a space that’s not always popular with real estate agents and investors across the country.
FSBO (for sale by owner)
Another interpretation of what a private real estate deal truly is consists of a home’s owner selling the structure themselves and reaping all the benefits of such a decision. Typically, this means that the owner has had to undergo training and certification of their own, and once they’ve completed this, they are free to act as a real estate professional on their behalf.
FSBO deals can be tricky because usually, it all depends on the person who is selling the house and their unique personality. You might find someone interested in getting every single last penny that they can, for example, and that can make finding the right balance of a deal difficult. Or you might find someone in a historic home that’s full of character, and they will subsequently want to make sure that any person who takes over is willing and ready to preserve this charm.
Where to find FSBO listings
FSBO listings are pretty simple to find in Canada. For starters, there are several websites dedicated to finding and aggregating these special types of listings. They are relatively easy to find through simple internet searches and serve as a wealth of information on these sales that can give you the inside track on properties where deals can potentially be struck. Additionally, word of mouth is a great way to find out about these types of transactions. People are always hearing different bits of information about who is looking into listing their home or who is looking into buying rental properties, so be sure to keep your ears and eyes open.
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Build and work your network
One of the best ways to learn about these word of mouth exchanges of information is by leaning heavily on your network. This does not have to be an especially formal or uncomfortable thing – it can go a long way at the next cookout or party to casually ask your friends or family if they’ve heard anything about anyone listing real estate.
It can also help to ask them to introduce you to more and more people – the more seeds that you plant in this manner, the higher the likelihood that you can eventually reap a harvest of a great deal that you might not have otherwise learned about if you hadn’t been so intent on working through your proverbial Rolodex. Don’t be shy about networking – most real estate investors are always chatting about these types of things with their friends, family and colleagues.
Get in touch with real estate agents
Similarly, you should be meeting and greeting as many real estate professionals as you can find. They are still a critical part of many private real estate transactions, so it’s a great idea to have as many of their numbers in your phone as possible. They will be the ones getting in touch with you if they have a client with a private listing in mind, so you should be at the front of their minds when they’re sending out an email or text with the next hot property.
Real estate professionals still do marketing blasts for private listings, but they’re not like the ones in print and online that you’re used to. They’re more targeted and are much more likely to be geared towards those who are most inclined to buy.
Finding a private real estate listing can be a real boon to any real estate investor’s career. It’s a chance to perhaps find a great deal, but also a chance to find an exclusive property that most of the public might not even know is on the market. This means that they can be a good chance to build value and exclusivity in your portfolio, so be sure to mine your connections and keep your ears and eyes open at all times.
Once again, if you are trying to complete a private real estate deal, you need to talk to a mortgage expert about your financing options. After all some lenders will not lend against a property that does not have an MLS Listing. So, to discuss your options for private real estate purchases, click the link below for a free strategy call today.