Commercial Real Estate

There Are Still Deals Out There (for Now)—Here’s Where to Find Them

Expertise: Personal Development, Commercial Real Estate, Real Estate News & Commentary, Landlording & Rental Properties
69 Articles Written
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I talk to dozens of real estate investors every month. One of the common themes is their inability to get deals these days. They’re spending an enormous amount of time chasing deals of all shapes and sizes… and usually coming up empty.

And when they do get an opportunity, it’s usually overpriced. Or they’re outbid.

You see this is not a game that can be played part time. In this market, you won’t succeed by looking for deals on lunch breaks, evenings, and weekends. Many large operators have more cash than deals, and some of them don’t know how to fix this problem. Except through overpaying. (Please don’t invest in a deal like this!)

I feel like I’m beating a dead horse, but I’ve warned investors in post after post (after post) not to overpay.

The best operators and investors don’t overpay. Some others do. Many will pay a stiff price for their actions. It’s a seller’s market out there, and it’s tough for all of us.

Warren Buffett says,

“The best investors say no a lot. The very best investors say no almost all the time.”

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Well, almost all of us.

The Importance of Deal Pipelines

There are a handful of professional operators who have refined the art of the acquisition pipeline. And they’re getting an unfair advantage over the rest of us. 

Are you a weekend warrior? Are you spending your evenings and weekends and holidays and vacations spinning your wheels looking for a house to flip? Or a duplex? Or a mobile home park or self-storage facility?

I spoke to a West Coast investor this morning. He told me he recently spent 300 to 400 hours looking for an investment property. He ended up acquiring a triplex. And it’s apparently not that profitable.

How much free time do you have per day? Five hours tops? This investor just chewed up about 70 days of free time—to get what sounds like a marginal investment.

It’s hard to go up against professionals—not to mention the masses of amateurs who are driving up prices.

Going up against the pros is like options trading in your spare time. It can be a zero-sum game, and you’re playing against corporations with billions of dollars in Ivy League grads and machines. You will not win (or not very often, at least).

Some operators are just getting the upper hand over the rest.

My friend and operating partner, Matt, is one of those guys. Matt has a team of four guys working the phones full-time. Eight hours a day, five days a week, their sole purpose is to find deals.

They dial the numbers of thousands of mom-and-pop self-storage and mobile home park operators every week. They take notes. They follow up.

Week in and week out.

Month in and month out.

Year in and year out.

By being there, being consistent, being empathetic, and being skilled, they are able to find multiple deals every month—opportunities that other operators and brokers won’t get a shot at.

Related: 27 Ways to Find Real Estate Deals

Case in Point

Matt contacted the 88-year-old owner/operator of a Michigan mobile home community over seven years ago. He wasn’t interested in selling. But Matt stayed in touch every few months for the last seven years.

Matt’s phone rang two days ago. It was the niece of the now 95-year-old park owner. She said that he was done. He could no longer operate the park. She went on…

Niece: “Is your offer from 2017 still on the table?”

Matt: “Uh, yes. Is that price workable for you?” (Prices have climbed a lot since 2017.)

Niece: “Yes. Let’s get a contract signed.”

When I spoke to Matt yesterday, he was already on the ground in Michigan.

mobile-home-investing-cons

My friends, deals like these are not for casual seekers. Deals like these are the spoils rewarding those with a plan. Those with a well-established team. Those who follow up consistently. Those who speak to mom-and-pop sellers with empathy and skill.

(Contact me to get my free special report on acquiring mobile home parks from mom-and-pop operators and more.)

You and I don’t have to have a team like Matt’s to benefit from their diligent efforts. We can get access to the fruits of their labors from the comfort of our own homes. And we can enjoy the tax benefits of direct ownership in recession-resistant commercial real estate assets like these.

The Decision to Invest Passively

In the past, I wrote a post explaining how many smart real estate investors are getting access to these deals by going passive.

Yes, I agree that passive investors don’t get the thrill of the chase. But passive real estate investors also don’t get…

  • the massive time commitment involved with real estate investing.
  • the debt involved in their name.
  • the 3am calls dealing with toilets, tenants, and trash.
  • hundreds of other challenges that often consume nights, weekends, and vacations.

And while there are no guarantees, passive investors who select a carefully vetted operator often get access to better returns and equity growth—with all of the same tax advantages.

Related: 4 Major Commercial Investing Strategies Explained

Before this went to press, Matt called me again and told me he got another off-market deal. This one is in a north-central U.S. state. In a similar way to the other deal, he had been staying in touch with the owner. The owner had a dispute with his partner, and there is potential litigation. The guy knew just who to call when things went south.

This 300-plus-unit self-storage facility is only 70 percent occupied and in need of some TLC. This is the perfect situation for Matt to step into. His plan is to bring occupancy to 90 percent and do the deferred maintenance. This will significantly increase net operating income, value, and accelerate investors’ equity.

Storage facilities with blue doors. Interior units. 3d rendering

Matt’s passive investors enjoy the returns of his labors. He’s actually given investors over 60 percent IRRs for the past few years—a number that was independently verified by a ratings firm. My wife and I are among his investors, and my firm and our investors are investing heavily with Matt.

