Real Estate Riches by Dolf de Roos

Author:Dolf de Roos
Language: eng
Format: epub
Publisher: Wiley
Published: 2012-06-11T16:00:00+00:00

Off-Market Sales

So far in considering how to find properties, we have only considered those advertised in newspapers or real estate magazines, and those listed through real estate agents. There is another category altogether, namely properties where the owners do not even know they want to sell.

The presence of a “For Sale” sign on a property is a clear indication that the owners want to sell. However, the absence of such a sign does not necessarily indicate that they do not want to sell. There is only one way to find out: Knock on the door and ask.

I am not suggesting you go up and down every street asking all the property owners if they want to sell. You would waste a lot of time and make a general nuisance of yourself. However, if you have identified a property as being particularly well suited to your needs (meaning the needs of a potential or prospective tenant), then there is no law against you asking the current owner if he would consider selling. In particular, if the value of the property to you is a lot more than the value to the present owner, then it could well be a win-win situation.

For example, you may own a property that has a large backyard, but you cannot drive a car down between the house and the boundary fence. By buying the property next door, and creating a right-of-way or easement, you may gain car access to the rear of both properties.

Similarly, right now I am looking at a commercial building in downtown Phoenix. It is a beautiful art deco building with a historic places designation on it (meaning tax breaks for anyone renovating it). One concept is to turn it into condominium apartments, but the downside is that there would not be sufficient parking. So I am looking at the building next door. It is an old building, in a terrible state of repair, and is used as a transients’ hotel. It will probably not be there much longer. As a hotel, it has limited value. However, as the site for a potential parking garage for the condominiums next door, it has great value. Therefore, the potential value to me may be much more than the value to the current owners. There is no “For Sale” sign on it, but I would be foolish to limit my search to those buildings that are officially on the market.

Does this mean that every property owner I approach with an offer welcomes the offer with open arms? Of course not! I am rejected more often than not. But the few times you are welcomed makes all the rejections worthwhile.

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