If you have spent any time searching for investment properties on Zillow, Realtor.com, or your local MLS, you have probably noticed the same thing every other investor in your market has noticed: the numbers rarely work. Listing prices are high, competition is fierce, and by the time a promising property hits the open market, it often has multiple offers within days. For investors who rely on buying below market value to make their strategy work, the MLS can feel like a dead end.

This is why a growing number of Florida investors are turning to off-market properties. These are deals that never appear on the Multiple Listing Service, the centralized database where real estate agents list homes for sale. Off-market transactions include foreclosure auctions, tax deed sales, tax lien sales, wholesale deals, direct-to-seller purchases, and pre-foreclosure negotiations. They represent a surprisingly large slice of the overall real estate market, and for investors willing to do the extra legwork, they often provide the best opportunities for profit.

According to analysis by ResiClub and BatchService, approximately 1.2 million homes sold off-market in the United States in 2024. Texas and Florida led the way, with Florida accounting for over 123,000 of those transactions. When you consider that only about 4.06 million total existing homes sold nationally that year according to NAR data, that means roughly 30% of all residential transactions happened outside of traditional MLS channels. A separate survey of real estate investors by OfferMarket found that 40% of respondents said their most recent purchase was an off-market deal, a number that surprised even the researchers who expected the figure to land closer to 15% to 25%.

So what makes off-market deals so appealing, especially in a state like Florida where inventory is finally rising and the market is shifting? And when does it actually make more sense to buy through the MLS? This article breaks down both approaches in detail so you can decide which strategy fits your goals, your experience level, and your local market conditions.

The Florida Market in 2025: Why the Playing Field Is Changing

To understand why off-market investing is gaining traction, you first need to understand what is happening in Florida’s broader housing market. The state has been going through a notable transition over the past two years, and the dynamics that made it a red-hot seller’s market during 2021 and 2022 are no longer in play.

According to Florida Realtors’ year-end 2025 housing report, the statewide median sales price for single-family existing homes at the end of 2025 was $413,990, down 1.4% from the previous year. The condo and townhouse market softened even more, with the median price dropping 4.7% to $310,000. Inventory levels for single-family homes sat at a 4.6-month supply, while condo and townhouse inventory ballooned to an 8.8-month supply, firmly placing that segment in buyer’s market territory. Florida Realtors Chief Economist Dr. Brad O’Connor noted that while the year started with falling sales and rising inventory, the back half of 2025 saw renewed buyer activity as mortgage rates moderated.

The National Association of Realtors’ Q4 2025 data painted a similar picture. NAR Chief Economist Lawrence Yun pointed out that declining markets were concentrated primarily in Florida and Texas, where robust supply and recent home construction were increasing competition among sellers. In South Florida specifically, Redfin found that the Miami-Fort Lauderdale-West Palm Beach metro held nearly 10 months of housing supply, making it one of the most buyer-friendly markets in the entire country. Median prices there dropped 5.7% year-over-year.

What does all of this mean for investors? On the MLS side, more inventory and softening prices create better opportunities than investors have had in years. But on the off-market side, the same financial pressures driving inventory higher (rising insurance premiums, climbing HOA fees, homeowners struggling with adjustable-rate mortgage resets) are also creating a larger pool of distressed and motivated sellers who may never list their property traditionally. The opportunity exists in both channels, but the strategies required to capitalize on each are very different.

How the MLS Works and What It Does Well

The Multiple Listing Service is the backbone of traditional real estate. When a homeowner hires a listing agent to sell their property, the agent enters the details into the local MLS, which then distributes the listing to every major real estate website. This gives the property maximum exposure to the buying public. For sellers, this competition among buyers typically drives the sale price higher. For buyers, the MLS provides transparency: you can see the asking price, days on market, price reductions, comparable sales, and property details all in one place.

For investors, the MLS has some clear advantages. The information is standardized, easily searchable, and updated in real time. You can filter by price range, property type, location, days on market, and dozens of other criteria. Properties listed on the MLS typically come with seller disclosures, and the transaction process is well-defined. If you are financing your purchase, lenders are comfortable with MLS transactions because the properties have been appraised and inspected through established channels.

The downside for investors is equally clear: you are competing with every other buyer in the market. In popular Florida markets, even with the recent softening, well-priced properties can still attract multiple offers. The MLS is also where retail buyers shop, and retail buyers are often willing to pay more than an investor would because they are buying a home to live in, not a property to flip or rent. This means the MLS tends to push prices toward full market value, which compresses profit margins for investors whose strategy depends on buying at a discount.

There is also the question of timing. Properties that sit on the MLS for extended periods often have something wrong with them, whether that is an inflated price, a problem with the property itself, or a challenging location. The best MLS deals tend to be properties that were just listed with realistic pricing, and those get scooped up quickly. If you are not checking listings daily and ready to move fast, the MLS can feel like a game of musical chairs where the music stops before you sit down.

