"Unpriced" multifamily

6 Replies

I'm starting to get really annoyed with all the "unpriced" offerings. The seller obviously has a price in mind and its not too hard to figure out value. Why would a seller expect a buyer to spend time underwriting a deal, submitting an LOI, etc while having no idea what the seller has in mind. Why should I waist my time calling a broker to try to get in the head of the seller? Has anyone had any success purchasing an unpriced deal or do you just move on to the next?

Most of the large stuff is unpriced. It's tricky. I ask what the whisper price is or seller's expected range. Most brokers that know you will tell you if you ask.

Hey Serge,

When I see this stuff we just hit them with our offer regardless.

I find sellers doing this if it is new to the market they will try to wait 3 to 4 weeks to see if a sucker comes along.

We tell the listing brokers or sellers directly that here is our best offer and if you do not choose us to go to LOI where you can't accept other offers then we are moving on.

The reason is I nor my client wants to screw around for months on end for nothing. You have the first round of bidding, then the next round, and then the final round if a buyer is selected by the seller ( oh boy we should be so lucky! lol ).

I just do not mess with TBD and all of rounds of bidding. If the property looks good I call the broker and ask if they are ready to deal if they get an offer that works?? If they say they want to wait it out then I tell them we are moving on. 

I tend to like a less sophisticated broker or agent that just happens to get a seller on a big property listing. In those situations we can get them to do more of what we want.

Just ask where the broker expects the deal to trade. He should be able to give you an expected cap rate.

@Joel Owens   agreed! What I am finding is the standard "give it your highest and best". On the 90 unit we are working on now we are literally a million dollars apart. The buyer is supposedly on his death bed and very motivated, secondary market with no confirmed other buyers. Yet he wants to get paid for supposed/projected/rumored economic growth in the town that may or may not impact his property. He has not maintained it over 80% occupied for 3 years yet wants a cap on a total of 95% occupancy which includes loss to lease, bad debt, vacancy, etc. I feel like our offer is as good as it will get and is beyond reasonable. Yes, time to move on. 

I just tell them if you don't find a buyer at your value give us a call back.

Lot's of properties. No need to be saddled with millions in bad debt.

I'm finding it's hard to get my first large multifamily deal. Going into it I'm resolved to be rational and numbers-oriented on actuals but the T12 actuals are often misleading, plus it's hard to really know what kind of financing terms you'll get, and the loan terms can be the diff between 10% and 18% cash on cash. Plus almost every expense I settle on could easily go 5k in either direction, again forcing a retrace of $100k if it comes up in DD. Trying to be very meticulous and rational but at some point in the LOI and PSA stage you just have to sort of get to a certain point and then let go, and worry about it later in DD, and hopefully put off 3rd party reports until after you can pin down all the REAL expenses and income. Nobody every actually told me this, but it seems to be the case. I'm finding that the hardest part of this (and hardest by quite a margin) is the stuff nobody talks about. I also feel like people who are good at this and succeed often don't have the ability to put what they do until subtle, clear, profound insight. It's like asking a pro athlete how they do something, the answer rarely goes beyond fundamentals and clichés.

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