Top Tips to Find Off-Market Deals

August 17, 2022

Learn some insider tips for winning on your next deal!

If you need to fill your development pipeline in a competitive market, trawling the MLS may not be your best bet. Learn how to find and action off-market deals with this guide.

What is an off-Market Deal?

Quite simply, an off-market real estate deal is an opportunity that is not listed on an MLS. These deals may fall in a few categories:

  • Land that is ready to list, but has not hit the MLS yet. These deals are typically already represented by a seller’s Real Estate agent.
  • Land that an owner has considered selling, but has not yet begun the process.
  • Land that an owner has not considered selling yet.

In all of these cases, the opportunity is at least somewhat hidden to the wider market. The biggest advantage in finding off-market deals is the competition is usually much less than for land listed on an MLS since fewer people know about it. However, these types of deals may be hard to find.

Read on to learn some tricks of the trade to find and manage off-market deals to get the most out of your competitive advantage.

Create a Game Plan

To succeed with any real estate transaction, you need a strategy. This is especially true for prospecting off-market deals. Without the guidance of the MLS, it can be easy to get bogged down in too much information and market noise. To speed your search, create a laser-focused plan so you are only considering the opportunities that make sense for your business.

What do you want to build?

This is probably the simplest step. Are you a commercial developer? Industrial? Residential? Most likely, you target a specific type of development based on your or your employer’s expertise. To focus your search further, decide what subset of that larger category might best serve the market you’re entering.

Commercial

Office space?

Retail?

Laboratory/Medical?

Hospitality?

Midrise? Highrise?

Industrial

Manufacturing?

Storage/Shipping?

Datacenter?

Flex?

Residential

Greenfield subdivision?

Townhome/Condominium?

Multifamily?

Mixed-use?

Midrise? Highrise?

What are the Opportunities?

Know what your target outcomes are. These will shape your search. Take a look at your history of past wins and uncover what made these projects successful. Was it the number of units? The location? The size of the parcel? The adjacency to complementary amenities? Note these, and ensure any sites you select from your off-market research include these hallmarks for success.

What are the Red Flags?

Know what can prevent a deal from being profitable, and avoid sites with those issues from the start. Many of these items are part of typical due diligence. Include them in your research from the start to avoid encountering blockers later on in the development cycle.

Some Potential Deal-killers:

  • Wetlands or other environmentally-protected area coverage
  • Extreme grade changes or flood planes
  • Environmental/Geotechnical Issues
  • Presence of Hazardous material
  • Restrictive Zoning overlays
  • Legal or title issues

Luckily, you can visualize some of those blockers in Giraffe with geospatial Layers.

Giraffe has curated thousands of public data layers, and you can also add your own.

Form Strategic Partnerships

Leverage a network of contacts to bring you potential deals.

Brokers & Agents

Real Estate Brokers and Agents are often the first to know about a property’s availability. Sellers may choose a broker or real estate agent to list their property early on in their selling process. Brokers and Agents often directly share properties with their network of contacts when they fit the targets of that developer. Get in with a good broker, and they can fill your pipeline for you!

Wholesalers

Wholesalers are similar to real estate agents, except that they typically specialize in distressed properties. If a seller wants to get a property off their hands without making necessary improvements, they may enter into a contract with a wholesaler, who will sell the land for them. Wholesalers, by nature of their business, are a natural resource for sourcing off-market properties.

Take Advantage of Public Resources

Leverage openly-available data and information to inform your decisions. Many cities, states, and countries provide Open Data repositories that offer a wealth of information. Try searching Your City + Open Data (i.e. Chicago Open Data) to find a resource for your area.

Many of these repositories include GIS data, either as an ESRi API url or a vector, like a .shp file. Upload these to your Giraffe project to visualize the context for your sites.

Here are some insider tips for using open data resources:

Go where the action is

Get in while the getting’s good! Find and map points of interest that benefit your development strategy.

  • Trying to find the next up-and-coming neighborhood? Find the locations of new Building Permit applications, approvals, or in-progress sites.
  • Trying to revitalize a corridor? Map demolition permits or building code violation locations.
  • Trying to determine the next big business corridor? Locate new business permits.
  • Looking for family-friendly neighborhoods? Bring in points of interest like schools, playgrounds, and community centers.
  • Need good foot traffic or population density? Check out traffic data and walkability scores.

Target Tax-Advantaged Zones

Many governments create plans to encourage development in underserved areas. The United States’ Federal Opportunity Zones and London’s Opportunity Areas are two examples. Many cities, states, and countries have their own tax advantaged areas that encourage everything from multi-family housing to business development to cultural investment.

Work with City Planning

Governments put a lot of work into planning for future development in their cities. Take advantage of this work by targeting developments in designated areas. It will likely be easier to earn approvals if your proposal matches the city planning vision.

Go Deep with Paid Data Sources

Depending on the depth or breadth of data provided by open resources, you may wish to leverage additional resources at an added cost. Giraffe offers two datasets that can assist in your prospecting: Site Search by Regrid and Demographics by Local Logic.

Tax Data

Instantly understand important parcel and zoning data on the map to easily scout sites you’re interested in. Simply click a site to see its metadata including ownership, parcel area, and more.

With Giraffe Site Search, powered by Regrid, you can use intuitive multi-criteria filters to narrow and qualify potential sites that suit your needs. See qualified sites in context on the map. Search by parcel size, owner, zoning, and more to find the exact opportunities you’re looking for.

