How To Find A Deal In This Market

Multi-Family and Apartment Investing
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How To Find A Deal In This Market

Gino BarbaroPro Member
Rental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes

We just signed a 63 unit two weeks ago and have signed on a 67 unit this past Friday. We are self funding these deals, and they were brought to us by a broker.

How do you find a deal in this part of the market cycle, when deal volume is down significantly, and there is a ton of pessimism.

  1. 1. Treat brokers like gold. In multifamily, brokers are the gatekeepers. This broker has bought and sold several deals for us. Do not try to sell a deal by yourself. Find a top broker to represent you and market your deal to the investing world.
  2. 2. Know what you’re talking about. When you do find a broker, make sure you sound credible, can tell them what your buy box is, and are targeting deals that you can close. Don’t waster their time.
  3. 3. Find a motivated seller. If there is no motivation, then chances are there is no deal to be made.
  4. 4. Create value for the seller, Our seller, while he still sold for a good price, needed the funds for another project, and needed certainty of close. We knew how to create value for the seller.
  5. 5. Don’t be afraid to put in lower, fair offers. Ask the broker if they think you should put it in and if they say yes, then let it rip. But, have a legitimate reason for your price. Our final price for the 67 unit was 17% less than offer.
  6. 6. Brokers are hungry for your business, and are looking to add to their buyer lists.
  7. You can always buy real estate in any part of the market cycle, but you can’t always sell. A lot of syndication groups are finding this out the hard way.
  8. Seller financing is coming back in vogue. If the deal doesn’t make sense to finance traditionally, see if seller financing works.
  9. Now is the time to get in the market. We are reverting back to a buyer’s market, and the next 2 years will offer ample opportunities.

How many people wished they had bought in 2009-2013? What about 2018-2020? If you’re in in for the long term, please consider jumping in now to build your team and your base of investors.

Happy investing!

Buy Right Manage Right Finance Right®

Gino

Podcast Guest on Show The “Conveyor Belt” System That’ll Build You a BIG Rental Portfolio Quickly
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Most Popular Reply

Evan Polaski
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
2y

@Gino Barbaro, this is a great list.  I particularly appreciate #5.  To me, this comes down to knowing your underwriting and market, your #2.  I can justify any price (and some high fee syndicators are still doing so), if I just play with assumptions, prepay and buy down my interest rate, and hope that sub-5% cap rates will be returning in the next few years.

But if you know your market and market cycle, have an idea where interest rates may be going (this is an educated guess for all of us), and then have your assumptions, you can certainly have the conversations you reference with brokers and see what their take is on pricing and if it is worth writing.

Finally, I have said this before and will continue to say it, whether we are talking single family homes or 400 unit apartment complexes, off-market purchases do not make something a deal.  And back to your motivated sellers, if a seller takes a property to a broker, there is inherently more motivation than a seller that says "I will sell for the right price".  Not to say every off market transaction is a bad deal, or to imply that every listed property has realistic pricing expectations, but there is more motivation to move a property that is listed.  And, while the broker's work for the seller, most don't want to waste their time either, so if the seller does have unrealistic expectations, having a listing broker (and other offers) can help bring the seller's expectations back to reality.

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  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    2y

    @Gino Barbaro, this is a great list.  I particularly appreciate #5.  To me, this comes down to knowing your underwriting and market, your #2.  I can justify any price (and some high fee syndicators are still doing so), if I just play with assumptions, prepay and buy down my interest rate, and hope that sub-5% cap rates will be returning in the next few years.

    But if you know your market and market cycle, have an idea where interest rates may be going (this is an educated guess for all of us), and then have your assumptions, you can certainly have the conversations you reference with brokers and see what their take is on pricing and if it is worth writing.

    Finally, I have said this before and will continue to say it, whether we are talking single family homes or 400 unit apartment complexes, off-market purchases do not make something a deal.  And back to your motivated sellers, if a seller takes a property to a broker, there is inherently more motivation than a seller that says "I will sell for the right price".  Not to say every off market transaction is a bad deal, or to imply that every listed property has realistic pricing expectations, but there is more motivation to move a property that is listed.  And, while the broker's work for the seller, most don't want to waste their time either, so if the seller does have unrealistic expectations, having a listing broker (and other offers) can help bring the seller's expectations back to reality.

    1Reply
  • Sean Allen Fenn
    Member since 2024 · 20 posts · 8 votes
    2y

    This is great, thank you!

    0Reply
  • Phil AveryPro Member
    Investor · Houston, TX · Member since 2023 · 79 posts · 47 votes
    2y
    Quote from @Gino Barbaro:

    We just signed a 63 unit two weeks ago and have signed on a 67 unit this past Friday. We are self funding these deals, and they were brought to us by a broker.

