Commercial Real Estate

How to NOT Sound Like a Multifamily Newbie (& Actually Land Deals!)

Expertise: Business Management, Commercial Real Estate, Landlording & Rental Properties, Real Estate Deal Analysis & Advice, Mortgages & Creative Financing, Personal Development, Real Estate Investing Basics
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You’ve decided to get started with apartment building investing, and you’re excitedly calling brokers. But you’re stumped by these two questions you get over and over again:

  • What is your capacity to buy this property?
  • What multifamily experience do you have?

You don’t have the cash or experience, so how do you respond?

Let’s think about why you’re getting these questions. It’s because you sound like a newbie.

But it doesn’t have to be this way. I’m going to show you a technique that will avoid these kinds of questions 85 percent of the time.

multifamily

Here’s What a Newbie Sounds Like

Brokers deal with newbies and tire kickers every day. Over the years, they’ve been thoroughly trained to spot and handle them. Once they identify you as a newbie, it’s difficult (and time consuming) to change their perception of you.

Many newbies will contact a commercial real estate broker and say something like this: “Hi, my name is Sam, and I’m interested in purchasing multi-unit properties with solid returns. Can you send me over some deals?”

Related: 3 Simple Steps to Increase the Value of Your Multifamily Property

First of all, you’re not using the right language. And second, you’re not proactively addressing the two main questions every broker has when a new investor calls in: Do they have the money and do they have the experience? In other words, can they close?

I’m going to show you how a little bit of training can make all the difference so you are NOT perceived as a newbie.

How to NOT Sound Like a Newbie

Instead, say something like the following: “I work with a group of high net worth individuals, and we are expanding into the Atlanta market. We already have property management company XYZ on board and are continuing to build our team locally. We’re looking for deals in the $1M to $2.5M range with at least an 8% cap rate on actuals, and we would consider light to medium renovations but no re-positions. Is there anything you have in your pipeline that you can send over for me to review?”

Here’s what you’ve done:

  1. You addressed the money part because you say you’re working with high net worth individuals, implying that you have the means to close.
  2. You addressed the experience part because you’re working with a property management company, and you say you’re “expanding,” implying that you already have property elsewhere.
  3. You’re using the right language like “cap rate” and “re-position” (lingo for “really big renovation”).

Educate Yourself and Use Scripts

The bottom-line is this: If you don’t want to sound like a newbie, educate yourself so that you’re using the right language. To educate yourself, read books, buy a course, or attend a seminar. Learn the language and basic financial concepts. In fact, one of the best things you can do is to learn how to analyze apartment building deals. The more you do, the less you sound like a newbie, and the higher your confidence grows.

Related: The Real (Often Overlooked) Reason Many Multifamily Investments Fail

And then use scripts so that when you email or call the broker for the first time, you’re proactively addressing their main concern: “Can this person close and should I take them seriously?”

By educating yourself and using the right script, you communicate to the broker that you have the means to close and have a team in place that can close and manage the property. As a result, you’ll be taken more seriously, brokers will return your phone calls, and you’ll do your first deal faster.

[Editor’s Note: We are republishing this article to include the author’s video. Let us know what you think with a comment!]

How do you overcome your lack of experience when trying to land deals?

Share some other tips and tricks you’ve used to be taken seriously by commercial real estate brokers!

Michael Blank is a leading authority on apartment building investing in the United States. He’s passionate about helping others become financially free in 3-5 years by investing in apartment building deals with a special focus on raising money. Through his investment company, he controls over $30MM in performing multifamily assets all over the United States and has raised over $8MM. In addition to his own investing activities, he’s helped students purchase over 2,000 units valued at over $87MM. He’s the author of the best-selling book Financial Freedom With Real Estate Investing and the host of the popular Apartment Building Investing podcast Apartment Building Investing podcast.