As you apply filters in the Site Search app, fewer parcels will remain highlighted on the map. The parcels that remain highlighted meet the current filter criteria.

💡 Succeeding with Site Search

A key strategy to succeed with the Site Search app is to find under-utilized sites.

For instance, if your development strategy is to build mixed-use, residential, midrise, try searching for sites whose current zoning allows for mixed-use but whose current land use description is not mixed-use. These types of opportunities may allow you to build much more by-right.

Demographics

You likely have a target demographic for potential clients of the tenants or buyers of your commercial property. Understanding where those people live and work can help you to target areas that would make occupants of your development successful.

Take a deep dive into the demographics data for a site using Giraffe Demographics, powered by Local Logic (coming soon 👀). Data will include information like age, family composition, salary ranges, and commuting preferences.

Validate your Choices

Once you’ve uncovered a potential site, you’ll want to test your assumptions. Quickly create a feasibility study using Giraffe’s robust drawing and financial toolsets.

Draw Quickly

Giraffe is a tool for expressing your ideas. Choose what you want to create in the dock, then start drawing by clicking on the map.

💡 Learn more about How to Draw Buildings in Giraffe here.

Include your Assumptions

Giraffe connects the geometry you draw with the data you see through the concept of a Usage.

💡 Learn more about Usages here.

Usages allow you to compile a database of standards and assumptions. This allows your team to apply the same data to multiple geometries within a project. From giving all the residential buildings the same buildCost to making all annotations blue.

Giraffe comes with some default usages such as Residential , Road, Basement Carpark and Annotation , and you can create your own and copy them between projects.

Test Dynamically

Get powerful insights about your project’s performance, at a glance. Both the Urban Tab and Analytics provide instant-read access to key performance indicators for your project. The Urban Tab contains common presets, while Analytics is 100% customizable. In both cases, see how changes to your project rack up against your goals instantly as you draw.

Urban

Understand if your project performs with instant data read-outs from the Urban tab. The Urban Tab shows a quick analysis of the geometry on the map, based on inputs from Usages and Analytics.

The Urban tab includes key metrics, such as:

  • Building Areas, broken down by Usages, Buildings, or Groups
  • Site Areas, showing building footprint, hardscape coverage, and open areas.
  • Max Building Height
  • Façade Area and Floor : façade ratios
  • Jobs
  • Paved and landscaped areas
  • Parking provided versus parking required
  • Residential metrics, such as dwelling counts, number of residents, and space per person.

Analytics

Analytics runs off geometric properties of map features you created whilst Drawing, like area, width and length, height, and volume; combined with additional metadata from the Usages and Feature Properties where you identified certain global assumptions for your project.

The meat of Analytics is the Measure: a formula that combines numerical data from units, properties, other measures subtotals, and site areas with additional formulaic inputs to produce calculations that match your firm’s requirements. Results from calculations performed in Measures could be hard costs, net rents, IRR, NOI, impact - the sky is the limit!

The user interface further delineates data with Categories and Tabs, which allow for clean reporting and easy navigation.

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Track Your Progress

So, you have a design that pencils out. Now what? As a deal moves through the development pipeline, it’s important to keep track of its status. Use Workspace Properties to Manage Projects by status on a Kanban or Map view.

Set up Workspace Properties

Think of Workspace Properties as attributes that describe the projects in your portfolio. You can use the data input into these properties to organize, filter, and manage your work.

You can add as many workspace properties as you would like. The best practice is only to add what is necessary - your workspace users may not fill out the information if they do not feel it is pertinent.

Suggested properties for Site Tracking

Some key properties you may want to create if your goal is tracking the status of your projects might be:

Property Info

  • Address
  • Land Area
  • Current Owner
  • Zoning
  • Current Land Use

Status

  • Offer Status: Offer Pending, Offer Sent, Negotiating, Offer Accepted
  • Project Status: New, Open, On Hold, Dead
  • Development Status: Opportunity, Due Diligence, Architecture, Permit, Under Construction, Complete

Development

  • Product Type
  • Market/Sub Market
  • Highest and Best Land Use

Project Management

  • Assigned To
  • Next Task Due Date

Due Diligence

  • Acceptable Flood Risk?
  • Acceptable Wetlands Coverage?
  • Acceptable Grading?
  • Environmental testing results

Financials

  • Land Value
  • Offer Sent?
  • Current Offer Amount
  • Max Offer
  • Potential Total Deal Value

Create a Board

Take advantage of a widely-used project management tool, the Kanban, right inside of Giraffe!

🎓 Kanban is a visual method for managing project pipelines. It is Pronounced “kahn-bahn,” and the term translates from its original Japanese to “visual signal” or “card.”

A suggested set up for a site tracking Kanban could be:

Name of Board: Project Tracker

Group By: Development Status

Sort By: Next task Due Dat

Color Cards by: Offer Status

Card Details: Address, Assigned To, market, product Type, land value, Offer Amount

Filter: Not Dead

Aggregate By: Potential Deal Value

You can create as many boards as you like. Take advantage of different sorting methods, or highlight groupings that make sense for different users in your org.

Track Your Projects

Manage your projects in a Kanban. Click and drag cards from one column to another to change the project’s status. Review the aggregated values at the bottom of the columns to understand your pipeline and uncover bottlenecks.

💡 You can group by almost any property. The Select property type works the best. Try grouping by “Assigned to” to quickly manage your team’s tasks

You can also manage your portfolio of projects from the map. These views use the same settings as the Kanban views in your portfolio. You can see all of the projects in your portfolio at once. Zoom in to see more details.