Help Pivot To Finding Off Market Multifamily

[Liang Xu]

I’ve been hunting for my first multi-family deal in Southeast CT for a few months now, and I'm hitting a wall that I think some of you in similar markets might recognize.

I'm seeing two big issues: Inventory is low and Competition is fierce 

1.) Inventory is low. In a city of 30k, I'm only seeing 1-3 multi-family properties hit the MLS a month that match my criteria.
2.) Competition is paying future prices: Investors here are bidding properties up to a point where they break even or even go negative. People are banking on the massive job growth at local employers to drive rents up later, but as a new investor, I can't stomach a negative cash flow property with no other properties owned to keep me afloat.

I want to shift my strategy to off-market BRRRR deals because most MLS deals just doesn't math out for me and I don't have the market inventory to keep on making offers on MLS finds and eventually land a deal.

This week I’ve started my first direct mail campaign targeting owners who have held for 10+ years and who don't reside at the property.

 For those who have successfully landed off market multi-family deals what made you find success? What were some mistakes and traps you found yourself in that wasted resources? Looking forwards to hearing what you guys have to say! 

[Jacob Camhi]

In a tight market, most of the off market success I see comes from getting really specific about who you target (long term owners with tired properties in the pockets you like), stacking a few channels (mail, driving for dollars, local agents, sometimes even local Facebook groups), and then following up way more than feels comfortable. The biggest time wasters are blasting huge, unfocused lists, not tracking responses, and spending a lot on marketing before you really know your numbers and your script. I would start small with your 10+ year absentee list, commit to consistent mail and phone or text follow up for a few months, and treat every conversation as a rep, not just a yes or no. That way when the right seller does raise their hand, you already know your BRRRR criteria cold and can move quickly without having to bet on future appreciation just to make a deal work.