    How do you find a deal in this part of the market cycle, when deal volume is down significantly, and there is a ton of pessimism.

    1. 1. Treat brokers like gold. In multifamily, brokers are the gatekeepers. This broker has bought and sold several deals for us. Do not try to sell a deal by yourself. Find a top broker to represent you and market your deal to the investing world.
    2. 2. Know what you’re talking about. When you do find a broker, make sure you sound credible, can tell them what your buy box is, and are targeting deals that you can close. Don’t waster their time.
    3. 3. Find a motivated seller. If there is no motivation, then chances are there is no deal to be made.
    4. 4. Create value for the seller, Our seller, while he still sold for a good price, needed the funds for another project, and needed certainty of close. We knew how to create value for the seller.
    5. 5. Don’t be afraid to put in lower, fair offers. Ask the broker if they think you should put it in and if they say yes, then let it rip. But, have a legitimate reason for your price. Our final price for the 67 unit was 17% less than offer.
    6. 6. Brokers are hungry for your business, and are looking to add to their buyer lists.
    7. You can always buy real estate in any part of the market cycle, but you can’t always sell. A lot of syndication groups are finding this out the hard way.
    8. Seller financing is coming back in vogue. If the deal doesn’t make sense to finance traditionally, see if seller financing works.
    9. Now is the time to get in the market. We are reverting back to a buyer’s market, and the next 2 years will offer ample opportunities.

    How many people wished they had bought in 2009-2013? What about 2018-2020? If you’re in in for the long term, please consider jumping in now to build your team and your base of investors.

    Happy investing!

    Buy Right Manage Right Finance Right®

    Gino


     This is a damn good post! I drew a lot of inspiration and agree whole heartedly. Solid information for sure. Keep dropping those gems! 

    1Reply
  • Gino BarbaroPro Member
    OP
    Rental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
    2y

    @Phil Avery

    We try to practice what we preach.  We just closed on the 63 unit and almost all of these points were met during the deal. Love on your brokers and create your own buy right criteria.

    Podcast Guest on Show The “Conveyor Belt” System That’ll Build You a BIG Rental Portfolio Quickly
    1Reply
  • Sean Allen Fenn
    Member since 2024 · 20 posts · 8 votes
    2y

    This is great! What if we are at step one? It’s our first deal. That makes “track record” an issue. Our buy box is ~ 100 units. Class B. in an emerging market. Based upon our data, we’ve identified the ideal market. My question is this:

    I’ve heard of this tactic for finding brokers. Go to crexi or similar site. Find the properties in your market. Get acquainted with the broker for that property. Chances are, what’s listed won’t pencil. With that in mind, convince the broker to include you in the next off-market deal.

    Who has done this?

    1Reply
  • Gino BarbaroPro Member
    OP
    Rental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
    2y

    @Sean Allen Fenn

    Most deals haven't penciled. The goal is to get to know as many brokers as possible, and to be top of mind.

    Once you start going on property tours on deals that suck, brokers will start saying things like, Hey I've got this deal coming up next month. Wanna take a look at it?

    It's all about consistency, and follow up. And brokers don't want tire kickers just calling them for deals, and they don't want to go out for a cup of coffee. They want to know you're serious and committed. And when they do send over a deal, you have an answer by day's end.

    I wouldn't call it a tactic, I would call it a process, repeatable and consistent.

    Podcast Guest on Show The “Conveyor Belt” System That’ll Build You a BIG Rental Portfolio Quickly
    3Reply
  • Sean Allen Fenn
    Member since 2024 · 20 posts · 8 votes
    2y
    Quote from @Gino Barbaro:

    @Sean Allen Fenn

    Most deals haven't penciled. The goal is to get to know as many brokers as possible, and to be top of mind.

    Once you start going on property tours on deals that suck, brokers will start saying things like, Hey I've got this deal coming up next month. Wanna take a look at it?

    It's all about consistency, and follow up. And brokers don't want tire kickers just calling them for deals, and they don't want to go out for a cup of coffee. They want to know you're serious and committed. And when they do send over a deal, you have an answer by day's end.

    I wouldn't call it a tactic, I would call it a process, repeatable and consistent.


     That makes perfect sense. Thanks. I appreciate you!

    1Reply
  • Gino BarbaroPro Member
    OP
    Rental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
    2y

    @Sean Allen Fenn

    Take if from a New Yorker who started investing in TN back in 2010. Jake & I got a lot of y'all ain't doing business down here. Gotta kiss a lot of frogs before you hit pay dirt.

