How To Find Motivated Apartment Sellers

22 Replies

Hey guys,

I'm trying to see how else i can find apartment owners who are motivated and WANT to sell. Something I did was I printed 100 postcards with a generic message of 'saw your apartment, do you want to sell'. I'm going to drive around certain areas i like (by the University for example), mark down distressed looking apartments (present deferred maint. etc) and send out to them and expect a phone call.

How else do you guys find apartments? Thanks for the tips!

I love what your doing Tony. I wish I had some advice but have never done what your going to do. Sounds like a great idea, keep us posted on your progress.

thanks Jason, maybe some of the vets will reply to this thread so we'll both get some ideas =D

Hey Tony,

It looks like you're looking to buy apartments that need work and rehab them for your investment company, is this accurate?

I'm sure you know since you've been in the industry for a while that it takes a lot of hard work and good research to locate these deals. There are guys like myself out there that prospect owners of apartment buildings all day long and it sure isn't easy, but it is possible.

Most of the owners that are worth talking to are very hard to find, the only way to connect with these types of people is to be highly specialized and focus only on apartments owners and build relationships with them.

100 postcards is a good start, but i would recommend making calls EVERYDAY to actually find an owner who is willing to sell & is realistic about the value of their property. If you don't have time to look for deals all day look, reach out to local brokers and tell them what your buying criteria is. Let them bring you the deals and analyze them as you go until you find properties worth buying.

hey Johnny - what i am transitioning to is to buy, rehab, hold for 2-3 years and 1031ing them into larger properties. That is what I am trying to transition into from rehabbing single houses.

how do you prospect for owners all day long? when you say you make calls, are you just going down the list or how are you targeting them?

Thanks Johnny

I've had luck by contacting owners of expired mls multi-unit listings. If you are willing to go far enough to get their mailing address, why not just call them directly? Upon talking to them most probably will not be looking to sell, but ask them if you can send them your contact info so that they can call you if/when they are ready to sell. Then check back with them every so often.

advertise on craigslist in the for rent section

Richard Greenman
Become a Real Estate Bird Dog Today
[REMOVED]

Hey Tony,

Your strategy can definitely work and I've seen others do the same, there are tons and tons of apt buildings that need work and are being poorly managed by the current owners.

I have built a database of properties in my area - orange, seminole, brevard, osceola county etc. I target properties that were purchased in or around 2002 or 2007.... these would be the most likely owners to be facing balloon payments in the near future ( 5 & 10 yr balloons). I'm looking for owners that are motivated to sell and that are realistic about meeting the market to sell. These are few a far between. I have built a list of about 2000 apt buildings so Its pretty hard to burn through the list. Many are not interested in meeting, some will meet but are not motivated or realistic, and some actually want to sell so I get the listing and start marketing to buyers.

So to answer your question, yes I go down the list and call every single owner. I want to know as much as possible about all of the owners so I will call anyone and everyone. However, I wont list a property with an owner who is not motivated or with an owner who will not meet the market.

We do a lot of marketing in my office and apartment owners is one of our lists. Driving around for dollars does work, but it is much more efficient to contact your local title company or use a list broker and mail post cards to a list. 100 is such a small number that I would expect you to only get 1 or 2 calls. If you need to go further out of your area to get a bigger list, then wholesale those properties and use the capital to buy in your target areas.

after reading the posts here, yeah i just realized what im doing isn't efficient! thanks for your post Aaron. Johnny, please email me @ the address below so I can talk to you about a few things - thanks guys!!

Tony,

I had a mentor with several decades in buying and selling apartment complexes for himself and his syndicate, and he told me the only way to really get into the apartment business is to write a letter to each of the apartment building owners in a particular market. Don't send them all out at once. Ask to meet with them and talk about the business, and about their building(s). And then, actually follow up with them. That's the way to do this business, by talking to other owners. Most of them love to talk about their properties! I will try to look up more of my notes of that conversation if I can find them. I'm swamped now, so it would take awhile. You might need to PM me to remind me. Anyway, he was one of the top in his field, and very knowledgeable. One great tip from him that I remember: Walk around the neighborhood of the complex or building you're trying to buy, and just talk to people you meet and ask them about that complex. He did that and one time somebody at the local 7-11 convenience store told him that every time it rained heavily, it flooded some of the lower apartments. Hmm. Somehow that wasn't mentioned by the sellers! A good tip.

Finally, let me add that soon, I will be a "motivated apartment seller" as we plan to put our 12 unit apartment building (a three story building in OH) up for sale. We've owned it for three years. If anyone is interested in knowing more about it, just contact me and I'll let you know when it's on the market. We're selling because we need the money to buy a mobile home park within driving distance to home. If any wholesalers want to take it on before we get it to market, move quickly!

Karen

Have you attended eviction court and checked on those who may have tenant problems? Good place to start then send out a post card to see if Owner is burnt out and tired of paying court fees for evictions.

