Direct Mail to Apartment Owners

21 Replies

I'd like to focus my attention on apartment complexes. Since most are owned under LLC's, what's the best way to contact them? If by direct mail, what are some ideas of how to approach the owner(s) in letter form?

Hey @Angela Meraklis-Lyons

I have done some direct mailing to multifamily owners. The response rate was far lower than when I do my normal SF wholesale marketing. But for the ones that did call, I got into active negotiations on most of them.

Last Thursday I closed on a 52 unit property that came from DM!  So it does work. 

I’d love to give you some insight on what I did. Granted, it’s not too scientific or tested, but it worked...

My verbiage is very simple and simila to what you said. These are typically sophisticated investors, if they’re in a place to sell, they’ll call. If they’re not, any verbiage used can get calls, but probably wasting everyone’s time. My opinion only!

I also use CoStar,  which has a ton of information, but isn’t cheap. 

@Angela Meraklis-Lyonsundefined

@Gino Barbaro ,

Thanks!  Your community is quite impressive.  I really appreciate all the work that you guys do.  

We are pretty excited about the deal.  We purchased the 52 units for $3.05m, raising $1.07m that includes the $310k in renovations.  The property has great bones and had been really well taken care of and completely occupied, but not a ton of updates have been made since it was built in the 70s.  And the owner was an older guy and ran it very old-school so the rents were really low.  

The submarket has doubled in population in the last 15 years and he hadn't taken advantage of the market changes.  

At current performance, we bought at a 7.4% cap, average market is 7-7.5.  After increasing the performance, we should be around a 9-9.5% cap, but that will take a couple years to get it stabilized.  

We are projecting an 80% total return to the investors with a 5 year sale.  But my preferred exit would be to refinance, return the capital to investors, but everyone hold their equity share longterm.

Father in law just did a 1031,in Astoria queens. I helped him find a small multi in the Hudson valley. I have been a small single family buy and hold investor.  Finding his gave me the confidence to look at multi’s. 

Now he closed on his 1031 and I’m in the hunt.  I’m thinking of direct marketing, I also started calling the number on the signs. Spoke to a lot of nice people but not decision makers.  Thanks for the post.

@Angela Meraklis-Lyons

I don't know much about the effectiveness of DM for multi family however in my experience the best way to get in front of sellers and owners is through local brokers. I would recommend reaching out to multi family brokers in your area and tell them what you are looking for. They should be able to help you out and give you guidance, after all their job is to find buyers like yourself. Marcus and Millichap is a good one to start out with, they have a strong national presence. Good luck! 

@chase keller Could you shed some light on the specifics of your DM campaign?

Did you use list source?

What were the parameters you selected?

What type of mail piece would you recommend?

What is your buying criteria?

Thanks for the help!

@Jordan Springer  There’s nothing too scientific about my strategy. It’s all a numbers and timing game.  Many sellers want nothing to do with brokers. They get calls all the time from brokers that promise a lot but don’t deliver. I know from the owner side as well.  And some will sell lower to a private buyer just because it’s easier and quieter. Probably a smaller number of sellers, but I’m not looking for a ton of volume myself, I can only take down a few great deals a year...

I tried to compile a list of every owner of property over 20 units in my whole MSA. 

I used listsource as well as datamined the county records. 

My mailer was pretty simple, really just a more professional version of the yellow letter I’ve used for wholesaling SF. 

I’d love to share what I used if anyone wants it.  Again, nothing groundbreaking, but it worked at least once. 

Personally I would hit Multi Family from a slightly different angle. There are two free resources at you fingertips and one not so user friendly to find good leads. 

  1. visit Zillows mapping for rentals in a market, locate the address and then locate the owner. I use Fastweb for all of my owner info and its nationwide and free. 
  2. Craigslist for similar info. 

The key is that youre looking for tired owners with deferred maintenance and properties lacking upgrades. In the multi family arena money is made converting a non performing property in to a highly performing property.

The other place I would search is the local "Legal" newspaper for the area.. If you cant find one then visit the unlawful detainer hearings for the properties with high turnover with tenant evictions. 

@Jordan Springer

I use DM for multi-family and have had success with it.  I use my own letter template and look up the information from the owner on county tax assesor website and then on the secretary of state's business search site.   It is especilly helpful if you can pull up the deed. 

601-941-4313

@Michael Quarles

When you mentioned you use Fastweb, were you referring to the online scholarship and college search service - fastweb.com ?

Originally posted by @Michael Quarles :

Personally I would hit Multi Family from a slightly different angle. There are two free resources at you fingertips and one not so user friendly to find good leads. 

  1. visit Zillows mapping for rentals in a market, locate the address and then locate the owner. I use Fastweb for all of my owner info and its nationwide and free. 
  2. Craigslist for similar info. 

The key is that youre looking for tired owners with deferred maintenance and properties lacking upgrades. In the multi family arena money is made converting a non performing property in to a highly performing property.

The other place I would search is the local "Legal" newspaper for the area.. If you cant find one then visit the unlawful detainer hearings for the properties with high turnover with tenant evictions. 

When you mentioned you use Fastweb, were you referring to the online scholarship and college search service - fastweb.com ?

Where or how can we get Fastweb?

I worked commercial real estate as a broker for a while. DM has two sides. These owners are professionals and so they don't really care a lot about the personal connection a yellow letter offers to be able to talk business. I would say if you can talk to them and get them on the phone they'll let you know if there is an immediate need and they all have their price. If there is an immediate need and you want a shot at it though, you'll have to be their guy/girl. So i would follow that up with something like a postcard or a thank you letter or small gift and that will set you apart. They don't get treated like people often and instead of thinking about their units think about providing a solution to their need.

I say call because i believe if they are under an LLC they aren't protected by the DNC like a single family owner because it's a "business"

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