It was a cold, dark evening as the moon crept behind the horizon and a bitter wind whipped through empty streets. Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free OK, I’ll drop the melodrama. It was actually sometime in late April and rather pleasant outside if I remember correctly. My brother Phillip walked up to me and asked whether I had seen this package of 97 houses yet. “Oh yes, I’ve seen that. It’s all garbage,” I replied. A day or two before, I had been emailed a package of 93 houses. After skimming through them and finding little more than 43rd and Skid Row, 29th and War Zone, and 35th and Hood, I had decided to pass without an offer. “I don’t think these are garbage,” my brother replied. A few weeks before, a commercial real estate agent representing Quik Trip had gotten in contact with Phillip about trying to buy a house of ours nearby so that Quik Trip could expand its parking lot. We, however, had little interest in selling. They made a low ball offer, and my brother declined. So they made a second, more reasonable offer, and my brother went into full-brat mode and again declined without a counter. “Just make a counter,” the agent pleaded. “We don’t want to sell. We’ll listen to any offer, but we just don’t feel that’s high enough.” We were thinking at the time that maybe they would come up substantially above market value, but if they didn’t, we really had no interest in selling that well-performing property. Our business is buy and hold. However, one thing can lead to another, and this particular situation led to a quick conversation between Phillip and the agent about what we did. Basically, we buy lots of houses and small multifamily properties and then fix them up and rent them out. This conversation turned out to be important. A week or so later, that same agent sent my brother a list of 97 properties and asked if we would have any interest. Remember, this was a commercial agent. The way he came across this deal was that his cousin (who is also an agent) had posted a short note about it on Facebook, and he immediately thought of us due to the conversation he had with Phillip. As I glanced through the list, I was rather astonished. Almost every large package I have seen has been a worthless blob of garbage. But these properties were all in the areas we liked to purchase and were listed at an attractive price as well. The only problem is that it’s not easy to come up with several million dollars all at once, and the seller was intent on a cash offer because he wanted to do a 1031 exchange to avoid taxable gain on the sale. Still, it was worth pursuing further. Evaluating the Deal I went out to look at two of the properties the seller was turning over and was generally impressed with the quality: two-tone paint, nice carpet, tile floors and countertops, quality appliances, etc. He had also provided pictures of each house, and they all looked good to me. I asked for any financial information and reviewed it. I came up with a pro forma for the properties, and it looked like it had performed quite well and would make for a great investment if we could pull it off. So we started looking for potential equity investors. Unfortunately, the only one we knew who could do such a deal wanted an arm and a leg. It just didn't make sense for us to try to purchase this deal unless we could keep a sizeable percentage of the deal. And while we could bring some money to the table, we didn't want to drain any cash reserves we had just to make it happen. Furthermore, we would need a loan for 75 percent, and the seller wanted a cash only deal. (And there aren't many lenders who would do a 97-property deal anyway.) Related: How I Bought, Rehabbed, Rented and Refinanced 14 Properties at Once We then asked to meet the seller at our office and go over the deal with him. Maybe we could convince him to consider a financed deal. The seller was an extremely impressive guy. In fact, he had just sold a large piece of land in Lenexa, KS for several million dollars. In the past, he had bought and sold hotels, built luxury villas on the Plaza (the most expensive part of Kansas City), and had tried out just about everything else in real estate. While we gained a lot of important information about the properties from him, the most important part was that we were able to sell ourselves. We believe we were the only potential buyer interested in holding the entire portfolio for the long term, and this appealed to the seller. Much of our meeting actually involved us making the case that we were quality property managers and would continue to take good care of the properties he would (hopefully) be selling us. Meeting with the seller is critical. It allows you to build rapport and trust, as well as figure out what the seller is really after. If you remember Grant Cardone’s BiggerPockets Podcast episode, he got a big apartment deal by flying out to meet with the seller when no one else did. Indeed, my dad even told me to drop off our first offer in person. So I called the agent and asked to drop off the offer at the seller’s office. He decided to come to our office, along with both agents and my brother. (Yes, that made for an awkward setting to make an offer.) Unfortunately, at the time, the only equity partner we had available still wanted that arm and the leg as well, so we couldn’t make a strong offer and we still needed a loan. At this point, we thought the deal was probably dead. Tenants in Common to the Rescue Then two important things happened. The first was our agent brought us in contact with someone who had just sold their commercial property and needed something to 1031 into. Unfortunately, they thought that you couldn’t 1031 into a partnership like this one. However, a friend of mine who is a very successful investor had previously mentioned to me something about doing partnerships with people doing 1031s. So I called him up and asked how. The answer was a “Tenants in Common.” The difference between Tenants in Common and a partnership sounds trivial, but in this case, it is huge. Basically, in a partnership, each partner owns 50% of the entire property. In a Tenants in Common, one tenant owns half the building and the other owns the other half. In a more graphic sense, imagine a chainsaw. OK, you got it. In this way, a Tenants in Common agreement allows the person who sold their previous property to simply buy half of the new property, thereby allowing the 1031 to work and for them to defer their taxes. All of a sudden (well, it actually took about three meetings and several conversations with an attorney), we had found an equity partner tenant in common. I should also note that we found another group that was interested in the deal who we came into contact with after our podcast on BiggerPockets, but we decided to go with the first group. Hopefully we will find a project to work on with them in the future, but it does make the point: Stay active on BiggerPockets, folks. There are critical contacts to be made here! The second important thing was that the seller decided that he was open to seller financing. While we would have been fine with bank financing too, this allowed us to put up enough money to get the deal done without having to compete on a cash only basis. One of the stipulations from the seller was that he didn’t want 97 appraisals (for obvious logistical reasons). But due diligence is still extremely important. In this case, we viewed any turnovers he had come up, but I also selected a handful of houses at random to get a good feel for the portfolio. We also did a drive-by evaluation of all of the remaining properties. They were virtually all in good shape. So we had a deal. Well, more like we had an agreement. Four months, a bunch of due diligence, many contract revisions, and a whole lot of preparation and conversations later, we became the proud new owners of 97 houses spread throughout Kansas City, MO. Lessons Learned The first thing that is critical to observe is that there is almost no way we could have done this even two years ago. Success builds on itself, and we had built an infrastructure to handle bringing on 97 new properties. Don’t make the mistake of trying to grow from 0 to 100 overnight. But once you’ve built a solid foundation, then you can take advantage of all sorts of opportunities that wouldn’t have been available before. Related: The Ultimate List of Ways to Finance Buy & Hold Property The second thing is to always meet with the seller in person whenever possible, particularly for larger deals. I don’t know what the other offers the seller received were, but from what I can tell, our offer wasn’t better on paper than them. It wasn’t worse either, but what appeared to make the seller choose us over the other otherwise indistinguishable offers is that we had built rapport and sold ourselves as a quality property management company that would continue to take good care of these properties just as he had done for all those years. Finally, make sure to network, network, network. If we only had networked with the one potential equity investor mentioned at the beginning, we couldn’t have put together a good enough offer because that investor wanted too much. Even with the second group, if I hadn’t known those other successful investors and talked to them about their business thoroughly, I might have just taken it as fact that they couldn’t 1031 into this deal. So make sure to be active on BiggerPockets, go to your local real estate clubs, and always be networking with people in the real estate field. And be ready–you never know when that big deal may come around. What’s the largest deal you’ve ever executed? Have questions about branching into multi-property packages like this? Leave all your comments below!