Epic Real Estate Investing - Finding Off-Market Deals and Creatively Financing Them | 1177

Episode Date: February 3, 2022

In today's show, Matt has 3 segments for you! First, he shares how he curved his real estate career using CREATIVE FINANCING and reveals the different types of it. Moving forward, he interviews an REA student explaining how he cashed out A HALF MILLION CHECK in a refinance of all the properties that he has been able to acquire while being an Epic student. Finally, Mr. Theriault explains what is an off-market deal and breaks down the most popular ways of finding them, so YOU too can BUY REAL ESTATE AT A DEEP DISCOUNT! BUT THAT’S NOT ALL! Just for people looking to do their first or their next deal, Matt has put together a simple FREE TRAINING that will help them do exactly that! Tune in and find out how to apply for this FREE course! Alright, are you ready for the show? Let's go! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terio Media. All righty on today's show, I've got three segments for you. First, we're going to talk about how I was able to create a career using creative financing almost exclusively and the different types of creative financing. And then I'll run through my favorite ways of how I did it. And then second, I've got an RIA student who's joining us today who just cashed out a half a million dollar check in a refi of all. all the properties that he's been able to acquire while being an epic student. And he's going to join us today and explain how he was able to do that. And then third, I'm going to define off market for you, meaning what is an off market deal?

And then most importantly, the most popular ways of finding them so you two can buy real estate at a deep discount. Oh, and then as a bonus, just today, just for people looking to do their first or their next deal, I just put together a simple free training that'll help you do that. And if that's something that's up your alley, something that you want to dive deeper into, you can find that at matsfreetraining.com. Matt's free training.com. All righty, ready for the show? Let's go.

Welcome to the all-new, epic real estate investing show. The longest running real estate investing podcast on the interwebs, your source for housing market updates, creative investing strategies, and everything else you need to retire early. Some audio may be pulled from our weekly videos and may require visual support. To get the full premium experience, check out Epic Real Estate's YouTube channel, EpicR-EI.TV. If you want to make money in real estate, sit tight and stay tuned. If you want to go far, share this with a friend. If you want to go fast, go to R-E-I-Aase.com.

Here's Matt. So I've built a career around using creative financing to buy a house. And today I'm going to show you exactly how you can do it as well so you can take your real estate investing to a whole next level. If you're looking for a way to buy houses without using credit, without using money, I've got four very creative ways that you can use very simply right now in your market. So first I'm going to show you different ways of how you can approach creative financing. And then I'm going to show you different ways of how to find distressed properties and really unpacking. the goal that can be found there. And then I'm going to show you all the different ways of how you can find the money to finance your real estate in a very, very creative creative way. And then I'll go ahead and I'll wrap up with all of my favorite ways of how I have built my entire portfolio using creative financing strategies. All right, so the first way, probably the most commonly used way is seller financing. And this is when you go out shopping for a home and you're ready to present your offer. So the traditional way would be to just present the price and then you go find the money somewhere and that's kind of how a traditional transaction. ends up. But this way, you're not going to be going that traditional route of going to a bank.

What you're going to be doing is asking the seller to carry back the financing. Really, it's kind of like an IOU to the seller. You probably give them a small little down payment, and then you'll make payments over time. And this works exactly the same way a traditional transaction would work. But instead of sending your payments to the bank, you'd be sending your payments to the seller. So a second way to creatively finance your deals is to purchase a property how they call subject to. This is where you're buying the property from the seller subject to the existing financing. So how this works is, when you purchase the property, we're assuming that the seller already has a mortgage in place, what we're going to do is we're going to leave that mortgage there.

You're going to take over the payments and the maintenance on the property, and then you'll go ahead and make those payments on behalf of the seller, but you officially will become the owner. And to a lot of people when they first hear this, it sounds a little far-fetched to them. But this is very doable, but there are some nuances to it. There's some specific things you've got to do to stay out of trouble. So the creative financing strategy number three, or the third way that you can go about this, is by either hard money or private money. And I'm going to start with hard money.

