Problem: Too Much Money - Nowhere To Place It

18 Replies

Here is my problem.  I have eager capital begging me for opportunities in the multi-family arena but finding buildings to rehab is proving difficult.  It's not that they aren't out there.  We are in the San Diego region. There are literally THOUSANDS of apartments buildings, but there doesn't seem to be a good/efficient way to FIND them.   

Buildings already listed for sale are easy pickings, and because of this its usually a feeding frenzy.  What interests us more are the buildings not currently for sale but with tired/bored/retiring ownership.  

This is where I could use your input.

My current strategy is this.  Find ALL buildings which meet my criteria (35+ units) in my surrounding cities.  Once I have a list I can start contacting ownership to discuss acquisition.  We have money.  They want money.  Easy enough right?  Not exactly.

My first strategy?  Contact the City to access their databases.  Dead end.  I have contacted city municipalities (building, planning, housing services, ect.) and asked them "do you have a list of apartment buildings in your city with unit count?"  They have all told me  "No, we don't keep that kind of information.  We're not required to."  How a major metropolitan city has no idea how many apartment units they have, or how they are allocated is beyond me.  But it is what it is. 

Strategy #2.  Literally comb Google maps, pin any large buildings that look like apartments.  Once entire city has been combed, research all pins to confirm they are in fact apartments.  Research ownership.  Contact ownership.  Do this for every city.

My question is what do you guys think of this strategy?  Is there a more efficient way?  Often times after I've spent literally hundreds of hours on a project, someone will say to me, "oh, why didn't you do it this (much easier) way?"  Well, I want to learn from my mistakes.  This time I think it's worth my time to ask those more experienced than I before combing through hundreds of aerial photographs.  

I am not afraid of the work.  Sometimes there is no easy way, hell most of the time there is no easy way.  But if there is a more efficient way I am all ears.  

Cheers!

@Adam Sherritt

How about trying to find a shared service that properties of that size would utilize?  I'm thinking property managers, trash collection, landscaping, etc.  Contact those companies and ask to speak with one of their sales people, they sing like canaries if they think they could get you signed up as a new customer.  Might not get ALL of them, but could be an efficient way to get a bunch.

Another thought (just tried this) would be to search rental listing sites like zillow or apartments.com and use a criteria to filter out all of the smaller units, elevators or fitness centers seem like they would work well.  You can even have them plotted an an ariel map to zoom in like you wanted to do on google maps.  Again, probably won't get ALL of the properties, but another efficient way to get a bunch.

If you got money then put it to use and buy CoStar access. All the information you just requested in terms of unit count, location, property manager, owner contact, etc, they have. It's just expensive. But you got plenty of money, right? :)

Depending on the scope of what you need the cost will be between $1000-4000 a month.

Sounds like a job for a VA. Have them scour zoning maps of the area you're looking into and have them check renting websites (Zillow,Craig's list). Hire a high schooler to hit up news paper stands for those "renters guide" publications. Check here in BP for apartment moguls in the area and ask them for lists they have compiled.

This post has been removed.

@Adam Sherritt

I'm working on putting a system in place to do something very similar to what you're talking about. I'm working on refining my system now but the basic idea came from Kevin Bupp's mobile home park investing podcast episode number 7. Take a listen to his system for building a mobile home park database. 

In southern California, each municipality does have maps with the zoning for each parcel. In San Diego there is a layer called SanGIS that you can download but you need GIS to view it. Each municipality will have a GIS system with this info it but you need a list of all the municipalities you're working in. Then you can go through and get the GIS info for that municipality. You can think about working with a GIS analyst to help you, they are usually around 85/hour. Note that they could pull in zoning maps which will show you where apartments could be located to help you refine your search as well. Maybe work it your system for one zip code in San Diego, then expand to other areas. Almost all apartments over 35 will be owned by an LLC or corporation. So you can lookup the registered agent for the LLC/Corp and contact them. You can also find other owners using TLO (in the podcast episode).

Another option is to figure out all your zip codes and download all the apartments that are in those zip codes off of something like Agentpro247. 

Perhaps Costar will do a lot of this for you. I like to build up a system from scratch so that I understand it. For my market in MO I contacted the County and drew on a map that area I wanted records for and what info I wanted for each record. They gave me a price to get all the info in GIS. Now I'll pull it all into GIS and filter it. Pay someone to do some on the ground research. Then do a direct mail campaign and call/email registered agents to all the properties I want. 

I hope that helps!

Lee

@Adam Sherritt

You already tried the manual way and it's not efficient. Since you have money to spend, then try filtering by the zipcodes you are targeting using either listsource or agentpro247. Or go to a full service direct mail provider and buy both the list and the mailings all in one shot. 

It's going to take a lot of work finding a multi in the SoCal area. Lots of touches and follow-up. Why? Very profitable market and most of the weak hands have been shaken out and multis that have been owned for a long period of time should be very profitable for the owners with the massive rent increases over time.

