I've found what I believe to be a good off market deal for a small apartment complex. This is my first apartment deal so I want to bring in partner(s) for capital as well as experience. However I've never pitched this type of deal. My concern is that if I pitch it to a bunch of investors someone might try and reach out to the seller and cut me out.
What would be the best practice here? Pitch the deal without giving the exact address or perhaps asking potential investors to sign some kind of document stating that they won't do anything with the specific property without me?
Has this ever happened to anyone? I'm not sure if I'm making a mountain out of a molehill.
Investor · Kansas City, MO · Member since 2020 · 400 posts · 278 votes
3y
Your only protection is having the deal under contract, then you can talk about it to anybody and everybody and they can't take it from you. Unless you don't disclose the entire address and just talk about the neighborhood, but if someone really wanted to then they could take the size of the property and the neighborhood and figure it out.
Overall I'd ask for some referrals on who you can trust. Very very unlikely someone who was referred will steal the deal from you, reputation is huge in the commercial space, it's a lot smaller on this side than on the SFH side.
Realtor · Longmont, CO · Member since 2021 · 577 posts · 631 votes
3y
I would not bring partners in that you do not trust. If you cannot trust that they won't steal it from you, you can't trust that they, for example, will have the funds to close or not back out at the last minute and blow up the deal.
With larger deals, people tend to put the deal under contract, then get it funded with a pool of people they have that are looking for deals like the one they found.
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Cutting the middle man out of the deal is more common in single family than commercial. Reputation is important to players, and no one wants to be known for the person stealing a deal. If you trust the partners there should be no issue.
Investor · Kansas City, MO · Member since 2020 · 400 posts · 278 votes
3y
Your only protection is having the deal under contract, then you can talk about it to anybody and everybody and they can't take it from you. Unless you don't disclose the entire address and just talk about the neighborhood, but if someone really wanted to then they could take the size of the property and the neighborhood and figure it out.
Overall I'd ask for some referrals on who you can trust. Very very unlikely someone who was referred will steal the deal from you, reputation is huge in the commercial space, it's a lot smaller on this side than on the SFH side.