Resources to buy an apartment complex in Dallas?

21 Replies

Hello:

My Dad is looking to buy an apartment complex in Dallas, but it looks like there is no MLS system for finding apartments for sale.

His is looking for a complex with a brick exterior valued between 2 and 4 million. He would like 100 or more units in good or better condition, preferably built in 2000 or later.

What resources are available to find such a complex for sale?

Thanks,
 Neil

Search www.loopnet.com for a commercial agent in your area that specializes in multi family investments. They will work for you to find the property and help negotiate the deal and their service shouldn't cost you anything.

Hey Neil, 

That's great that your Dad is looking to buy an apartment complexI  Dallas has gotten very expensive with very low cap rates over the last few years.  I have 140 units in Ft. Worth that I bought about a year ago, and I would not be able to but that same product today in Dallas. There might still be some deals left though so you never know till you try.  Also, I echo Rob's comment above.  Loop net is a great way to find brokers for whatever area of the country you are looking for.

Good Luck!  

Neil,

Your post doesn't make sense.

At  a minimum your dad is saying he wants something built after year 2000 with 100 units at a cost of 20,000 to 40,000 a door turnkey with no issues in Dallas , TX.

I would like a 250k Ferrari for 40,000 as well but that doesn't mean it exists.

Your dad needs to get realistic and learn the values and what stuff is selling for. Just doing a brief search there are some buildings at about 35,000 to 40,000 a door but the buildings are from the 1970's and 1980's.

You get into built in the 2000's and the rents are much higher and the per door price is at a premium.

So something has to give in expectation. 

Originally posted by @Rob Beland :

Search www.loopnet.com for a commercial agent 

 Thanks for the link.  I will do that.

I think some buyers are just late to the party. I get calls from investors across the country and they want 2010 pricing but buy in today's economy.

Buyers got the best pricing then because the markets were frozen.

Buyers have to be realistic to the markets or frankly they are just  a waste of time for the broker. I do not even get started with a new client unless they are realistic. This doesn't mean I do not try to get them the best property and value possible. It does mean they have to in the same Universe to be able to close a transaction.

For example someone says " I want a strip center with fully stabilized all national tenants in a 100k plus median income area at a 10 cap." Ok well good luck to your endeavors and after a year of searching you will probably say you still haven't bought anything.

If instead you say that you are looking at around an 8 cap and then with negotiation we can push to an 8.5 cap then that is in the realm of possibility of happening. Now if they want to build new and get a high cap or buy value add 50% leased up or totally vacant and work for value then we could possibility get there and then some. 

Buyers get defensive when brokers tell them what the market is doing. There are some brokers who say that the low cap at a high price is a great deal just to sell something. You have to take what they say with a grain of salt as they are pushing their sellers listings. On the flip side a commercial buyers broker can look at the market objectively and say these are the best deals in the marketplace TODAY.    

Originally posted by @Joel Owens :

Your post doesn't make sense.

I understand.  Maybe what he wants does not exist, possibly because he last owned an apartment many years ago.  I guess I will have to bring him a list of what is available and show him what reality is now.

Thank you for the sage advice.

Hi Neil,

I often times go through a process with new clients. First thing I determine is after showing the market what their response is.

If they say that an 8 cap is fine they just didn't know the market that is one thing. If they dig in and say they want something that doesn't exist in the current market cycle for that asset class then they are a waste of time plain and simple.

Commercial brokers run a business and we get paid when something closes.

Just looking at it quickly on LoopNet for Dallas buildings built in 70's and 80's you might can land 30k to 40k a door.

Built after 2000 it is showing per door rates at least DOUBLE that. Does your dad pay cash or do financing on properties??

Hope it helps.  

Originally posted by @Joel Owens :

Does your dad pay cash or do financing on properties??

So far, he is looking to buy in cash.  But, if the market is much higher than he is expecting, he will probably end up using his funds as a down payment and financing the rest.

Neil multifamily is frothy right now. It depends on if he holds for retirement and exit strategy.

Most of my clients are after retail strips right now at higher caps.

If he has cash in a market cycle that is just recovering ( not multifamily ) then leveraging can be great to get more upside in multiple properties.

Has he thought of senior housing a subset of multifamily?? Lot's of future rent growth there.

Originally posted by @Joel Owens :

Has he thought of senior housing a subset of multifamily?? Lot's of future rent growth there.

I don't think he had gotten down to specifics yet.  I think the best thing is for me to show him what the market looks like and then try to decide the best path from there.

There are plenty of ways to find these types of deals.  You can search loopnet.com or even costar.com.  These are some of the starter and most common sites but there are ways to begin looking for opportunities.

Looking in the surrounding communities may also provide options that fit your dad's criteria as well.

Joel

In you post you mentioned about senior housing. What kind of cap rates one could expect for those. Here is San Francisco Bay area i saw most of the assisted living (6 bed board and care facilities) business were running with a loss .  

Would be good to know how these senior living facilities do in other locations and how the larger facilities fare.

Now with  Loopnet being bought out, new rates for using Loopnet/ costar are skyrocketing. Is anyone finding and new sources for complexes other than Brokers ?

@Tony Asbille , have you tried direct mail/ cold calling? Sometimes that's the best way especially in this market. Btw this thread is from 3 years ago.

 Yes we do direct mail and social media marketing.   

@Tony Asbille what sort of social media are you using, because I don't see a presence for your company?

Richard you must be looking at my corporate holding company arm. Because all 7 of my apartment complexes have their Facebook site like Canyon Creek Apartments or Brookhollow Apartments. All of our retail store's have websites plus full social media exposure like FB, LinkedIn, instagram etc

Thanks Juan for the suggestions but I hate cold calling. Realizing it may be a necessary evil given the current market I do utilize one of the office staff to send out blind mass emails from mailchimp. 

Updated 3 months ago

Found Crexi I now use it daily. Has more information and more deals than Loopnet. https://www.crexi.com/

@Neil Aggarwal as previously indicated, finding 100+ unit in the DFW area for that price in today's market will prove quite challenging. I would imagine that anything you can find meeting those criteria would need some SERIOUS work. Has your dad considering investing with a syndicator?

Better to invest with an experienced pro syndicator. There are many good ones out there. Network and meet some of them. Also you want to spread it around among many deals. Business 101 diversify. Buying large deals will wreck you if you don’t know what you’re doing. Learn first by investing with the pros. Then once you know the process and have built a team you might try one yourself.

@Neil Aggarwal Perhaps, you could offer some suggestions to your dad to find a good apartment syndicator who invests in the Dallas/Fort Worth area to invest with. 

Sometimes, it is ok to be passive in an investment as opposed to forcing an active play, you know. 

Neil, you could help your dad find and vet some really good syndicators here on BP with whom he can invest with. 

Hope this helps. Goodluck. Thanks! - Ola

@Neil Aggarwal If you are interested to get a broad picture of what's on the market, you could check out the listings of ARA, HFF, JLL & Colliers to name of a few.

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