Hard money are unconventional lenders, typically private money lenders that have made a business out of it. And you can find them really simply with a Google search. You can just type in hard money and then put your city, and you're going to get pages and pages and pages of them. So that's how you can access them. But just keep in mind, it's going to be probably more flexible. to negotiate those price in terms than it would be with a bank, but not as much as you would have with private money. It'll probably be a little bit more expensive with hard money as well. Now, private money, now this is something that everybody strives for.

Everybody is always fascinated with private money and how do you find private money? And everybody wants to know where to go to get this. And I think the big mistake that people make is they think private money is out there sitting there waiting for them in some building or some secret meeting. If you looked at it for what it actually is, relationship money, it becomes so much easier to find. And I mean, it could be your friends, it could be your family, it could be your associates, your coworkers, or your friends of friends. It's relationships. And it's much easier to raise private money and find private money to fund your deals if you put those relationships in place first.

The big mistake people make is they always try to create those relationships after they have the deal. And then what they do is they show up to their friends and their family looking like they're begging and they're desperate and they're ready to borrow money. But you really want to approach these relationships up front. So that way, when a deal comes up, it looks more like you're offering them an opportunity rather than asking for money. And one little note about private money and really goes with hard money and perhaps even financial institution money as well, is that you really want to make sure that you follow through. You want to make sure that you perform. Because that one failed deal, particularly if it's your first time out, that's probably your last time

you're ever going to get money from that source. And as with the other two creative strategies I already gave you for this one as well. I walk you through step by step on how I have personally raised millions and millions of dollars of private money without feeling weird, without feeling awkward. All right, so creative strategy number four, it's really a combination of all the others. One thing about creative financing and the reason that they call it creative financing is that you're only limited by your own creativity. And if you can combine multiple approaches, you can put a lot more deals together for yourself than you otherwise could. Like, for example, If you found a seller that had a mortgage in place and they agreed for you to take over the payments and take over the maintenance on the property,

you could add seller financing to that to kind of bridge the gap between where their mortgage is and what the value of the property is. Another way you could do that is if you found a seller that was willing to carry back the entire balance, they just wanted a small little down payment. What you could do is you could go access hard money or you could go access private money. And yes, like a credit card. They call it creative financing. There is no limit to it. And using all of these creative strategies, this is exactly how I got started because I started as a real estate agent.

And I had a couple clients that were real estate investors. And I was really infatuated with how they were doing their things. And they had more time off. And I was stuck working on the weekends. And I really got to compare the difference between the commission I was making as a real estate agent and the profits that they were making as a real estate investor. So I wanted to make this transition from full-time real estate agent to full-time real estate investor. And maybe that's the same type of situation that you're in. You're trying to make this transition from full-time something else to full-time real estate investor.

But I had a problem. And maybe you could relate to this as well, is I didn't have a whole lot of money. I was under the impression that you needed a lot of money to actually invest in real estate. And I had heard about creative financing, but I was really under the belief that why would anyone ever do that? Why would a seller ever entertain that? I'd come from the real estate agent world and everybody just sold their house for full market value. I was like, why doesn't everybody do that? But I wanted to give it a try anyway.

So my plan was, I'm just going to go and share this with everybody that I know. This is what I plan on doing. But I wasn't going to be deterred. I wanted to give it a shot. I wanted to go investigate and see how this actual creative financing world works. So my plan was to share this with everybody that I knew, friends, family, and see if anybody would actually loan me the money to help me get started. But then I ran into another problem.

It turned out that nobody really trusted me because I had never really done it before. I didn't have the experience. and they were like, check back with me when you get a few under your belt. And for the few that actually did entertain the idea, I didn't have answers to their really important questions. They wanted to know how much they were getting back, when they were getting it back. They wanted to know how they were protected if I failed and they didn't get it back.

So it turned out that I was really the risky element in the whole transaction. What I needed was a deal. I needed a good deal, control of a good deal that added validity and kind of removed some of the risk of it being just me. So to get control of the deal, I had to put it under contract, which was a little bit scary at first, but there is a clause in every single contract. It's called a contingency. If you can't find the financing, then you could go ahead and cancel the contract.

