The # 1 Way to Find Apartment Building Deals<\/h2>\n
The best and most efficient way to find great apartment building deals is\u00a0through a good network of commercial real estate (CRE) brokers<\/strong>.<\/p>\n CRE brokers make it their business to find deals. The good ones send postcards and letters to apartment building owners and build the relationship years before an owner wants to sell. They network extensively and beat the pavement to get listings and buyers.<\/p>\n For example, a Marcus & Millichap broker is offering to do an informal \u201cappraisal\u201d of my buildings to assess what they\u2019re worth. All he\u2019s asking for is the financials to do so, no strings attached.<\/p>\n Smart. We get to know each other and maybe start to trust each other. He may gain a listing down the road, or I may be one of his buyers.<\/p>\n Unfortunately, most brokers are not that good. But the few that are that good are worth their weight in gold.<\/p>\n I remember when I was marketing for deals in Texas after taking my first apartment building boot camp. While I did send out letters (a lot of work, and I didn\u2019t get a single deal out of several months of marketing!), I focused heavily on cold-calling CRE brokers. Over several weeks of this, I noticed that a few brokers actually took me seriously and had deals on a more regular basis and communicated frequently, while most did none of these things. I found one broker in particular who fed me deals almost on a weekly basis.<\/p>\n Focus your efforts on finding just two to three brokers who are prolific deal-makers and who take you seriously, and you are set for the rest of your real estate investing career.<\/p>\n One of the best ways to find potential brokers to work with is on LoopNet. OK, I hear you saying, \u201cLoopNet is worthless for finding deals,” and that is mostly true, but it\u2019s a gold mine for finding good CRE brokers.<\/p>\n I go on www.LoopNet.com<\/a> (it\u2019s free to create an account), and then I search for the kind of buildings I want to buy. I create a spreadsheet and capture the contact info of each of the CRE brokers who have listings. After doing several, I see some brokers over and over again, and I track how many listings a broker has. The more listings, the better.<\/p>\n I then cold-call the brokers. I normally say something like, \u201cI saw your listing on LoopNet, and that deal doesn\u2019t really work for me, but here\u2019s what I\u2019m looking for. What else do you have?\u201d I may tell him what I\u2019m looking for and learn a little about him, too. Then I see how he interacts with me and what his deal flow is.<\/p>\n I find an in-person meeting is a good next step if you think the broker is one of the better ones.<\/p>\n I track all of this activity. Over time, you see a few brokers bubble to the top.<\/p>\n In addition to finding the few brokers that will feed you deals, it is important to be responsive when they do send you a deal. Nothing cools a relationship faster than a lack of response.<\/p>\n What I mean by \u201cresponse\u201d is that you respond to the broker with feedback about EVERY deal they send you. This means you have to get fast at analyzing a deal<\/a>. But it\u2019s not enough to just answer the question, \u201cIs it a deal or not?\u201d (Because 99% of deals are not based on the asking price!) The real question to answer is, \u201cWhat is the MOST I would pay for this, and why?\u201d That is what is most helpful to the broker. Using my deal analyzer spreadsheet, I’ve gotten my first analysis down from 4 hours to about 15 minutes — very useful.<\/p>\n![\"metric-evaluate-apartment\"](\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2016\/10\/metric-evaluate-apartment.jpg\" "\\"\\"")
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\nRelated:<\/strong> How a Small Apartment Building Made Me $40,000\/Year<\/a><\/em><\/p>\nHow Do You Find Good CRE Brokers?<\/h2>\n
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<\/p>\nThe Key to Maintaining Good Deal Flow<\/h2>\n