    Sam White Rental Property Investor from Dallas, TX
    Replied over 3 years ago
    Hey Michael, I have been following your posts for a year now and have attended a few of your webinars. I secured a capital funder about 3 months ago. Able to look in the 1MM-1.5MM range, which puts us in the 20-50 unit range in Dallas market, so it seems. Right now, I feel as I am not efficiently finding deals, because I am finding them on loopnet, etc. and from my residential experience, I know that finding flips on Trulia/MLS is OK but not the creme of the crop deal. 1) How can I hustle and position myself to find owners who want to sell but have not hit the market? 2) Is buying existing better? Have a few 20 unit zoned lots in my area, but I know little about building (which has not stopped me yet, would just be new avenue to explore) Thanks for the great info! Sam
    Gabriel Godet from George Town, Cayman Islands
    Replied over 3 years ago
    Hey Sam, Would you giving me some tips on getting an investor? Also, did you put any funds into the deal and what are some of the objections the investor had? Would really appreciate any advice! Thank you, Gabriel
    Michael Blank Rental Property Investor from Northern Virginia, VA
    Replied over 3 years ago
    Hi Sam – thanks for your message! The best way to find deals is still brokers, but it will take a while to earn their trust so that they give you off-market or pocket listings – THAT’S the holy grail and what you’re shooting for. And you said it, you’ll have to hustle. Maybe this article might also be helpful: https://www.biggerpockets.com/renewsblog/2014/03/03/find-great-apartment-building-deals/
    John Casmon from Chicago, Illinois
    Replied over 3 years ago
    Great post, Michael! Newbie or not, the script is a great way to position yourself as a priority and serious investor with brokers. Thanks for sharing!
    James EuDaly from Kansas City, Missouri
    Replied over 3 years ago
    Great post Michael, thanks for sharing! Additionally having the right mindset can be very beneficial, such that the person (broker) has a property to sell (a problem) and you have the best solution (a great team, investors chomping at the bit, etc)! Be sure to think through what you answers to their objections will be, but ultimately try to be as authentic as possible.
    Alex Chin from Seattle, Washington
    Replied over 3 years ago
    Another tip: If you’ll be self-managing the property, but want to sound more professional about it, you talk about your company’s “in-house management team”.
    Lane Kawaoka Rental Property Investor from Honolulu, HAWAII (HI)
    Replied over 3 years ago
    @alex If your going to commercial lending 8+ units. I believe saying you have in-house management will work to your disadvantage. They want professionals.
    Leo Satchell
    Replied over 3 years ago
    Hi Alex, sounds like a great Idea, thanks for the valuable information.
    Benjamin Cowles from Cape Coral, FL
    Replied over 3 years ago
    Timely post for myself. Thank you. I sound just like that first example, maybe worse lol. But it sounds like instead of advertising your own vague newbie worth you have to advertise the end result, all the seasoned pros who’ll ultimately get you from A to Z. But then so you need to plan some. Doing my best currently to be honest but not illustrate too much my current picture of me scrambling around trying to figure this business out.
    Ayodeji Kuponiyi Investor from King of Prussia, Pennsylvania
    Replied almost 3 years ago
    Very timely post for me as well. Thanks for sharing this Michael!
    Pat Riley Commercial Real Estate Broker from Seattle, Washington
    Replied almost 3 years ago
    As a commercial broker myself I couldn’t agree with you more. For active listings, brokers want to know that you have already driven by the property and want to know your (investor) feedback, then if you’re still interested they will be happy to show you the building. If there’s a marketing package take time to look it over thoroughly and educate yourself on the property. If you ask questions that have the answers in the package you come across as a “newbie” or “waste of time”.
    Gavin Walker Investor from Sandy, Utah
    Replied almost 3 years ago
    Thank you for the insights. Much appreciated.
    Loren Oatman from East Syracuse, New York
    Replied almost 3 years ago
    Thank you. This was very helpfull.
    Jared Samsel Rental Property Investor from Minot, North Dakota
    Replied almost 3 years ago
    @BrayanMartinez Check this post out. Talks about what lingo to use when we talk to brokers.
    Marcelito Salvatus from sunland, California
    Replied over 2 years ago
    Hi Michael, You mentioned that you can be on the Board of Advisor when looking for deals, how do I contact you? Thank you.
    Michael Blank Rental Property Investor from Northern Virginia, VA
    Replied over 2 years ago
    Hi Marcelito – if you are at at least a student of the Ultimate Guide to Buying Apartment Buildings course (ultimateapartmentinvestingguide.com), I give you a cover letter you can use with my bio for your advisory board. Hope that helps!
    Abe B.
    Replied about 2 years ago
    Thank you Michael! I am still new, so can’t help but wonder, What’s the difference between renovations, and reposition. And why wouldn’t I want repositions? Thanks! Keep it up!
    Mike Tolani
    Replied almost 2 years ago
    Thank you Michael for the article. I am looking to join MF investing and would have never thought of the script method. Thanks again for the help and look forward to learning more from the community!