02.12.2025 PropStream
Disclaimer: PropStream does not offer investing advice or make profit promises. This article is for educational purposes only. We recommend consulting financial professionals and/or doing your due diligence before investing in real estate.
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Key Takeaways:
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It’s no secret that U.S. home affordability is at record lows. According to the Federal Reserve Bank of Atlanta, the income needed for homeownership to be considered affordable is over 40% more than the actual median household income, a gap that widened significantly since 2021.
As a real estate investor, you can help relieve the country’s home affordability crisis by identifying off-market opportunities and adding inventory to the market. Read on to learn how!
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Current U.S. Real Estate Market
In January 2025, the median U.S. home listing price was $400,500, down 2.2% from last year but up 33.8% from 2020—a rapid increase compared to historical averages.
Part of what’s driven up home values is limited supply. On the one hand, construction hasn’t kept up with demand, and on the other hand, existing home inventory has been constrained by homeowners who won’t give up their low pandemic-era mortgage rates (aka the lock-in effect).
Meanwhile, higher interest rates have kept many potential homebuyers on the sidelines. According to Freddie Mac, the average 30-year fixed mortgage rate went from 2-3% in 2021 to a peak of 7.79% in the fall of 2023. Since then, it’s stayed in the 6-7% range.
As a result, home affordability will likely remain a challenge for the foreseeable future, with J.P. Morgan forecasting little mortgage rate relief in 2025 and a 3% rise in home prices.
Find Off-Market Deals at Below-Market Prices
To offset the rising cost of homebuying, explore off-market opportunities. This means finding properties that aren’t listed for sale but whose owners, nonetheless, may be interested in selling.
For example, a senior homeowner may want to downsize to a smaller home but not know where to start. Similarly, a recently divorced couple may need to sell their house to split the proceeds but are too overwhelmed to take the first step.
As a real estate investor, you can step in by offering to guide such homeowners through the selling process and take their homes off their hands. That way, you provide a valuable service while facing less buyer competition, which could result in a below-market purchase price.
Types of Off-Market Opportunities
Here’s a list of off-market opportunities to consider:
Pre-foreclosures: These are properties that are on their way to foreclosure. Typically, the homeowner has missed at least three mortgage payments and, consequently, may be motivated to sell at a discount to avoid full foreclosure (and the resulting damage to their credit).
Divorcees: Many recent or soon-to-be divorcees must sell their house to split assets and move on with their lives. However, they likely already have a lot on their plate. By offering to buy the house quickly, you could help them while securing a favorable deal.
Bankruptcy filings: Victims of bankruptcy are sometimes required to liquidate their homes to settle debts. As an investor, you can search recent bankruptcy filings to find potential property leads or ask for referrals from a local bankruptcy lawyer.
Lien properties: Homeowners with tax or mechanics’ liens may be motivated to sell to avoid legal trouble or financial strain. Check public records for properties with outstanding liens and offer to negotiate a mutually beneficial purchase price before the situation worsens.
FSBO listings: “For Sale by Owner” (FSBO) properties are listed without a real estate agent, often by sellers who want to avoid paying agent commissions. However, they tend to get less attention than MLS listings. With less buyer demand and the seller already saving on commission fees, you may be able to negotiate a below-market purchase price.
Probate sales: When a homeowner passes away, their property may go through probate court before being sold. Heirs or executors may be eager to sell quickly, particularly if they don’t want to own the property or need to settle debts.
Wholesalers: Real estate wholesalers put discounted properties under contract and then assign the contract to investors for a fee. By building strong relationships with wholesalers, you can access deals before they hit the public market.
Local contractors: Contractors often know about future homes for sale because they’re the ones building and renovating them. Network with contractors in your area to learn about insider opportunities before having to face competition from other buyers.
Vacant properties: Abandoned homes, including zombie properties, often indicate absentee owners or financial distress. Locate these properties by driving around neighborhoods, asking for referrals, and searching public records for unpaid property taxes.
Pocket listings: Some real estate agents hold exclusive listings that never hit the MLS. These “pocket listings” are often shared only with select investors or buyers, making networking with agents a valuable off-market strategy.
Tired landlords: Longtime landlords dealing with difficult tenants, costly repairs, or burnout, may be open to selling their rental properties at a discount. To find them, research properties that have had the same owner for a long time.
Senior owners: Older homeowners (especially those who’ve outlived their spouse) may want to sell their house to downsize or move to an assisted living facility. Offering a hassle-free sale can appeal to them and allow you to buy at a discount.
Expired listings: Properties that were once listed but didn’t sell are called expired listings. Contact the owners directly to see if they’re still interested in selling. They might be more motivated to sell off-market after dealing with the frustration of a failed listing.
Make a Difference In Your Community
That said, finding off-market real estate opportunities isn’t just about getting a good deal. It’s also a way to make a difference in your community by improving local home inventory and boosting neighboring home values.
For example, say you buy a vacant property, fix it up, and resell it to a responsible homeowner. That not only removes what was previously a blight on the neighborhood that pulled down property values, it also puts another home on the market to help relieve the housing shortage.
Similarly, think of all the motivated home sellers you can help by taking properties off their hands. Those facing foreclosure, bankruptcy, divorce, retirement, old age, and other challenges are often in serious need, and helping them sell can be a great relief.
5 Tips for Finding Off-Market Deals
Now that you know how off-market deals can benefit everyone involved, here are some best practices to follow:
1. Pick an Off-Market Niche
Instead of trying to serve all off-market lead types, choose one. This helps you develop expertise in that area so you can better serve and attract your ideal lead type.
For example, you could focus on FSBO sellers. Learn what they value (e.g., quick sales with minimal middlemen) and provide relevant advice. You could even host free FSBO workshops to attract leads. If the deal is right, some might agree to sell to you!
2. Help, Then Pitch
Before pitching to buy an off-market property, help the owner solve a problem. That way, they’re more willing to return the favor by selling to you at an attractive price.
For example, you could introduce tired landlords to modern property management tools or refer them to reliable contractors. If they’re satisfied with the help, they’re more likely to consider a potential sale—especially if they trust you’ll take good care of the property.
3. Don’t Be Afraid to Negotiate
In real estate sales, everything is negotiable: price, closing date, concessions, etc. To get the best deal, learn what the seller wants and try to tailor your offer accordingly.
For example, if the seller needs a quick sale, offer a fast closing or cash (instead of financing). In exchange, they might agree to lower the purchase price, increasing your ROI.
4. Network with Local Professionals
Maintain strong relationships with local real estate agents, contractors, attorneys, and other professionals who can refer you to off-market deals. They’re often the first to know when a property is going up for sale, giving you a leg up in finding hidden opportunities.
Start by attending local real estate events or joining online real estate groups. Introduce yourself to people and offer to help them. That way, they’re more likely to return the favor.
5. Build an Online Following
Use social media and online ads to educate potential sellers in your off-market niche and tailor your messages to their pain points.
For example, if you specialize in buying pre-foreclosure properties, you could offer tips on how to avoid foreclosure and share your contact information with those interested in selling quickly.
Use PropStream to Find Your Next Off-Market Opportunity
Whether you want to serve senior homeowners or divorcees, the simplest way to find your next off-market opportunity is to PropStream It!
PropStream’s database of over 160 million properties nationwide includes 20 unique lead lists for failed listings, liens, pre-foreclosures, senior owners, vacant properties, and more. Plus, PropStream now offers datasets powered by predictive AI (PropStream Intelligence™) for the most updated, in-depth information possible.
Use these “Lead Lists” to narrow your search and receive updates whenever new properties are added to your off-market niche.
