What strategies/tips do you use to generate leads on multunit bld

Question

Hell BP members:

Hope you are doing well. I was curious on what strategies or tips you may have on trying to find good deals on multi-unit bldgs. I am based in Chicago and feel there is not much inventory out there on MLS for multi units . I am curious to find out what strategies have worked for you to identify properties from owners or before they hit the market. I own several apartments/multi unit bldgs. and have funding but it seems like its getting harder to find good deals.

Any advice or tips you can share will be greatly appreciated!

Crystal Smith · Answer

Strategies we use to find Multifamily

• Aged & expired listings- There are a ton of reasons that listings become aged or expired.  You need a system to monitor these properties then at the right time or multiple times approach the owners w/ an offer.  All they can do is say no
• Pre-foreclosure- Foreclosures haven't stopped which means there are pre-foreclosures.  You have to spend some time & potentially a little money to find the properties that meet your criteria but I'd make it part of the business plan
• Mailings to Neighborhood Properties- Every time we close on a property we will send a mailing to property owners within a one-mile radius of our property to see if they have an interest in selling.  We'll repeat the mailings once per year.  The owners know we're serious because we identify the property we own near their property.  It doesn't work all the time but sometimes, bang, we get a new deal
• Community Investment Corp (CIC)- We weren't big fans of CIC but we're starting to change our minds.  If you can find some properties in a cluster (It must be a combined 9 units or more), then CIC is a great option as a one stop shop to finance the purchase & renovation followed by refinancing to a conventional loan.  Our issue w/ CIC is speed which makes bidding on MLS properties using their funding an issue
• Create your own inventory- Depending on what type of funding you have you may want to consider new build or almost new build.  There's a trend of tearing down or converting multifamily to singles, especially on the North Side.  The trend is creating or will eventually create a shortage of multifamilies to rent.  Maybe go against the trend & pick up a multifamily to upgrade instead of converting to a single.

Andrew Johnson · Answer

@Zulf H. I don't know if this will apply to you but I have a property manager (inherently a realtor as well) who manages maybe 500 units where I invest.  There aren't too many property managers in town and they all know each other and most of the time the bigger ownership groups (or individuals) have met with a few of the property managers over the years.  It's almost hard *not* to run into each other in tight geographic markets.  That said, she generally has a pulse on who is open to selling, who wants to sell, etc.  Basically, these are either truly off-market deals, about to go on-market deals, or the equivalent of a "Make Me Move" style price.  She also knows what I like to invest it, ballpark capital I have to work with, where I would go to get funding, etc.  Basically, it's not rocket science for her to call me with "Any interest in _____?"  I've also, in the past, given her addresses of properties that I've driven by and (for whatever reason) found attractive.  She either knows the owners, knows the person managing that property, or (in some cases) is open to finding out and just calling them.

Now, I have zero clue if that will work in a market the size of Chicago.  It's pretty much an apples and oranges comparison to where I invest.  But if you have maybe a 1 mile radius where you have a preference, it's not too hard to come up with that "watch list" of properties and see if your PM (or a realtor active on the local market) might be able to do some digging.

This method (for me) hasn't uncovered "desperate to sell apartment owners" but I have made a few informal "standing offers" on buildings.  I treat it more of a long game.  It might not pay off today, might not pay off in 12 months, but something may come to fruition in 5 years.

Ben Wilkins · Answer

A lot of the Podcasts that are aired on BiggerPockets mention direct-mailing campaigns. Find properties that you see potential in, and write a letter letting the owner know what you like about their property and that you would be interested in buying.

Better yet - find a way to talk with the owner (phone or meet-and-greet). If they aren't looking to sell now, ask them to keep you in mind for when they do want to sell. Remind them (without being obnoxious) every six months or so!

I suggest networking through local real estate meetings - these opportunities are great, and there are usually people there who might be able to get you a lead. As a bonus, the seminars are generally pretty good. If you find a meeting that provides food or beverages, you get an added bonus!

Loopnet may surprise you every now and then - don't ignore it just because it doesn't always have the fantastic deals. I am in the process of closing on a property that I found on Loopnet, gave an offer, and waited a little bit of time before the owner agreed to negotiate (property is listed on my website - shameless plug!)

While you are browsing Loopnet, start keeping track of the brokers that are listing properties that you are interested in. Get in contact with them and ask them for leads!

Kurt Bender · Answer

@Zulf H. You can also get out and network with other local investors, brokers, private lenders, etc at REIA meetups. There's potential for pocket listings through these sources.

Levi T. · Answer

Get hustling by writing and calling owners like yourself. Go eye some buildings that fit your investment needs, then find the owners... Only way it works if you put in a lot of work.

Kurt Bender · Answer

@Zulf H. REIA meetups are always going on. If you google Chicago REIA meetups I'm sure you'll find one that fits your schedule. Also you'll find meetups under networking events here on BP.

Sam Amir · Answer

@Zulf H. the others have pretty much covered the different ways to find listings, but you are right, it's dry right now. Local REIA clubs you should check out:

-Chicago REIA

-Chicago Creative Investors Association (CCIA)

-Redevelop U

Be wary that most of the meetings they will have someone come in and pitch a product, but hey, that's the game. It's still worth it to go and check out. They all meet pretty frequently. Hope to see you at one of these!

Zulf H. · Answer

@Kurt Bender - Thanks Kurt. This is probably what I need to do, however I do travel quite a bit for work therefore I it has been a bit challenging, but I need to attend REIA. Wonder if there is one in Chicago for the month of July?

@Ben Wilkins - Thanks Ben, some really god tips . I like the idea of loop net, I will look into it.

@Andrew Johnson - I like the idea about reaching out to property managers and seeing if hey have any leads or if their current customers are looking to sell. Thanks for the tip!

Zulf H. · Answer

@Crystal Smith - Thanks for the tips. I think these are good. Since I am investor I rely on my broker, but I would like to be aware of more deals and network with others so I can also be aware of great opportunities or deals. I will look into CIC, sounds interesting.

What strategies/tips do you use to generate leads on multunit bld

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