And I really thought that was my golden ticket. So that's exactly what I did. I went out and just started making offers. And when I got one accepted, I went now and started calculating what the actual exit strategy would be, how much it would cost to execute that exit strategy, and then how much that would be left over for profit. Now I knew exactly how much I would be able to share with my private money people. And it turned out that this was a really good plan because it was only the second person that I shared this with that said, I'm in.

So the big epiphany here was I didn't need money to make offers. I just had to make offers, get them under contract, and then I could evaluate the deal. The second thing that I discovered was it was much easier to find the money after I found the deal first. And that lesson served me really well for the rest of my career because that's how I conduct all of my transactions and I've never looked back. And here we are thousands and thousands of transactions. later. And now I teach, this is what I'm sharing with you. And if you'd like to get started for free, go ahead and take a look at what I put together for you over at epic breakthrough.com. What you'll find there are the exact cheat sheets that I give to my private clients. You can have those for free

and they'll get you started on your road to creative financing. We'll be back with more right after this. Boarding for flight 246 to Toronto is delayed 50 minutes. Ugh, what? Sounds like Ojo time. Play Ojo. Great idea. Feel the fun with all the latest slots in live casino games and with no wagering requirements. What you win is yours to keep groovy. Hey, I won! Feel the fun. The morning will begin when passenger Fisher is done celebrating.

19 plus Ontario only. Please play responsibly. Concern by your gambling or that if someone close you, call 186653310 or visitcomexonterio.ca. From coast to coast, epic investors are doing the most. It's time for another epic field report. Today, we're going to talk about this right here. This is a $500,000 check that an RIA student just earned. And we're going to go over in detail on how he did it, just so you can essentially copy what he did.

You got our permission to steal it and go out and use it in your market and get one of these big checks for yourself, all right? Let's hop right into the show. I'm excited to have this conversation day. I'm excited for you to listen in on it as well. So please help me welcome to the show, Epic RIA student, Mr. Ryan, Mirzma. Ryan, welcome to the show. Hey, Matt. Thanks for having me. You bet. Good to have you back. Haven't been able to talk to you in a while and I'm looking forward to catching up. Yeah, I was just thinking it's been about three and a half years now since we started. Emily and I did and

got started. That's super. Before we talk about this photo here of this monster of a check that you sent to me, let's back up just a little bit. What were you looking to accomplish the first time, What were you looking to accomplish just right when we met each other? What was challenging? What were you looking to overcome? It was six at the time, I think, but seven kids. And I've been in the corporate world my whole career and got to a point where I realized I just don't really have a retirement plan that I'm remotely comfortable with.

And so my brother started getting into real estate investing and telling me a bit about it. And so I spent a bunch of time studying up, trying to figure out. out, you know, how it all worked. And that was probably close to a year and a half I did before I really jumped in and bought my first rental property. Did that and basically used all of our savings to do that and did it all myself, you know, as far as the finding the tenants and some small repairs and stuff. And it worked. We got it rented and it cash flowed. But I realized I had no way to to scale up at that point. I knew there was something missing. And so that summer, I stumbled upon epic real estate and got talking to you, and that's when we signed up. Perfect. So what would it

have meant to you, I guess, professionally to have actually found that missing thing to be able to scale up your business? It meant everything, right? So it went from having one rental property, you know, that I may be able to scale up to a handful by the time I reached retirement age with my career. It went, you know, I meant going from that to, you know, that would supplement, supplement my retirement income maybe by a little bit. Now I'm, what, three years in and getting close to retirement. Very close. Right. And you're how old? Almost 39, so 30.

