Real Estate Investor · Orlando, FL · Member since 2012 · 28 posts · 1 vote
Which do you think is better to find multifamily deals, brokers or direct mail? The reason why I ask is most people tell me to deal with brokers, but brokers don't seem to have deals all the time so I feel as if I was on a stand still waiting for them to come up with something and most of the time when they do the deal doesn't make very good financial sense. Also I would like to work directly with sellers due to brokers not allowing me to speak with them. What do you all think?
It has always been my business philosophy to remain in control of my investments, including research, management, and sale. This is personal and what works best for me. Everyone must find his or her own methods and comfort that fit their business plan and time frame.
Moreover, I have never found anyone who is as thorough conducting research as I am.
In general, a broker is working against you (as an investor). In order to maximize their commission, they want the highest price. They'll only bring you a deal if they can't find a retail buyer.
You need to do your own marketing and have your own conversation with the sellers. From your comments, I think you were already coming to that conclusion...
Omayra Carroll generally, a broker isn't going to bring you a good off market deal until they know you and you've proven yourself as someone who can and will close. my best apt deal was brought to me by a broker. in this case, i had a pretty good working relationship with this broker ... he knew my investment criteria, knew i could close fast and was the first person he called. given i did as i said (closed fast hassle free), i was the first person he called with his next 3 off market deals.
in sum, its been my experience that brokers who knew me well, understood my needs, and understood my capabilities where the ones who brought me solid deals before they hit the market. this doesn't happen over night nor with a single phone call. it took time for they to know me and vice versa.
direct marketing works too for smaller properties (i invest in MF commercial >5 units) ... i've found one of my deals that way.
Do both so you can learn faster. I have only bought with a broker but I've chosen those in the investing arena that are smarter than me so I learn from them as I go.
Omayra Carroll I would recommend that before you talk to a broker that you talk to a bank or two. Get pre-approved so that when you do go to a broker they know that you are serious. Most brokers won't pay you any mind unless they know that you can perform. A pre-approval letter shows them that you can perform. It means that due diligence has already been done by a bank and that they've already looked over your finances. It also shows that you are serious if you've taken the time to gather all your financials and give them to a bank.
I tried to go to a couple of lenders and they would not even begin to deal with me unless I had a property under contract since I am dealing with Multifamily properties. Can you suggest any banks?
Omayra Carroll I would recommend you talk to small local banks. The big nationals generally won't give investors the time of day. A year before starting investing I opened a bank account with a local bank and kept significant deposits in that account while adding to them as much as possible. This gave me a good track record and made the bank interested in keeping me as a customer.
Speaking of direct marketing, is there an easy way to get a hold of a list of apartment complexes by the address by county in a given state? Any ideas? Thanks in advance.
I get my list directly from the county, some counties charge a fee, some you can just download the list yourself from their website after entering your criteria. I have found that Florida has some of the easiest sites to download the list from. Also if the state you want to get the list from doesn't have a way to do it online, send them an email and they will let you know what to do. That's how I get my list. Hope it helps.
Speaking of direct marketing, is there an easy way to get a hold of a list of apartment complexes by the address by county in a given state? Any ideas? Thanks in advance.
You can get such mailing list by different mailing list providers. they can easily help you with this. I have also purchased the mailing list from leadmonkeylists.com for my real estate business. It is very cheap in cost and also helps to generate effective leads in a short time.
You mentioned banks won't do preapprovals. I know firms that provide preapprovals. You can get up to 70%-80% LTV. You will need at least 10% of your own money on multifamily. Lenders want to know you have at least some "skin in the game." And the process is not as stringent as it is for regular funding approvals.
@Paul, Omayra, A decent public records search subscription can pull lists of MF's with purchase date range and sale price range etc. Everyone serious needs a public records search tool
I found agentpro247.com, gold service, $39/mo to be very good and the cheapest I've found. Some cost hundreds per month and are only available to title companies, lawyers, brokers etc. I've pulled <= 4 unit lists with 50% equity and sorted the spread sheet by state and mailed the out of state owners. Just mailed so no results. Same for >4 unit properties.
If you can't find deals yourself doesn't that answer your question? You should be working with a broker because I'd be willing to bet there are brokers in every market that have deals...maybe just not the brokers that you have worked with in the past. As a buyer it doesn't cost you anything to use a broker so why not use one?
What I wouldn't do is do both as mentioned above. What happens if you are working with a broker who is working hard for you and then you go around him with your direct mail campaign? How many more deals do you think that broker would want to bring you? Probably none.
I think your best bet is to use a broker and if you are not satisfied, get a different one. If not, do direct mail and find deals yourself but I personally wouldn't recommend doing both.
Several ways: buy from list brokers. Or subscribe to your own public records search. I subscribe to agentpro247.com the gold level costs me $39/mo which is a steal for true public records search where you can set the search criteria for mortgage amount, %equity, absentee owner, size of mortgage originally etc etc.