If you want to do more sweat equity, you can drive for multis and try to look up beat up multis and skiptrace the owners to try to find a tired, old landlord that's ready to retire.

Have you thought about taking a more passive approach? There are syndication teams all throughout the country with the opposite problem; plenty of deals and not enough capital.

These teams often have seasoned veterans running them who have long lasting relationships with brokers and get first pickings on deals before they hit the market.

If you like the process - finding the property, negotiating the deal, due diligence, re-positioning the property, daily management, etc. - syndications are surely not for you. On the other hand, if you like the idea of investing in a deal, market, and team that you believe in and sitting back and collecting checks, syndication might be right up your ally.

Check out my blog on why apartment syndication rocks:

https://www.biggerpockets.com/blogs/10191/66365-8-...

Keep us updated on your strategy!

Hi @Adam Sherritt - you can use resources like RealQuest Pro (CoreLogic) or DataTree (First American) and target just multis in very specific areas.  Send an offer to everyone - catch them before they go on the market.

@Adam Sherritt Why not just build one?

Maybe a good route would be to google property management companies and start at the bottom (Lowest rating/worst reviews) Filter the properties they manage, and contact the owners?

P.S. Bay Pointe in PB always felt like it needed an update...

This is a long shot, probably takes some googling, but DoD does a housing survey to gather info for BAH. They do this every year and it's used to set the rates for BAH so if I had to guess they'd likely have some kind of way getting that info and if you're lucky it'd be posted in their findings/survey.

But I have no idea if you can get that. You could always just put a hefty (to them) bounty on solid leads. Hit up landscapers and trash service...

If you got a program like Property Radar you could create a list with some pretty specific filters. I just looked and they have one for multifamily 5+ units. You can filter out age groups and acquisition dates and everything too. Might wanna check it out. 

Originally posted by Account Closed:
Originally posted by @Adam Sherritt:

Here is my problem.  I have eager capital begging me for opportunities in the multi-family arena but finding buildings to rehab is proving difficult.  It's not that they aren't out there.  We are in the San Diego region. There are literally THOUSANDS of apartments buildings, but there doesn't seem to be a good/efficient way to FIND them.   

Buildings already listed for sale are easy pickings, and because of this its usually a feeding frenzy.  What interests us more are the buildings not currently for sale but with tired/bored/retiring ownership.  

This is where I could use your input.

My current strategy is this.  Find ALL buildings which meet my criteria (35+ units) in my surrounding cities.  Once I have a list I can start contacting ownership to discuss acquisition.  We have money.  They want money.  Easy enough right?  Not exactly.

My first strategy?  Contact the City to access their databases.  Dead end.  I have contacted city municipalities (building, planning, housing services, ect.) and asked them "do you have a list of apartment buildings in your city with unit count?"  They have all told me  "No, we don't keep that kind of information.  We're not required to."  How a major metropolitan city has no idea how many apartment units they have, or how they are allocated is beyond me.  But it is what it is. 

Strategy #2.  Literally comb Google maps, pin any large buildings that look like apartments.  Once entire city has been combed, research all pins to confirm they are in fact apartments.  Research ownership.  Contact ownership.  Do this for every city.

My question is what do you guys think of this strategy?  Is there a more efficient way?  Often times after I've spent literally hundreds of hours on a project, someone will say to me, "oh, why didn't you do it this (much easier) way?"  Well, I want to learn from my mistakes.  This time I think it's worth my time to ask those more experienced than I before combing through hundreds of aerial photographs.  

I am not afraid of the work.  Sometimes there is no easy way, hell most of the time there is no easy way.  But if there is a more efficient way I am all ears.  

Cheers!

 Just out of curiosity, why not put it into the S&P 500. They are doing gangbusters, average 10% per year and no tenants.

 Roger, because in Real Estate he can make 20%+ with out the risk of the S&P

Adam Sherrit - contact real estate agent. They can get that list from Realist which is part of their MLS access. I have my MLS access here in LA county and was able to pull that info.

@Adam Sherritt A couple of suggestions worth considering.

1. Have you considered out of state investing in emerging markets? It might be worth it to consider large multifamilies either close to stability or stabilized in B areas?

2. It is always worth to bring in professionals to do the scouting for you. Savvy brokers always have pocket listings. If you have relationships with say four brokers scouting for you, it can save you hours in DIY.

@Adam Sherritt you should contact @Brandon Foster . We've worked with his team and they have a way of getting in touch with owners like no one else. He's in LA, but maybe he can help in SD. 

All the best!

sjw

I would just ask a title company to get me the addresses. Should be no problem. I have done this for 4 unit multis in Sacramento. They didn't even charge me. 

@Adam Sherritt

Agreed on what @April Chim said. This is the exact way I built a multi-family database in Ohio. Through the MLS you have access to Realist.com which pretty easily gets you a list of what your looking for. Now of course it’s not a complete list and some of the data isn’t completely correct but it’s a great start and you can add and edit from there since it gives you the option to export to excel. A local agent should be able to get this for you in minutes.

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