We spent a lot of time and effort vetting Matt up front. But now the hard work is in Matt’s court. And he does it very well.

Buying from a mom-and-pop and upgrading to REIT standards is a powerful operational strategy. But it won’t last forever.

The last WWI veteran died a number of years ago, and there are no more on the planet. In the same way, mom and pop-owned assets are being gobbled up, and eventually this strategy won’t be in play.

We are excited to be part of making hay while the sun shines. It’s shining on passive commercial real estate investors right now. Is it shining on you?

Are you investing in commercial real estate currently? How’s it going? Are you considering making the leap into commercial? Do you have any questions for me? 

Let’s talk in the comment section below. 

After graduating with an engineering degree and then an MBA from Ohio State, Paul started on the management development track at Ford Motor Company in Detroit. After five years, he departed to start a staffing company with a partner. They sold it to a publicly traded firm for $2.9 million five years later. Along the way, Paul was Finalist for Ernst & Young's Michigan Entrepreneur of the Year two years straight. Paul later entered the real estate sector, where he completed 85 real estate investments and exits, appeared on an HGTV Special, rehabbed and managed dozens of rental properties, developed a waterfront subdivision, and started two successful online real estate marketing firms. Three successful developments, including assisting with development of a Hyatt hotel and a multifamily housing project, led him into the multifamily investment arena. Paul co-hosts a wealth-building podcast called How to Lose Money and is a frequent contributor to BiggerPockets, producing live video and blog content on a weekly basis. Paul is the author of The Perfect Investment—Create Enduring Wealth from the Historic Shift to Multifamily Housing (2016) and is the Managing Director of two commercial real estate funds at Wellings Capital.

