Can i wholesale Multi Family Apartments 5-16 units?

Question

I dont have much experience, but i know how to analyze deals.

I dont want to wholesale Residential SFR houses.

Is it reasonable to start with 5-16 units?

Russ Scheider · Answer

@David Lilley  In March 2019 I assigned a contract for purchase of a 12 unit apartment complex in South Carolina.  The owner/manager had died and his widow was not interested in managing the property.  I have wholesaled other 8-12 unit complexes in years past.  I have the resources to close most of my deals myself and can provide POF and other credentials.  I simply don't want to take on the major rehab or property management.  In my experience, the wholesale market exists to serve the distressed seller (mostly mom-and-pop).  In my experience, these are typically 24 units or smaller and poorly managed (usually self-managed).

I would not expect to wholesale a Class A 100 unit apartment building, although it certainly could be done.  Your point is well-taken.  If 99% of  multifamily owners are seeking top dollar, we serve the 1%.  Not low-hanging fruit by any means, but I do 1-3 of these small commercial deals per year.

Russ Scheider · Answer

@Frank Bonzai, I have assigned contracts on residential, commercial, and multifamily properties as well as vacant land.  I have a good friend who wholesales boats/yachts using assignment of contract.  The property class does not matter.

Danny Randazzo · Answer

@Frank Bonzai you can absolutely do that. I would talk to @Russ Scheider since he is an expert with hundreds of wholesale deals completed.

David Bokman · Answer

To answer your question, YES, You can! Not sure about starting out that way but you can certainly wholesale multi-units. A few months ago we wholesaled a 48 unit. Any kind of real estate can be wholesaled.

Greg Scully · Answer

@Frank Bonzai - I would think so.  You're more likely to find Mom and Pop owners who may be motivated.  There is also a large pool of buyers looking to get started with that unit size.  Like @Hadar Orkibi said, be sure it's a good deal and have some preliminary analysis to back it up.  Best of luck to you.

David Lilley · Answer

@Frank Bonzai it will depend on the market. In any kind of competitive market, there is no way a seller will go under contract with you if they know you aren't going to buy the property. They want the certainty of closing; too much risk relying on you to find a buyer.

Secondly, 99% of commercial multifamily owners are sophisticated investors. They know what they have and they know that if they want to get top dollar for their property then they need to expose it to the market. So, it is possible to find an off-market deal but unlikely.

@Greg Dickerson @Russ Scheider can you guys share the specifics of the commercial multifamily deals you two have wholesaled?

Greg Dickerson · Answer

A couple of them are too lengthy to go into here. I have done entitlement land flips (contract assignment) vacant commercial buildings and several residential building lot flips and even a restaurant leasehold space.

Basically you get a property under contract well below market value find a buyer and it’s on the contract. The type of asset does not matter. The key is find assets under value and in high demand.

Hadar Orkibi · Answer

@Frank Bonzai makes sure you know the laws in the state you will be wholesaling.

And make sure you know how to underwrite a commercial size multifamily.

The key with been successful as a wholesaler is to provide investors with solid opportunities, together with supporting information why the deal is so good. so many time I been offered "opportunities" that turned out to be crap deal, with no value add in war zone, and over priced.

If a wholesaler presents me with deal like that i would never bother working with him/ her again.

Greg Dickerson · Answer

@Frank Bonzai yes you can wholesale commercial, multi family, land, industrial, businesses, leases etc.

I have done some very large commercial wholesale deals. Mid six figures on single deals.

Remember wholesaling has nothing to do with the property or asset you are simply a signing a contract.

David Lilley · Answer

@Russ Scheider Great info, Russ! Thank you for sharing!

Can i wholesale Multi Family Apartments 5-16 units?

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