39. Yeah. Well, that's retiring early. Yeah, definitely. Definitely. The goal is by the time I'm 40 to be able to do that. And I'm on a point where I could leave now is just, is it the wisest thing, right? And so we're having a lot of conversations about timing and what that looks like. So what does that mean to you then personally now that you're being able to actually reach this goal and retire when you're 40? My time will be freed up, right? So as I was saying, I have seven kids who are all. at home and we homeschool and I'd really like to do a lot with them. I'd like to be able to participate

more in teaching them and spending time with them doing all sorts of fun things, but also things that are developing skills. I'd like to get them more involved in real estate investing and learning skills through that. We have a little kind of a mini family farm. We've started raising some animals and doing a little bit more of that. The kids want to, you know, we're going to start teaching them how to ski this winter and actually being able to spend time doing that. That's really tough to do right now. Just today, the kids watch some video on making maple syrup, and they came all excited. They want to make maple syrup this spring.

And I'd like to do that with them. But again, everything takes time. For sure. Super. So, you know, I dug in, so we've been working together about three and a half years now. and I dug into the archives, it says summary of your first full year investing, although still doing this on the side while I maintain your full-time job.

And I want to talk about that too, how you've been able to manage the full-time job and make this transition. So you hired a W-9 acquisition specialist who apprenticed you the majority of the year but didn't end up working out, okay? Hired a marketing firm to manage your pay-per-click advertising on Google. You explore different marketing strategies.

you developed relationships in the community and expanded your team. 19 transactions completed in the first year, so very respectable. No silver bullet with regards to marketing style. Some deals came through paper, others through text and direct mail. Increased your passive income by $3,200 a month, and your net worth increased by $500,000. So those are the stats. Very well done.

So you broke it down here, gave me a lot of great detail. this about you. The passive income, one, you added five rental units to two, two bucks, duplexed, one single family rental to your portfolio. Portfolio has a tough word for some reason. Established or estimated $1,75 a month and extra monthly cash flow. Number two, you bought a single family home needing renovations for $40,000 and sold it on a land contract for 90,000 with $6,000 down and $1,000 a month for 16 years without doing any repairs. So that's nice. The buyer is already moving or improving the property. So I would benefit if I had. to repossess and sell again, super.

Bought a single family home on 10 plus acres that needed complete overhaul and sold on land contract purchase price is $39,000, $42,000 from a friend at 8% interest for the purchase. I sold the property for $92,000 with a $30,000 down payment and $800 a month for 10 years. So there's your passive income place, your active income place. Bought and sold a house on land contract where you made your investment back plus a few grand and then the buyers owe you another $15,000 within 12 months. wholesale four properties for 60,000 and assignment fees between flipping and just plain old buying low and selling higher turned four properties for profit for 90,000. Two flips were underway at the end of 2020.

One is now listed in an estimated profit will be 40,000. I bought the other with the creative financing and plan to list that flip next week for an estimated 20,000 of profit and acquired two additional properties at really low prices that are still waiting for you to either do the burr or flip method. So very respectable, particularly for a year that we're all plagued with a pandemic. And so do you remember doing all of those deals? Yeah. Yeah, I remember it. Yeah, I was just thinking back and trying to think of when I sent that message to you. Yeah, I was surprised that that year ended up going quite well.

You know, I didn't necessarily have all of the restrictions. You know, I was able to drive around and go look at houses and nothing was preventing me from doing that. and, you know, in general, life slowed down that year. And so I tried to use that as an opportunity. Super. So you sent that on February 25th. So it was almost exactly a year ago. Yep.

Great. So bringing up to speed. What happened in 2021? What did business look like? Yeah, another good year. After 2020, Emily mentioned to me, hey, you know, how many of these properties are you keeping and adding to your portfolio? Can we, you know, focus on that more?

and it was a good point. And so we've been trying to add more to our portfolio this year. And because of all the different ways that we finance things, I was able to do a portfolio refinance that closed a few weeks ago. Doing the flipping and buying and renovating and holding properties, I never had any of these properties appraised. And so it was always based on, well, what do you think that these are worth, right? And so I had an idea on paper.

And then when I went and did that transaction, you know, the valuation across the board was higher. And so I was able to, the properties that were included there, you know, valued at, I can't remember, like $1.8 million or something. And I was able to pull a bunch of equity back out. And now that's money that, you know, we can redeploy to continue to build our, portfolio at an accelerated pace. So I think I mentioned to you, Matt, the other day, I've got seven-unit apartment complex now under contract. So that'll add, you know, a good amount of cash flow as well.

