As a real estate investor, competition when acquiring a new property is never really a great thing. It might be reassuring that other investors are keen on the same property as you, but generally you will end up paying more in a competitive bidding environment. As off-market properties are sought after in both buyer’s and seller’s markets, you have to ask yourself: How do I manufacture these opportunities?
Whether you are buying your first home or investment property or you are a seasoned commercial investor seeking a trophy building, this scenario is often the same. Common thinking is that building relationships is the best way to uncover opportunities when purchasing real estate. But there’s another method that I have watched work time and time again: Leveraging your acquisition criteria.
The MLS and commercial real estate marketplaces are both engineered to give buyers visibility into the available inventory on the market. What I’d like to show you is how to reverse engineer this and show sellers what you are looking for by marketing your acquisition criteria. You’d be surprised what you might find.
Step 1: Structure your criteria in an easy-to-read format.
Include your target price, price per square foot range, location and other characteristics you’re searching for in a property. Also make sure to define your investing or homebuying strategy so that brokers and agents can understand your needs.
Step 2: Build a list of agents and brokers.
Identify the best agents and brokers who specialize in your target property type and location. Often investors look to tell their buyer’s agent about their criteria and hope the agent can source a good opportunity. However, I find it more effective to cast a wider net. Building a list of the best agents and brokers doesn’t mean you are going behind your agent’s back — you can of course still work with them in the transaction. It just guarantees you are going to have a lot of professionals looking for the right property for you.
Step 3: Broadcast your criteria.
Send out an email to your target brokers and agents, and even add in some property owners you are connected with. Make people aware of what you are looking for by introducing your criteria to the top brokers in your market.
Step 4: Field and review the available offerings.
I think you will be pleasantly surprised by the opportunities that are presented to you after taking the first three steps. In the process, you will also be strengthening your real estate network and letting people know what types of properties might be a good fit for you, opening the doors for future investment deals and inviting opportunities to come to you.
Reverse engineering how information is presented in a market can generate surprising results. Using your demand can build momentum behind your sourcing efforts. The next time you are looking for an investment property or the perfect home, think about widening your reach and letting the brokers and agents know your acquisition criteria. They will qualify you as a legitimate buyer, and the deals will soon come to you.