How One Specialist Sources Properties Off Market

Chris Koerner,  CEO of the boutique firm Off Marketers, recently sourced a 77-unit mobile home park in Oklahoma for a client. It was a great deal for the buyer as the park traded at an 11% cap rate, while rents were 30% under market. A yard sign, Koerner says, was the seller’s only form of marketing. So how did Koerner find this gem for his client/? Driving around looking for ‘for sale by owner’ signs? Not in this case, although he and his team have done that before. This time, rather, he was working the phones and hit the jackpot – a property owner that was looking to retire. “We called at the right time,” he says. 

With real estate deals almost on pause as buyers and sellers try to get a better sense of price discovery, many of the transactions that are closing are being sourced off market. Buyers have their reasons for limiting the marketing of their assets and sellers like the price advantage – perceived or not – that off market delivers. Koerner, not surprisingly, believes that off market does deliver benefits to both buyer and seller. A marketed property might sell for a 6% cap but off market can go for an 8 or 9 cap, he says. Indeed, the economy doesn’t have to be sour for some buyers to prefer off market deals. Rexford Industrial Realty, for example, has turned off market acquisitions into an art form. 

But for smaller companies or investors, the process can be difficult. “Off market is hard to scale because it is so relationship based,” Koerner says. And if you don’t have the relationships you need for a particular asset/? Legwork and a lot of time on the phone will also work, he says.

This is how a typical off market search might go for Koerner.

He starts out with a discussion with the buyer. “We will spend a couple of hours learning what they are looking for, getting as many details as possible.” Koerner also makes sure to understand at what point the buyer wants him to hand off the leads he has found to the buyer. “We don’t want any friction in the handoff.”

Then he gets to work and searches online and in person for properties that fit the client’s requirements. “Most of what we do is on the phone using our people skills. There’s nothing proprietary about it.”

When Off Marketers finds a property that would suit the buyer’s requirements, the next challenge is finding who owns it, which is not necessarily straightforward. They use an array on online sleuthing tools to trace the owner, including Find The Seller, Lead Sherpa, Skipease, EmailSherlock, TLOxp, BatchSkipTracing Service, Truthfinder, Phone Validator (always text first if you can, says Koerner), searchbug.com and  Online Bulk Email Validator. 

“I have zero affiliation with these tools but we use all of them on a weekly basis.”

He expects to get plenty of use out of these in the coming months and perhaps longer. “I see more people turning to the off market every day. Deals are getting harder to come by and people are having to be more creative.”