    The upside is that where we are in the market cycle, brokers now need us more than they did last year

    Gino

    Podcast Guest on Show The “Conveyor Belt” System That’ll Build You a BIG Rental Portfolio Quickly
    2Reply
  • Phil AveryPro Member
    Investor · Houston, TX · Member since 2023 · 79 posts · 47 votes
    2y
    Quote from @Gino Barbaro:

    @Sean Allen Fenn

    Most deals haven't penciled. The goal is to get to know as many brokers as possible, and to be top of mind.

    Once you start going on property tours on deals that suck, brokers will start saying things like, Hey I've got this deal coming up next month. Wanna take a look at it?

    It's all about consistency, and follow up. And brokers don't want tire kickers just calling them for deals, and they don't want to go out for a cup of coffee. They want to know you're serious and committed. And when they do send over a deal, you have an answer by day's end.

    I wouldn't call it a tactic, I would call it a process, repeatable and consistent.

    Gino for the win once again! Great insight. 

    1Reply
  • Gino BarbaroPro Member
    OP
    Rental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
    2y

    @Phil Avery
    when you've made as many mistakes as I have, you're bound to start winning!

    Podcast Guest on Show The “Conveyor Belt” System That’ll Build You a BIG Rental Portfolio Quickly
    3Reply
  • Sean Allen Fenn
    Member since 2024 · 20 posts · 8 votes
    2y
    Quote from @Gino Barbaro:

    @Sean Allen Fenn

    Take if from a New Yorker who started investing in TN back in 2010. Jake & I got a lot of y'all ain't doing business down here. Gotta kiss a lot of frogs before you hit pay dirt.

    The upside is that where we are in the market cycle, brokers now need us more than they did last year

    Gino


    Speaking of TN, we found a property that's off-market there. It hasn't traded since 2008. You can understand our inexperience. We do have our buy-box clearly defined, which makes this relevant. Before sending an LOI, we're missing information. It looks like 100 units, but we don't know for certain. I called the management company to ask. The person I talked to didn't want to tell me. She did give us permission to make an offer. My question is, what would you do in this situation?

    0Reply
  • Gino BarbaroPro Member
    OP
    Rental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
    2y

    @Sean Allen Fenn

    You have to find the owner and go direct to owner. The management company is reluctant because if it sells they may be out of a job. There is no way you can make a reasonable offer without some type of financials.

    I would ask her what her number is to sell the property, what are they looking for. Not much more you can do until you establish ownership

    Gino

    Podcast Guest on Show The “Conveyor Belt” System That’ll Build You a BIG Rental Portfolio Quickly
    0Reply
  • Sean Allen Fenn
    Member since 2024 · 20 posts · 8 votes
    2y
    Quote from @Gino Barbaro:

    @Sean Allen Fenn

    You have to find the owner and go direct to owner. The management company is reluctant because if it sells they may be out of a job. There is no way you can make a reasonable offer without some type of financials.

    I would ask her what her number is to sell the property, what are they looking for. Not much more you can do until you establish ownership

    Gino


    We established ownership. Calling the management company was only to start figuring it out. If we can find the owners' contact info (LLC), what if we ask them? For instance, not send the LOI, but make contact. Ask if they wouldn't be opposed to receiving an offer?

    0Reply
  • Gino BarbaroPro Member
    OP
    Rental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
    2y

    @Sean Allen Fenn

    I would gather more info about the property, their motivation to sell, if they want an offer. Put yourself in their shoes. Someone you've never met is calling you to buy your property that you've owned for years. Don't go right into buy mode, learn moe about the property and they will entertain an offer.

    Good Luck!

    Gino

    Podcast Guest on Show The “Conveyor Belt” System That’ll Build You a BIG Rental Portfolio Quickly
    1Reply
  • Sean Allen Fenn
    Member since 2024 · 20 posts · 8 votes
    2y
    Quote from @Gino Barbaro:

    @Sean Allen Fenn

    I would gather more info about the property, their motivation to sell, if they want an offer. Put yourself in their shoes. Someone you've never met is calling you to buy your property that you've owned for years. Don't go right into buy mode, learn moe about the property and they will entertain an offer.

    Good Luck!

    Gino


     Seeing this after sending you a DM about it. That makes perfect sense! My intention is to start corresponding with them. The objective is to be top-of-mind if and when things change. The owner isn’t motivated now, but anything can happen, right?

    1Reply
  • Phil AveryPro Member
    Investor · Houston, TX · Member since 2023 · 79 posts · 47 votes
    2y
    Quote from @Gino Barbaro:

    @Phil Avery
    when you've made as many mistakes as I have, you're bound to start winning!


     Love it. 100% Agreed. 

    1Reply
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