Let's back up just a little bit. What is a cash out refinance? Walk us through it of what the process was. You went out and you acquired a bunch of properties, right? Yep. And you bought a bunch of them at a discount. So they already had equity in place. So when you buy a house, right? I mean, if you use a bank for that purchase, they're going to give you 75 or 80% of the purchase price as a loan. But if you then add value to that property, or even if you didn't do anything to the property, but you actually bought it for a discount, the bank doesn't recognize that when you buy it. So you have to go through a seasoning period, which is usually six months. And after that point, a bank will,

finance it based on its appraised value. And so more than six months had gone by, you know, for those, for those properties. And so I worked with the bank and they went out and had each of them appraised. And based on the appraised value, they were able to give me, you know, it was about 70% loan to value on the entire portfolio. And because based on the appraised value, I had more than, I was probably two-thirds of it was equity. I was able to get a lot of that equity back at the closing table. Right. And that's what this check is, right?

That's what that check is. Yeah. Perfect. So you bought the properties with equity in them. You fixed some of them up and increased equity. And then we just went through basically two years of unprecedented appreciation. Maybe I'm not unprecedented, but it certainly worked at the timing worked in your favor. It did.

Yeah. Right? So we built equity in three different ways. You pulled this cash out. And what's really nice about this, this is a half a million dollar check. And it's all tax free because it's a loan. And the bank, or excuse me, the IRS does not tax, borrowed money. And so now we've got this giant chunk of cash that we get to redeploy.

And then without selling all the assets, without experiencing any capital gains. And I imagine you refinanced in a way that all of those properties are still cash flowing. Is that accurate? They're still cash flowing. Yeah. And, you know, when you refinance and pull equity out, that usually means that your payment is going to go up. So overall, it did go up a little bit, but all the properties still cash flow. And so, yeah, now that money can help me buy more cash flow.

Super. Do you have leases coming up anytime soon? Yeah. I mean, they're all spread out throughout, you know, throughout the year. A lot of landlords don't recognize us that they were so distracted by watching their properties appreciate that nationally rents went up like 20s. And that is like something that we haven't experienced in a really long time as landlords. Not anything significant like that. You know, each time you roll over a tenant, maybe you got, maybe you can add an extra 25, 50 bucks.

But, you know, gosh, right here in Las Vegas, rents went up 43%. And so we can't wait until our leases expire. Yeah, rents didn't go up that much here. But, yeah, certainly, you know, at least 10%, sometimes more depending on the property. Super. Let me know. And you kind of touched on a little bit. Let's just kind of wrap it up. What does the future look like for you right now? So the future looks like continuing to increase our passive income. One of my goals has been to leave my career job. I don't want to get myself in trouble here. Sometime before I'm 65, probably quite a bit before then. So we're getting very close to being able to do that. And that's where just talking to other people that I, know that are kind of in the same situation and just trying to think through all of the different

angles of what that looks like, you know, with my business and with my family and routines, you know, there's just a lot to think about. For sure. How are you imagining that's going to make you feel? Part of me is going to, I mean, I'm really excited about it. And part of me is, I'm just more of a cautious, I think, risk-averse person. And so probably a little bit nervous about making making a big jump like that. You know, I've been doing the same thing somewhat for my entire career. Awesome. Well, Ryan, congratulations.

Thanks for taking time out of your day here and sharing your story is very inspiring. And I know you were inspiring a lot of people real quickly. And I kind of passed up this question. I got a little distracted. But I know there's a lot of people out there looking to make this transition from corporate America to becoming full-time real estate investor and really kind of being in charge of their own finances and in charge of their schedule and their day. Any tips for them on people that are kind of challenged with time and got that full-time corporate job?

