If you’ve ever purchased a property, whether as a primary residence or investment, then you know it’s rarely a straightforward process. Between bidding wars, buyer negotiations, financing, and closing it can be a complicated and often long process — which is exactly what you don’t want when you’re purchasing an investment property. Ideally, you’re looking for a killer deal with minimal competition and a quick close so you can start making money right away. Now, you may be thinking that finding such a property is about as likely as running into Big Foot on a hike, and in a way you’d be correct. Much like the mythical sasquatch, these properties only exist in the shadows, so the chances of you finding one scrolling through your local MLS listings are pretty slim. Instead, you’ll have to look off-market and for that you’ll need to tap into the lucrative and exclusive network of a reputable fund management company.
What exactly does off-market mean?
As the name suggests, an off-market property is any piece of real estate that is listed for sale privately rather than on a public listing website. While you may be thinking an off-market sale would be disadvantageous to the seller, there are actually several benefits. Selling a property off-market allows those involved to maintain their privacy, avoid multiple showings, limit the disruption to existing tenants, and close the deal out quicker. But enough about the sellers, let’s take a look at how securing an off-market asset benefits you as the buyer/investor.
Competitive Advantage: When it comes to investing, we’re constantly looking for a competitive advantage. Although the purchase price is always top-of-mind, timing can be even more important. Working with a fund management company that can secure assets off-market allows you to get in at the ground level and achieve the highest yields possible.
Value for Money: Since the property is not listed publicly, the number of people aware of the sale is drastically reduced. Without an entire market to compete with, we can often secure an off-market asset for below market value and improve our projected ROI for our investors. This is something that typically isn’t possible with traditional listings and is a massive benefit for investors. When you’re able to secure an asset off-market for below market value, your investment is already in the green. So, from the get-go you are able to minimize your risk and maximize your profit potential — which at the end of the day is what investing is all about.
Flexible Negotiations: When you carry out business transactions with someone you know and trust, the negotiations are often easier and more beneficial for everyone involved. This is why the negotiations for off-market deals tend to be more flexible. Just imagine the difference in your own negotiation tactics when dealing with a stranger versus a colleague or friend. If you’re like most people, you’re probably going to give preferential treatment to your friend/colleague. It all comes down to the simple fact that people want to do business with people they trust and you can’t establish that without investing in your relationships first.
Why Relationships Matter When It Comes to Securing Off-Market Assets
As we’ve touched on briefly, gaining access to off-market properties comes down to who you know. Working with a fund management company that recognizes the importance of curating and maintaining industry relationships will always give you a competitive advantage over those that don’t. At Blue Ridge, our reputation for straightforward business and extensive relationships with builders and developers ensures we are top of mind when an opportunity arises. Because of this, we are able to secure and purchase 85% of our deals off-market, achieve superior risk-adjusted returns for our investors, and maintain our position as an industry leader.
After working in this industry for decades, I can confidently tell you that your relationships and reputation will always get you further than you’d get on your own. So while this industry may have a reputation for being cut-throat, sticking to your word and taking the time to get to know those you work with will always pay off in the long run — and that’s exactly how we do business here at Blue Ridge.
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