How Data Is Changing Off-Market Real Estate Investing

Dek: Technology is transforming an out-of-the-way corner of the real estate market through increasingly sophisticated predictive analytics and property intelligence. Here’s what investors should know about tech and off-market real estate.

The real estate market has been in flux for years now. A recession, a pandemic, policy changes and growing consumer demand have created a string of unpredictable ups and downs that have lasted for the better part of two decades. Throughout each opportunity and challenge, one quiet shift has continued to unfold behind the scenes: the relentless march of technological improvement.

Real estate is feeling the impact of technology in most areas. It enables remote property tours via drone so buyers can look at details like a live feed of a roofline or observe a backyard from their laptop. Technology is also doing things like tokenizing commercial real estate, reducing barriers of entry and helping with investor accessibility. 

There’s one area that is historically hard for tech to transform, though: off-market properties. That is, until a recent wave of tools started to tackle the issue. Here’s how technology has officially reached even this hard-to-reach corner of real estate—and how data-driven tools are already helping investors identify opportunities right as they become available.

Many sectors of the real estate market are well-known, like residential housing and commercial real estate. One area that is easy to miss, though, is off-market real estate. For those who aren’t familiar with the term, on the surface, it is fairly self-explanatory. 

An off-market property is a home or building available for sale but not publicly advertised. That typically means it hasn’t been uploaded to the MLS (Multiple Listing Service) or any major real estate portals. 

If a property is off-market, it gives investors a chance to make a deal with a warm seller who’s ready to part with their property. If they move quickly, they can do so without much competition. They also have more negotiation room. 

Sellers can also benefit from off-market deals. For instance, they get to have more privacy when they sell. They can also have more control over things like timing and terms. They also don’t face the same “days-on-market” pressure that comes with a public listing.

While off-market deals may work for everyone involved, they are rare because this type of real estate market lacks transparency. Traditionally, investors have had to seek off-market opportunities through private networks and direct outreach. This means working blind, hoping they find an off-market sale before it goes public—or someone else finds it first.

This is where technology is making a difference.

Private networks and direct outreach have limited effectiveness. They have a natural lag time and lack the larger scope and awareness that real-time data offers. New tools are upgrading the off-market investor experience by helping them find, analyze and turn key data in this out-of-sight corner of the market into actionable information

This starts with predictive data. The ability to find opportunities before others is a key element that makes off-market real estate work. Investors have to be faster than the competition if they want to purchase a property before others get their eyes on it.

Platforms like DealMachine are designed to use data to make predictions and identify off-market properties faster than traditional human networks. The tool helps investors locate motivated sellers before their properties are listed. This makes it easier to make informed acquisition decisions, another area where data is transforming off-market business.