How to approach a broker for my first deal multifamily deal?

6 Replies

Hi All, 

I have been looking for my first multifamily deal, after listening to multiple BP podcasts I am convinced that the only way to find pocket listings is through brokers, but I am not sure how to approach one without any deals under my belt. 

Any suggestion on how to approach a broker so that they would like to work with a newbie is appreciated.

Thanks,

Deepa.

Good evening Deepa,

I would approach a broker with:

  • Timeframe in which you'd like to purchase your first property (i.e. 3 months, 1 year, "not sure"
  • Pre-approval letter: this will show the broker that you've taken action and have brought documents to a lender in order to learn your buying power.
    • **Not every broker needs to see this before taking a meeting with you but many brokers will not take you out on appointments until you've been pre-approved by an accredited lender.
  • Preferences: let the broker know what property type and target area you're considering and WHY. Get specific!
  • Tell them your 5-10-20 year plan. Any good broker will hear this and realize that you will be a long-term client and will treat you as such. You don't want a transactional broker who is only looking to make one deal with you and forget about you... You'd benefit from someone who is going to put in the time and effort to find you the right place to get/keep you on track fro your future investment goals.

Best of luck to you!

-Abel

@Deepa Akula Ummmmmm...cart before the horse. “Multifamily” could be a duplex or 100 units. How are you going to pay for it? Cash? Commerical loan? Planning to lead a syndication?

I guess my advice would be to be as specific as you can. “I wanna buy a multifamily” is different than “I’m interested in 10-20 unit apartment buildings for $800K up to my pre-qualification limit of $2.3m” which is different from “I wanna house-hack a triplex” which is different from “I’m looking for a seller who is willing to owner financing a deal with zero money down”.

And the same personal that trades in 20-unit apartments likely doesn’t work the duplex ecosystem...and vice versa...

Agreed with @Andrew Johnson , @Deepa Akula  .  2-4 units are treated much different than 5+ units. The concern any broker will have on larger deals is do you have the capability (I.e. funds) to close. Being a newb and wanting to meet with brokers, lead with your position and once you have a deal under contact you can find someone to partner/walk you through it and that someone needs to be someone other than the broker :) 

Originally posted by @Deepa Akula :

Hi All, 

I have been looking for my first multifamily deal, after listening to multiple BP podcasts I am convinced that the only way to find pocket listings is through brokers, but I am not sure how to approach one without any deals under my belt. 

Any suggestion on how to approach a broker so that they would like to work with a newbie is appreciated.

Thanks,

Deepa.

 Deepa,

Here are my 2 cents:

- Have a well defined criteria and understanding of what you are looking for.  A good broker should be able to guide you in your investment decisions in terms of giving you insights about different markets and asset classes, current trends in those markets, any other specialized info and statistics that they have access to and that is not publicly available. What a broker will not take seriously is someone not knowing how big a property they are looking for and why, what markets and sub-markets they want to invest in and why, and what strategy will they be pursuing and why.

- There's no problem in being a newbie, we all started as newbies. But you don't have to sound like one. Learn the lingo and "talk the talk".

- Build a team of professionals around you and leverage their experience. Before actively pursuing deals and talking to brokers you should already have in place a team of professionals (RE Attorney, REI focused CPA, Property Manager, Contractor, etc) that you can refer to as your investment team when talking to them. Leverage the power of "We".

Good luck!

@Deepa Akula

There is a lot of great advice here. One other tip is to use the “4 Most Important Words” when talking to brokers.

Think Multifamily Video link:

https://youtu.be/tU_rXk2uRLc

Originally posted by @Deepa Akula :

Hi All, 

I have been looking for my first multifamily deal, after listening to multiple BP podcasts I am convinced that the only way to find pocket listings is through brokers, but I am not sure how to approach one without any deals under my belt. 

Any suggestion on how to approach a broker so that they would like to work with a newbie is appreciated.

Thanks,

Deepa.

 If you PM me, I can give you an e-book I have put together on this exact topic.

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