Background: Trying to acquire my first apartment building. Found a very great value-add opportunity in the Southeast while driving for dollars on my motorcycle two weekends ago. Apartment is a 50-unit building, owned by the same owner since 1993. Owner is 75 years old. Lots of deferred maintenance, parking lot needs to be resurfaced, pool not clean, siding needs to be updated, etc., all of which seem cosmetic and manageable.
I've tried calling the resident manager on 4 occasions, to no avail. So it seems like the apartment is undermanaged, leading me to believe rents are most likely under-market. This building is in an emerging market, so the upside potential in rehabbing, raising rents and reducing expenses seems promising. My strategy is to purchase, rehab, stabilize over two years, and sell at a higher price. Hoping to finance the down payment through owner finance or syndication. I already have the funds for the rehab.
My next challenge is to approach the owner. I've tried calling all the numbers I've found through my research, but have not been able to connect. Through tax records, I've found the owner's address and plan to knock on his door this Saturday. Does anyone have any tips on what angle I should approach the owner of the apartment building? Should I approach from the angle of "I want to get into apartment investing and would like to talk about your experience in owning apartments" or "I want to buy this apartment from you, here's what I can offer".
With the former approach, I feel like it's less direct and builds a relationship before ultimately getting to the point (buying the apartment building). With the latter approach, I feel like I get straight to the point and cuts through the BS.
Anyone have anecdotes or experience they want to share with similar situations?
easier said then done but you'd need to find out what he values and make sure your offer ticks those boxes. It's probably unlikely that he needs the money or that money is really all that important to him. Time is probably a concern and if he's older maybe more so... I think the hardest part is going to be explaining why you're knocking on his door and why he should give you the time to listen to whatever reason it may be.
I would choose the second option and be direct. That way you would not waste any time and later on not seem to be disingenuous. If he is truly interested in selling he will listen to you at the very least. If he is not, then you will know that his motivation is zero. If he is not interested, this may be a good time to play the mentor me card. First, you might actually learn something. Second, you might get on the top of the waiting list when he does decide to sell. Remember that there are creative ways to structure the deal that make it winwin for both sides. It doesn't always have to be a traditional sale.