Tony, I know this is probably a stupid question, but I'll ask anyway...Have you used the "Apartment Guide" in your area? I know these are typically the Corporate owners, but you may find one or two that way...I would guess. Good Luck! -Carl

Tony,

You can look on loop net obviously, but I a sure you are looking for an inside track. I believe it will be easier to find motivated sellers on mid sized buildings that are too small for on site management. Those buildings typically wear the owners out quicker than the bigger "hands off" properties with management in place.

You can also search the properties that have balloon payments coming due, but you may have the same problem as the original seller getting financed.

Good luck!! :mrgreen:

Karen - yes if you have more notes please share!

Dale - are you suggesting to attend the actual eviction case @ court itself? I did contact the courthouse directly this morning and ask if theres some sort of list or datrabase of eviction trials but they were unhelpful. What have you done in the past or plan to do in relation to this?

Carl - no question is ever stupid. Yours was borderline though. I'm just kidding =) thanks for the tip, I'll keep it in mind as I look around.

Rob - how would you suggest to find motivated sellers for those midsized buildings?

In most states all evictions are scheduled at the same time. Everyone shows up and then wait for your case to be called. For the tenants that show up - you get to hear their sob stories as to why they did not pay their rent. Most tenants do not show up so judgment is given to landlord if papers executed properly along with possession of the property. If unable to properly serve the individuals, no money judgment is given, only possession of the property. The bigger complexes send their attorney to handle their cases for them. Some have from 1-15 cases to handle for a particular property. They also may handle more than one complex so these are heard first and go rather quickly. Then it gets into the Mom & Pop landlords and their tenants. If nothing else, you get to meet the decision makers for a particular complex while there.

Rob - how would you suggest to find motivated sellers for those midsized buildings?

I am assuming that you are looking for buildings around the area you are in. I would just put a list together and put them all on a 7 part mail over the next 2 years. (make sure you send to the tax mailing address and no to the building) I would also call them and stop by some of the buildings and talk to tenants.

I know this is not a magic bullet solution, it is just what works. You will find a building this way if you follow through with it, I promise!! :mrgreen:

i got it Rob! So 7 mailings in 2 years? YOu know, I think my problem sometimes is i want it all now now now.. I would of thought 7 mailings in 3.5 months would of been ok but realistically, 2 years seems more logical. thanks for that.

Originally posted by Tony Nguyen:
i got it Rob! So 7 mailings in 2 years? YOu know, I think my problem sometimes is i want it all now now now.. I would of thought 7 mailings in 3.5 months would of been ok but realistically, 2 years seems more logical. thanks for that.

Yeah, unfortunately this is a farming and not hunting method! I get tons of my deals from things I started months or years back and just stayed in touch with them. Time and circumstances will change peoples mind. Usually over a couple years, you will hit someone at their time of need.

Tony, I think your only chance at finding a deal NOW is working with a broker who's already been farming for 2 years or to drive for dollars.

I HATE driving for dollars because normally its a massive waste of my time. However, I have been to a few properties to meet owners and noticed that they have their PERSONAL numbers on the for rent sign. This normally doesn't happen but I have seen it a few times.

You would need all of the stars to align and drive to apts in your target area, find a for rent sign, call the number and hope its the owner, hope the owner is motivated to sell, hope they are realistic about the value of their property etc etc etc

It could happen!

P.S. if you ever need comps to help determine whether or not you came across a deal on apt buildings in FL let me know, I would be more than happy to help out

I'm surprised no one mentioned tax delinquents or probate? While its rare to get a MF through probate, it's not unheard of, and when a landlord hits hard times financially, the taxes being paid seems to go to the wayside. This is more prevalent with the smaller units, < 10, but they're still out there. 

If you're looking the Phoenix area, let me know. This is my focus at the moment. 

I connected with a man who owns a property  management company and his own construction business, a great source for off market and other deals.

I believe that to address this area; one would need to operationally define "motivated seller." Are there any webinars coming up that can address this term. I hear this word phrase "thrown around" also for single-family homes and my guess is that if one can identify the seller's "motivation" that connecting with the seller would be the first thing in my pre-qualification and then "talk" about his/her current situation (e.g. burn out, divorce, relocation, etc). I tried to determine a "motivated seller" through the real estate broker(s) packaged deal. The RE brokers are reluctant to disclose anything about the seller. So one can proactively go to the tax assessors' office in your city and do research to determine whether there is a lien or other negative report that would start a negotiation process this is public information -- superficial at first but then once trust is built  with a series of phone calls or visits -- request a "certified document on the first year status of the property in question and in relation to a tenant's payment history. Before getting it under contract do an informal walk through and take notes; subsequently under contract "hire" a certified property manager and/or appraiser to compare notes. Things have a habit of mysteriously changing and no one likes a "hidden gotcha."

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