The Off-Market Landscape: What It Includes and Why It Matters

The term “off-market” gets used loosely, so it helps to define what it actually covers. An off-market property is any property that is being sold (or could be sold) without being listed on the MLS. This is not a single category. It is a broad umbrella that includes several distinct types of deals, each with its own sourcing method, risk profile, and potential return.

Foreclosure auctions are one of the most well-known forms of off-market investing. When a homeowner defaults on their mortgage, the lender eventually takes the property to auction. In Florida, foreclosures go through the court system (it is a judicial foreclosure state), and properties are sold on the courthouse steps or through online auction platforms. According to ATTOM’s 2025 year-end data, foreclosure filings were reported on over 367,000 U.S. properties in 2025, up 14% from 2024. Florida had the worst foreclosure rate of any state, with one in every 230 housing units affected. Texas and Florida each recorded over 34,000 foreclosure starts, more than any other states. The average time to complete a foreclosure nationally was 592 days in Q4 2025, which means properties entering the pipeline today could be at auction within the next one to two years.

Tax deed sales are another major off-market channel, and one that is particularly active in Florida. When a property owner fails to pay property taxes for an extended period, the county can auction the property to recover the unpaid taxes. Unlike foreclosure auctions (which pay off the mortgage lender), tax deed sales pay off delinquent tax certificates. The opening bids at tax deed auctions are often dramatically below market value because they are based on the amount of unpaid taxes, not the property’s actual worth. However, as more investors have discovered this channel, competition at popular auctions has increased, and properties in desirable areas frequently sell for well above the opening bid.

Tax lien investing is a related but distinct strategy. Rather than buying the property itself, you purchase a certificate representing the unpaid tax debt. The property owner then has a set period to pay off that debt (plus interest to you). If they do not, you can eventually force the sale of the property. Tax lien certificates in Florida can earn interest rates up to 18%, making them attractive even if the property is never actually acquired.

Wholesale deals represent yet another off-market avenue. A wholesaler is an investor who finds distressed or motivated sellers, gets the property under contract at a low price, and then assigns that contract to another investor for a fee. The property never hits the MLS. Wholesaling is legal in Florida, but the quality of wholesale deals varies enormously depending on the wholesaler’s sourcing methods and their honesty about the property’s condition and value.

Finally, there are direct-to-seller deals where an investor approaches a property owner directly, often through direct mail, driving for dollars (physically scouting neighborhoods for distressed properties), or networking. These deals can produce the biggest discounts because there is no competition, no agent commissions, and no auction bidding war. But they require the most time, effort, and interpersonal skill to execute consistently.

Comparing the Two Approaches: Price, Competition, and Risk

The most obvious difference between MLS and off-market deals is price. MLS properties are priced by sellers and their agents to attract the highest possible sale price. Even in today’s softer Florida market, the median single-family home statewide is still around $415,000. Off-market properties, by contrast, are often available at significant discounts precisely because they are being sold under circumstances that prioritize speed or debt recovery over maximizing sale price. A tax deed property might sell for the amount of unpaid taxes (which could be a fraction of market value), and a motivated seller working with a wholesaler might accept 60 to 70 cents on the dollar just to get out from under a property quickly.

Competition is another key differentiator. On the MLS, you are competing with every buyer who has internet access and a Zillow account. Off-market deals are inherently less visible. They require specialized knowledge, access to auction calendars and county records, relationships with wholesalers, or the willingness to knock on doors and make cold calls. This friction reduces competition, which is exactly why off-market deals tend to offer better prices. The barriers to entry are not financial (you can attend a tax deed auction with a few thousand dollars). The barriers are informational and operational.

But lower prices and less competition come with higher risk. MLS properties typically come with seller disclosures, home inspections, and title insurance. The transaction follows a well-established process with built-in protections. Off-market deals, especially auction purchases, often come with none of these safeguards. Properties sold at foreclosure and tax deed auctions are sold “as-is” with no warranties. You may not be able to inspect the interior before buying. The title may have encumbrances that survive the sale. And if you are buying from a wholesaler, you are relying on their numbers and their honesty about the deal’s potential.

The timeline also differs significantly. An MLS purchase in Florida typically closes in 30 to 45 days, with financing, inspections, and appraisals built into the process. Off-market deals can close much faster (some auction purchases require full payment within 24 hours), but post-purchase steps like quiet title actions, eviction proceedings, or renovation work can add months before the property generates any return. Investors who are not prepared for these timelines can find themselves cash-strapped while waiting for a deal to reach its full potential.

Building an Off-Market Deal Pipeline in Florida

Finding off-market deals is not as simple as browsing a website (although tools like PropertyOnion.com have made it significantly easier by aggregating foreclosure, tax deed, and tax lien auction data into a single searchable platform). Building a consistent pipeline of off-market opportunities requires a combination of systems, relationships, and persistence.

