13 Dec 2 types of off market properties – Nhan Nguyen
Nhan Nguyen is a very smart and successful investor and he joins us to talk about how he finds ‘off market properties’. He says they fall into 2 categories and you need to know the difference because it will help you secure the property.
Kevin: One of the things I do know about property investors is that they like to be ahead of the game. They like to know where the properties are moving and which ones they can probably pick up at a fairly keen price. You’ll do that if you focus on off-market properties. So, what are they, how do you find them, and how do you secure them? A man who does it quite often –he even surprises me – Nhan Nguyen from Advanced Property Strategies.
Good day, Nhan. How are you? Nice to be talking to you again.
Nhan: Good day, Kevin. Thanks for having me back. It’s a real pleasure to be back, and yes, I love doing deals. So, I appreciate you giving me the opportunity to talk about property.
Kevin: I know you love doing the deals, and we’ve featured a few of those in the show in recent times, too. Off-market properties, firstly I guess as the name says, it’s a property that’s not really on the market. Aren’t you dealing there with a seller who isn’t all that keen on selling, Nhan?
Nhan: Generally, we put off-market into two categories. One that is currently being listed with a real estate agent or just listed and an agent gets it to you first, and then the other one is completely off-market; they don’t even know that the property is going to be sold soon.
The first way that we generally focus is with real estate agents. I think that’s the easiest way for most beginners to start with. We have a couple of key ways to do that. What you’re wanting to do is really just get it before it hits RealEstate.com and gets on the Net.
The agent might be about to list it on a Tuesday and they ring you on the Monday, the day before, saying, “I’m about to get a listing, it’s going to be this and this, if you want to check it out.” Then they list it on the Tuesday, and you sign the contract on the Tuesday/Wednesday, before it even hits the Internet for the open home.
That’s one category, and the other category we have is definitely with property owners who are nowhere near listing their property yet.
Kevin: There’s a number of questions I want to ask you about both of those categories. Let’s deal with the first one, where the agent gives it to you before it goes up onto the portal. I believe that most sellers want more than their house is worth, and that generally means that a real estate agent may just list at a little bit more than what it’s worth initially.
How do you overcome that without paying too much for the property?
Nhan: Like you said, most property owners want too much or most property owners want retail, and then you’re left with the few. So, you might have 1%, up to even 3% or 4%, who are happy to sell it for a price that might be under market or at a complete discount.
There are definitely instances where owners want a really quick sale, and what we generally look for is a motivated seller. We talk about the four D’s: deceased estate, debt (as in the bank), distance (as in interstate owners), or divorce.
When people are motivated to sell, they’re more negotiable, and sometimes they’re not actually after top dollar; they just want to sell their property. That combined with an agent who is happy to sell the property… He or she might be out of town or interstate even. We’ve had agents from out of town who don’t know the values of the property; there’s definitely an opportunity there.
Kevin: I guess in that first instance where you’re working with an agent, it’s fairly important that you build a relationship with that agent so that they’re going to come to you first.
Nhan: Exactly. And there are a few ways that you can do that. One is ringing them regularly, going to open for inspections. You might catch up with them once a month, even just a quick phone call, “Hey, how are you doing? What have you got?”
The other core strategy that we use in our programs with our clients is sending them text messages. You can send them individually or you can send them group texts, one to 100, one to 300. Or group e-mails, keeping their e-mail address on a database. Just like they keep our details and they send us listings once in a while, you can send them group e-mails, as well.
I think a big part of it is collating the information about the agents and keeping in touch with them, just like any customer or a business should.
Kevin: I guess you have to go down a few dry gullies in that second instance where you’re finding a property that’s not really on the market, therefore you have to convince them that now is a good time to sell.
Nhan: Yes, definitely. And we’re talking about a very small percentage of deals. We’re talking 1%, maybe 3% or 5%. So, let’s call it one in 20 properties that you’d find are motivator. That’s the first thing. It’s a numbers game.
If you’re looking at 10 or 20 properties and you think, “Geez, there aren’t many deals,” you just keep looking and looking and looking. It’s like finding the right partner; you have to try different things to find the right house. You just have to look at a lot of different alternatives, different options.
But having said that, you have to be focused as well, in your area, in your budget, in your strategy. You have to really focus. Wherever you’re at, there are deals, because wherever there are people, there are people wanting to sell and there are people wanting to sell potentially at a discount, too.
Kevin: I imagine – as you just indicated – that you have to really focus on an area. Do you also focus on a type of property, or do you just broadly canvas an area?
Nhan: I personally have a set of strategies. I know some of my clients just want to look for renovators, so houses that are typically not brick, because let’s say they might have old Queenslanders; that’s a lot easier to renovate. I have some clients who are focused just on, let’s say, splitters or one-into-two subdivisions. So they might pick a suburb, they might look at properties that are over 800 square meters so that they can potentially subdivide it.
Yes, you have to focus on a suburb, you have to focus on a strategy and a price point too. It’s tailoring the various things including your budget, your strategy, and matching that to the suburb as well.
Kevin: Always good talking to you. Nhan Nguyen.
Nhan’s website is AdvancedPropertyStrategies.com if you want to contact him and get a little bit more information about how he does this. My guest has been Nhan Nguyen.
Thanks for your time, mate.
Nhan: Thanks, Kevin. I appreciate it.