I mean, the beauty here is this is something that you can do on the side. I had a full-time job when we jumped into this with Matt and Epic. And I was at that time traveling most weeks. and you know you just you can do it you just need to learn how to leverage um leverage your downtime and you know build your team it doesn't need to meet that you hire people um but uh i think that's one of the big things that i've learned is you're leveraging other people's something for as much as possible right whether it's other people's money other people's time and resources, not taking advantage of them, but as part of your team and

your strategy, you know, in a way that benefits them and benefits you. And, you know, you can, you can do just about everything remote nowadays. And I know there are a lot of people that invest solely in markets where they don't live. I think, you know, I started out in the market where I live and that continues to be where I invest and I'm most comfortable. Yeah, certainly a doable thing. For sure. If you want it, then you go out and get it, right? Yeah, you get you. That's right, Mark. And one of the things, you know, you taught us right away is I remember using the sheet that you gave us to track your activities and are you doing consistently, are you doing the right things that are going to work, help you to actually produce results.

Right. I was actually just talking to a young investor. about that this past week that is wanting to get into investing. And, you know, you can keep yourself busy. You know, you can work on your website 24 hours a day if you want, but that's not going to help you to find an off-market deal. So you just got to focus on consistently doing those money-making activities. Perfect. Perfect. Well, again, Ryan, thanks for sharing and I appreciate you. I know I'm going to see you here in a month or so. I'm going to start mapping out what this transition looks like for you. And I'm looking forward to seeing you again and hanging out.

And I'll talk to you soon. Awesome. Well, thanks for having me. Thanks for sitting tight while we pay our light bill. We'll be back right after this. Canada can be a global leader in reducing the harm caused by smoking, but it requires actionable steps. Now is the time to modernize Canadian laws so that adult smokers have information and access to better alternatives.

By doing so, we can create lasting change. If you don't smoke, don't start. If you smoke, quit. If you don't quit, change. Visit unsmoked.ca. Good things may come to those who waits, but better things come to those who go out and get them. Let's get it.

Back to the show. In real estate, really simply put, off-market means the property is not listed on market for sale. But there's two different sort of context that you're going to want to pay attention to, of which could result into two distinct meanings. But first, let's talk about why you should even care. The reason off-market properties are important and something that you'd want to pay attention to is because you've got less competition there. When you actually find one, you might just have one or two other buyers that you're going to compete against, or maybe none

at all. Also, negotiations, they can become much more flexible, and essentially it really becomes in the buyer's favor. The power is a little bit more in your position. And first, As the buyer, you'll have an even greater hand if the seller is in some sort of distressed situation. The burden of the sale will typically fall into the seller's lap, and they have to kind of do what they can to appeal to the buyer. And as real estate investors, you know, when you go in and look at a property that's in a distressed situation, you know, you're there to help. You're there to do the seller a favor.

So it's really in the seller's best interest to try and convince you the buyer to buy the property as opposed to how most people will go about it where the buyer goes in trying to convince the seller to sell. And consequently, the seller will typically place fewer conditions on that sale. And all of these things can result into a signed contract that otherwise might not have happened had that property been on market. So if the buyer has a little bit of an advantage in purchasing an off-market property, why would the seller even choose to go this route? So, unless it's a luxury pocket listing type of transaction, the seller is probably not too interested in getting top dollar.

That may sound crazy, but there are things more important to people than getting top dollar, like the speed of the sale. They need to sell fast. Or the convenience of the sale. Maybe they don't want people coming through their house on the weekends and they don't want to go ahead and always have the house ready to show. Or what I find more times than not is sellers are more interested in the certainty of the sale. They actually want it to close.

and oftentimes that is more important to them than getting top dollar. Now, there are really just three reasons why a property would be considered off market. The first one is the seller might have previously had the property for sale and for one reason or another removed it from the market. And so they're no longer accepting or reviewing offers. If you've been shopping online like a Zillow or a Redfin or a Trulia, you may have seen a house here or there that said it was actually off market. Well, that's what it means most of the time. And you might see additional labels attached to those properties that are off market, like sale pending or contingent.