For auction-based deals (foreclosures and tax deeds), the first step is getting familiar with your county’s auction schedule and process. Florida’s 67 counties each run their own auctions, and the timing, format, and rules vary. Some counties hold auctions weekly, others monthly. Most have moved to online platforms, but the registration requirements, deposit amounts, and payment deadlines are county-specific. Start by identifying three to five counties where you want to invest and learn the ins and outs of each one. Bookmark the county Clerk of Court websites, sign up for auction notifications, and start reviewing upcoming properties well before you plan to bid.

For wholesale deals, the key is building relationships with active wholesalers in your target markets. Attend local real estate investor association (REIA) meetings, join Facebook groups focused on Florida real estate investing, and let people know what types of properties you are looking for. The best wholesalers will bring you deals that match your criteria because it makes their job easier when they have reliable buyers. Be cautious, though. Not every wholesaler runs their numbers accurately, and some inflate after-repair values to make thin deals look attractive. Always verify the numbers independently before committing.

For direct-to-seller deals, you will need a marketing system. This usually involves direct mail campaigns targeting homeowners in specific situations: properties with code enforcement violations, owners in pre-foreclosure, vacant or abandoned properties, out-of-state owners, and probate situations. Driving for dollars (literally driving through neighborhoods and noting properties that appear distressed or neglected) is another classic approach that still works well. The response rates on direct mail are low, typically 1% to 3%, so consistency is important. The investors who succeed with this approach treat it as a numbers game and commit to sending mail every month.

Regardless of your sourcing method, the research process for any off-market deal follows the same core steps: verify the property’s legal description, check the title for liens and encumbrances, assess the property’s condition (at least from the exterior), determine the market value through comparable sales analysis, and calculate your maximum allowable offer based on your investment strategy. Skipping any of these steps in the name of speed is how investors lose money.

When the MLS Actually Makes More Sense

For all the advantages of off-market investing, there are situations where buying through the MLS is the smarter play. If you are a newer investor who is still learning how to evaluate deals, the MLS provides a safer environment with more built-in protections. Seller disclosures, home inspections, and the ability to negotiate repairs give you a margin of safety that simply does not exist at a foreclosure auction.

The MLS also makes more sense when you are pursuing a buy-and-hold rental strategy in a market with strong fundamentals. In parts of Florida where rental demand is high and prices have softened, you may be able to find turnkey or near-turnkey properties on the MLS that cash flow from day one without requiring the extensive renovation or legal work that many off-market deals demand. When you factor in the time value of money (a property that starts generating rental income immediately versus one that sits vacant for six months while you complete a quiet title action and renovation), the MLS deal can sometimes deliver a better overall return.

Additionally, if you are using conventional financing, the MLS is almost always the easier path. Lenders want appraisals, inspections, and clean title. Auction properties often cannot meet these requirements immediately, which means you need to buy with cash and refinance later. If you do not have significant cash reserves, the MLS offers a more accessible entry point into real estate investing.

The best investors do not think of MLS and off-market as an either/or choice. They use both channels and allocate their time and capital based on where the best risk-adjusted returns are at any given moment. In a market where MLS inventory is tight and prices are high, they lean heavily into off-market sourcing. In a market like today’s Florida, where inventory is rising and prices are softening, they might split their attention more evenly because MLS deals are finally starting to pencil out again.

Putting It All Together

The Florida real estate market is in a period of transition, and that transition is creating opportunity on both sides of the MLS divide. On the traditional listing side, rising inventory and moderating prices mean investors can negotiate better terms than they have been able to in years. On the off-market side, financial pressures on homeowners (from insurance costs to HOA fees to mortgage rate resets) are feeding a growing pipeline of distressed and motivated sellers.

The data supports the case for paying attention to both channels. With 123,000 off-market transactions in Florida in a single year, and with foreclosure activity continuing to climb statewide, the off-market pipeline is not some niche backwater. It is a significant and growing part of the market. At the same time, with 255,012 existing single-family home sales closed through traditional channels in 2025, the MLS remains by far the largest marketplace for Florida real estate.

The investors who consistently find the best deals are the ones who cast the widest net. They monitor the MLS for price reductions and days-on-market anomalies. They track upcoming foreclosure and tax deed auctions through tools like PropertyOnion.com. They build relationships with wholesalers. They send direct mail. And they evaluate every potential deal using the same disciplined underwriting process, regardless of where the deal originated.

Whether you are a first-time investor trying to find your footing or an experienced pro looking to expand your deal flow, the key takeaway is this: the MLS is a starting point, not the finish line. The most profitable real estate investments in Florida are increasingly found in the spaces between the traditional listings, in courthouses, county databases, auction platforms, and direct conversations with motivated sellers. The tools and information to access these deals are more available than ever. The only question is whether you are willing to put in the work to find them.