My nephew Jason recently started investing in real estate—a strategic move from his stressful corporate gig. But, just like every other new real estate investor, his major hurdle has been finding off-market real estate leads here in NJ. That’s why he called me up last week.
He wanted to know which distressed homeowner lead generation strategies actually work. It seems he’s tried a few and they all seem to go nowhere. It’s a common problem. So, since I’ve been in the business for almost longer than Jason has been alive, I walked him through the options. Let me share what I told him.
Why Sellers List Off-Market Real Estate in NJ
Before even starting to look for off-market real estate in NJ, it is important to understand why homeowners may want to sell properties without going through a real estate agent. That way, you’ll be prepared to approach the homeowner with an understanding of where they are coming from. Only then, can you put together a deal that’s a win-win for both of you—when you find that off-market real estate lead here in Jersey.
There are many reasons behind off-market listings, but these are the main ones:
Testing the waters
A homeowner can take stock of their home value by receiving a few off-market offers. Sometimes, however, homeowners keep their off-market property listing active for months—or even years—while waiting to hear the number they are hoping for.
We may be seeing a lot of homeowners testing the waters in New Jersey this year. Since the coronavirus hit, 1.5 million people have filed for unemployment insurance. They have been receiving extra federally-paid income and getting mortgage relief to keep their homes so, while they know a change is coming, they may not be in a hurry to sell just yet.
These are the deals you want to avoid because you’ll get entangled in rounds of negotiations and potentially end up paying more than you anticipated. Once you get your heart wrapped around a deal and spend significant hours trying to make it work, you are in a terrible position for letting it go when the numbers don’t work out.
Avoiding a stale listing
When a house was listed on the MLS for too long without garnering a lot of interest, the homeowner will often take it off the market and try to sell privately for a while. This resets the official days-on-market that makes the listing look stale to potential buyers on the traditional market while still providing the opportunity to, perhaps, sell it.
Recently, we are not seeing a lot of stale listings on the market, though. In fact, demand is outweighing housing stock across most of New Jersey. So, when a listing does go stale, it probably means that it was not priced right. The homeowner may have an inflated idea of what their house is worth and still be willing to wait it out.
However, sometimes you can find a good deal from a NJ off-market real estate listing
—but it’s a gamble. Sometimes, having a listing go stale can provide a dose of reality for
the homeowner and make them more eager to get it sold.
New Jersey has one of the highest foreclosure rates in the country and distressed homeowners facing one can avoid it by selling quickly. It’s true that back in March, Governor Murphy organized a moratorium on foreclosures with numerous lenders. That ended in May. And, some of the lenders required that the full amount due during the moratorium be paid in full within 60 days of the mortgage relief ending.
Now, I expect we will begin to see a lot of distressed homeowners putting their NJ homes up for sale via off-market listings to try to avoid foreclosure. This provides you with an opportunity to help your community. But, how do you find these homeowners in the first place?
How to Find Off-Market NJ Real Estate
As a new investor, finding NJ off-market properties that convert is not as easy as it seems. Hitting the pavement in high-foreclosure areas and knocking on doors may not be the best strategy. After all, many homeowners may be embarrassed about their “ugly” situation and not feel like talking about it.
But, here are a few other ways to look for off-market properties in New Jersey:
Scanning social media is one of the easiest ways to start searching for potential leads for deals. A quick search on Facebook, for instance, will bring up several real estate groups to join: NJ Off Market Properties, NJ Off Market Deals, Platinum Off Market Properties NJ—the list goes on and on.
Unfortunately, you are not the only one looking at these deals. One recent post on the availability of off-market properties near Journal Square in Jersey City got 41 comments asking for details. That doesn’t even include the private messages you know are happening. Sure, there are potential off-market leads on social media but the chances of you being able to grab them before someone else does are slim.
You might have heard that homeowners selling their distressed properties off-market respond well to a more personal approach. To connect, you can buy lead lists of distressed homeowners in NJ, filter a few prospects, and send them personalized mailers. Assuming that your lists are up-to-date and your postcard or flyer reaches the right people, you need to do this exercise a lot of times before someone takes notice. After all, it is a numbers game to get that one meaningful conversation with a potential lead.
You can also follow a more conventional approach to reach out to distressed homeowners and increase your visibility through advertisements in print, TV, radio, and billboards. Not many investors have deep pockets to advertise through these platforms and this can put you ahead of the game. However, it is not a one-time investment; you need to maintain a significant budget to keep those ads running.
I’m sure you are well aware of the power of networking. Getting in touch with other established investors can help you get to know the market—and opportunities—better. Multiple chapters of real estate investment associations (REIAs) across NJ can be good platforms for networking with other investors who have a deal in their pocket.
The trouble is that those investors with enough experience to have deals at the ready likely already have a network in place. That’s why you’ll find that there is low attendance at many of these club events. And, those that do show up are hoping for the same access to opportunities as you are.
All of these lead generation strategies hold at least some potential for getting you an off-market NJ real estate deal but it’s also possible that you’ll fall into a rabbit hole and spend endless hours chasing one. It’s easier if distressed homeowners come your way on their own.
A Better Way to Get Off-Market Real Estate Leads in NJ
When I was a new real estate investor, I tried all the tricks of the trade to try to get leads on off-market deals across our Garden State. Some worked—sometimes. Most didn’t get me where I wanted to go, though. It was a constant gamble trying to decide where to spend my time and energy.
That’s why I became an independently-owned and operated HomeVestors® franchisee. The nationally-known and trusted “We Buy Ugly Houses®” ad campaign reaches distressed homeowners through television, radio, and print across New Jersey. So they know who to call when they are serious about selling. Rather than wondering which of my lead generation methods will get me potential deals, I actually receive calls from qualified leads.
Ready to get off-market real estate deals here in NJ with less hassle? Contact HomeVestors today.
Each franchise office is independently owned and operated.