So when a property is marked pending, what that means it's under contract and likely all of those contingencies or the conditions that were given to the buyer, they've all been met. Now, this could be still an opportunity for a purchase for yourself. You'll have to pay attention and follow up with the property because not every single property will close when it's pending and it will come back on market sometimes. Contingent properties are still active listings technically, but they are under contract, and the buyer is going through their due diligence process. Now, that's another area that you may want to watch because if something comes up in their

due diligence process that they don't like, it might be reason for them to cancel the contract, and that property will go back on market as active, and that could be an opportunity for you, something that everyone else kind of gave up on because they thought it was already sold, because you followed up, that could turn into a great deal for yourself. Another label that you may see is temporary off market. And there are a few reasons that a property might be just temporarily off market. First is the property might have been on the market for a while and it hasn't sold. And the seller, they just want to take a break.

Two, the seller may be traveling and doesn't want anyone in their house, doesn't want it being shown while they're not home. Three, the seller might be making repairs to the property and getting it ready to sell. And they don't want people coming through the house before it's finished. They don't want people potentially getting hurt with construction. going on, that's another reason. Or four, maybe the seller has house guests and they don't want to be interrupted. And you'll see this frequently during the holidays or during the summer months. The second reason a property might be considered off market is because it's classified,

meaning it's a pocket listing. A pocket listing is where a seller will employ a real estate agent to sell their property, but they want them to sell the property privately. And agents will typically market these properties as, office exclusives to their more preferred clients. You'll see this a lot in the luxury home market. And they may share these pocket listings with a small network of their closest friends, their associates in their real estate industry.

Once an exclusive process, these pocket listings, they've become a lot more common. It's actually become so common that the National Association of Realtors now has a policy that these types of listings, these pocket listings, can only be promoted within their own office. The third reason a property might be considered off-market is because it's being sold at auction, which is technically not on market. You need to know about these auctions to go and get access to these types of properties. And the reason a property might end up as an auction could be one, as the seller has fallen behind on their payments and now it's in default and the bank wants it back.

Two, they've stopped or failed to make their property tax payments. And so now the city or the county is taking that property back. Or third, it could be some sort of, you know, mischievous or, indiscretion that the seller has been involved in. In other words, a crime and the U.S. Marshals are now seizing the property. The fourth reason a property might be categorized as off-market is because it's just flat out not for sale. And this is typically where real estate investors play, myself and my students included.

And you'll find typically zero competition here at all and really kind of where the best deals can be found if you know how to go out and reach out to those sellers. So now let's talk about how to find these deals. now that you know what they are. And I want to start with the properties that are listed on the multiple listing service. And this is the MLS. This is what the real estate agents use to serve their clients, where they help their clients buy properties, where they help their clients sell properties.

And if you have access to the multiple listing service, then you probably already know this. If you don't, you're going to want to connect with a real estate agent, and they can give you access and you can work together. But what you'll do is you'll search the multiple listing service. And in a little category, you can define what status you're looking for. And if we're looking for off-market properties, you can look for contingency properties.

You can look for pending sales. And what you do is you'd make a list of those properties and then you just kind of check up on them on a daily basis or every other day or so to see if any of those should fall out of contract so you can be first in line to take advantage of those opportunities. If you don't have access to the multiple listing service, you could look to a website like a Zillow or like a redfin or like a Trulia and you can search there as well.

And you will find pending sales. You will find off-market properties. is recently as just yesterday when I looked, it was there. Now, they have a tendency to change their websites all the time, so it might not be as simple as that, but you just have to be a little bit more intuitive, do a little bit of investigating, look around a little bit, and you'll be able to figure it out.

Now let's talk about how to find the pocket listings, and those are going to be directly from a real estate agent. So you're going to have to connect with a real estate agent to really get any sort of substantial access to these types of properties. However, not every real estate agent will have access to these off-market properties. Experienced agents are most likely to have access to these properties and a network in place of other experienced agents that will have these pocket listings as opposed to someone

that just got their license. Now, one thing to mention when working with real estate agents, you kind of have to understand how they view or what their perception is of real estate investors for the most part. They certainly have their custom clientele that they work with over and over and over again, but for the most part, they look at the entire real estate investing community or real estate investors in a very specific way, and it's not really in a good way. You see, they hold open houses on the weekends, and there will be a time where, I don't know, two, three, four on any given day, real estate investors will come in and ask that real estate agent, hey, you got any deals?