    Joseph Ryan from Mcallen, TX
    Replied about 1 month ago
    Misleading title. A more appropriate title would be something more relating to passive real estate investing.
    Paul Moore Rental Property Investor from Lynchburg, VA
    Replied about 1 month ago
    Thanks for the comment, Joseph. I hope the post was helfpul anyway.
    Farris Gosea
    Replied about 1 month ago
    Yeah just go online to tax records pull names and make some calls. I agree did my last few deals this way. A lot better than waiting for something to pop up and too many people trying to buy it.
    Paul Moore Rental Property Investor from Lynchburg, VA
    Replied about 1 month ago
    Farris, Yes, this is a long path for the diligent investor/operator.
    Cass Eversull Developer from Benson Arizona
    Replied about 1 month ago
    I keep hearing this theme, there are more investors and investment money available but lack of deals. I have found it to be the opposite in Commercial RE. We have been working on a great value-add deal in Southern Arizona and have had difficulty to locating or even presenting our deal to qualified "commercial" partner for our project. For us commercial RE has many opportunities and much higher profits and profit centers than the residential side, and is not saturated like Residential. To understand commercial RE (retail, hotels, strip centers, RV Parks) you have to understand business and real estate, which many people do not want to pursue. The commercial property or location is only as valuable as the product or service you are going to provide or build.
    Paul Moore Rental Property Investor from Lynchburg, VA
    Replied about 1 month ago
    Cass, I'm glad to hear that you're finding deals. They are really hard to come by these days, and as you said, residential is the hardest place to find a reasonable deal. Best wishes! Paul
    Derik Lewis
    Replied about 1 month ago
    Seems like a pitch to push people into passive investing. Not that helpful.
    Paul Moore Rental Property Investor from Lynchburg, VA
    Replied about 1 month ago
    Thank you, Derik. Like I said, it is a shark's game right now, and if you are not in this fulltime and dedicated, it will be very hard to make this work.
    Michael Liebrum Contractor from Nacogdoches, TX
    Replied about 1 month ago
    I really enjoyed this post and the insight you brought to the current market climate.
    Paul Moore Rental Property Investor from Lynchburg, VA
    Replied about 1 month ago
    Thanks so much, Michael. I appreciate it.
    Cass Eversull Developer from Benson Arizona
    Replied about 1 month ago
    "THE DEAL IS IN THE NUMBERS"! is a great quote I use-- Paul, yes we have several deals in our pipeline--its takes work though--no house or Commercial Property has a sign on it saying "I MAKE MONEY", you have to do the work and run the numbers on each deal to see if it has merit to continue the due diligence process. if not move on. On our current deal we ran the numbers on over 250 deals, & properties to locate the deal we currently working in Arizona. But with that knowledge in a specific area and comps you can get a great idea of what your potential profits could be short term and long term. The due diligence on Commercial Properties is extensive and 5x's the work as residential and 5x's the cost (our appraisals cost $3,000 to $5,000 compared to $350 on a house--but the returns are much larger and more opportunities!
    Richard Keiger
    Replied about 1 month ago
    It sounds like you're saying "You can't do it on your own, so do don't even try. Invest passively instead. It's your only option". So just the opposite of what has been said in every article I've read and every podcast I've heard on bigger pockets.
    Paul Moore Rental Property Investor from Lynchburg, VA
    Replied about 1 month ago
    Richard. Thanks for your comment. What I am saying actually is that right now, it is very hard out there. And if you are not doing this full-time, with a strategy to find deals, and often a team that knows how to do this, it will be extremely hard. And many are overpaying for assets as a result. I talk to dozens of investors every month and this is what most of them are saying. And so is my mastermind, which is full of smart veterans. I wish you the very best and hope that I am wrong. Sincerely.
    Kevin Miller
    Replied about 1 month ago
    Opened escrow today on a 10 unit,‘they’re out there!
    Paul Moore Rental Property Investor from Lynchburg, VA
    Replied about 1 month ago
    Congratulations Kevin! Very happy for you.
    Amy Williams
    Replied about 1 month ago
    I agree with Richard. Not quite to article I expected to see in my email from BiggerPockets. Just when I'm ramping up, I guess I'm too late and should be throwing in the towel. Should I even bother reading another article encouraging us 'little people'? lol
    Paul Moore Rental Property Investor from Lynchburg, VA
    Replied about 1 month ago
    Amy, Don't fear! You are in the same boat with Warren Buffett and many other top investors. Thought Buffett is a wizard, he still reads 500+ pages plus per day to grow his knowledge. And he is keeping his cash ready for upcoming deals. It's not a bad idea to wait for the market to turn. That's when people get very wealthy. Keep growing your knowledge and you will have your opportunity when the time is right.
    Sid Shankar Rental Property Investor from Chicago, IL
    Replied about 1 month ago
    Can you connect/introduce me to Matt to explore the opportunity of passively investing with him. Thanks
    Paul Moore Rental Property Investor from Lynchburg, VA
    Replied about 1 month ago
    Hi Sid, Please reach out to me on my profile page and we can discuss that. Thanks.
    Spenser Overton
    Replied about 1 month ago
    Matt, thank you for the article. I agree with your points regarding the challenge of balancing time and having a team to find deals. As I peel back the layers of real estate investing and look further into making my first investment, I'm finding passive investing to be more and more appealing, at least as our investment to get more comfortable with the ebbs and flows of the market and learn what works well and what doesn't while building out our network. Could you connect me with Matt to explore what opportunities he has available for additional investing?
    Paul Moore Rental Property Investor from Lynchburg, VA
    Replied about 1 month ago
    Hi Spenser. Let's have a conversation. I can be reached on my profile page. I will be glad to help you get connected to Matt's investments.
    Brad Shepherd Syndicator from Austin, TX
    Replied about 1 month ago
    I think this is a lesson that most solo operators learn over time. I spent a few years doing flips and guerrilla marketing, but finally realized it was just a job that I liked less than my day job where I get to deal with professionals all day. Commercial real estate co-syndication was the answer for me. I get to partner up with the full time operators that spend all day hunting great deals, and then provide great real estate investment opportunities to the sophisticated investors I work with regularly. I will always cheer on the folks willing to do house hacking and spend their weekends door knocking. The opportunity is still there for the taking no matter what. But once you have some cash or a network built up, I'll cheer just as loud when someone gets out of the grunt work scene.
    Paul Moore Rental Property Investor from Lynchburg, VA
    Replied about 1 month ago
    Brad. You nailed it! So we’ll said. That is exactly what I’m trying to tell people to save them months or years of hassle and pain. And loss. I’ll cheer everyone on, but I want to warn people, too.
    Joey Novak
    Replied about 1 month ago
    Paul, great article and so true. I spend a lot of time every day looking for deals and for the most part don't find anything worth my time.
    Paul Moore Rental Property Investor from Lynchburg, VA
    Replied about 1 month ago
    Thanks Joey. I talk to investors every week who say the same thing. It will eventually change.
    Terry Ellis Specialist from Omaha
    Replied 16 days ago
    Just how risky are these syndicated deals? I know that is a very vague question and like any investment the risk goes up with the increase of rewards. But generally are they about the same risk as if we were buying an apartment building ourselves? We were looking to invest in a syndication, while we start our real estate adventures, but we do not have enough knowledge (money is no problem) in the metrics to know if we are walking into field of beautiful flowers, or a field of land mines. Also, when my wife and I are gone, there is no continual passive income for our children (that is after the last syndicated investment projects time has ended) Any quick reads or vids to help us in our endeavors? I have been to your web sight Paul, and signed up but it didn't look like there was much to invest.
    Paul Moore Rental Property Investor from Lynchburg, VA
    Replied 14 days ago
    Thanks for writing, Terry. There are some asset classes, and in particular ways of acquisition and disposition in those asset classes, that provide a significant margin of safety (in the words of Buffett) for investors. I will be glad to provide some direction to assist you in this matter. I have a 200-page book that gives a fairly high-level overview of multifamily investing. I also have two special reports which discuss what and where and how to acquire assets with a margin of safety and (some) protection against recession. You can get all of those resources free at wellingscapital.com/resources. Then feel free to set up a call with me if that helps. You're asking the right questions!