And they get that question all the time. And they come in and they say, I'm just looking for something that pencils. I'm looking for something that makes sense. They're very vague with their criteria. And real estate agents, they just kind of roll their eyes in the back of their head because they know it's probably not going to amount to much because most of those real estate investors do waste their time. So understand if you're reaching out to a real estate agent for the first time, that is their perception of you already. So be patient with them and explain to them specifically what you're looking for and how you plan to purchase and who you plan on representing you, and you're going to get a lot more cooperation. The best thing you can do when you connect with a real estate agent

is when they bring you an opportunity is for you to follow through. Because if you follow through, that means they get compensated. At the end of the day, that's what real estate agents care about most. They care about the commission. They care about frequent commission. They care about easy commission. They care about for sure commission. And if you represent that to them, that could be a great source of these pocket listings for you. One last place where you can find these pocket listings, and this is rather new. They have pocket listing services. You can find pocket listings on various websites, such as homefinder.com, auction.com. There are great sources of properties on realty track. You can find your foreclosures there. And don't forget, Craigslist.

It's kind of a necessary evil, but there are deals found on there each and every single day. And then also, try going to USmartials.gov. Every once in a while, you'll find some great opportunities there too. Now, another way to find off-market deals is to contract property owners directly, those that don't necessarily have their property for sale at all. Now, this is how I've purchased most of my properties, and it's how I teach my students how to do it as well. And what we're looking for are property owners with signs or symptoms of distress,

like personal distress, financial distress, or maybe the property itself is in some sort of distress. And then we'll contact them through a number of means, like maybe via direct mail, maybe knocking on their door, or just the good old-fashioned telephone. We'll also market in a way that attracts distressed sellers to us. And we can do that in a number of ways. Anywhere that you can market or advertise is a great way to attract these sellers to call you for help. You know, that might happen through those little ugly yellow signs that you've seen in your neighborhood. it says we buy houses. You see those everywhere because they work. It's a great way to contact

and find off-market sellers, off-market deals. We can also use social media. We can use Google ads and classifies both online and off. And really, there's an unlimited number of ways that you can do this. Wherever there's marketing, wherever there's advertising, that's a potential opportunity for you to place your message in front of distressed sellers. Now, contacting sellers, it can sometimes be slow going at first, but with persistence and consistency, it can snowball into an abundance of real estate opportunity for you. So be patient because you'll talk to sellers who might not want to sell now, but if you're patient and you stay in touch,

when they are ready to sell, they're going to contact the person that they remember. So you want to stay at top of mind and you continue to do that with your marketing. Now, another strategy to contact these types of sellers that might be more ready to sell than not is to go through the public records and kind of evaluate their situation and see if they're in a position where, you know, they probably actually need to sell or very at least should sell. And what I'm actually referring to are properties that are in pre-foreclosure or properties that have been issued a notice of default. You see, these are public records. And this is a sign,

a symptom that there might be some sort of financial distress there because what it says is they have fallen behind on their mortgage payments. And either they're going to catch up or they are not. And if they are not, you want to be there to help them out before the bank actually takes the property back. And you should also monitor eviction records because evictions can be costly, they can be time consuming, they can be very frustrating for landlords. And this might be an opportunity to reach out to a landlord when they've absolutely had it and they are ready to sell. So if you like to get started, looking for off-market deals, what I've done is I put together a short free training for you. And you can go ahead and access that free training at maxfreetraining.com. And that wraps up the epic show. If you found this

episode valuable, who else do you know that might too? There's a lot of there's a really good chance you know someone else who would. And when their name comes to mind, please share it with them. And ask them to click the subscribe button when they get here and I'll take great care of them. God loves you and so do I. Health, peace, blessings and success to you. I'm Matt Terrio. Living the dream.

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