Purchasing Medium Multifamily on Loopnnet

18 Replies

Has anyone used LoopNet to find a medium sized multi family apartment complexes and actually close on it?

I look there, and @Erik Hatch is most likely right. Good deals are purchased off market. But for that to happen you need a network. 

Here is one piece of advice, if there is a property for sale in an area you like, stay in contact with the agent. Call them every 3 months or so, and tell them "when the owner really wants to sell, call me"

You may get lucky and find an owner who suddenly has a change of heart.

@Gaspare U. , this is sound advice. Building relationships and being persistent is the key. Oh, and patient as well. I was just listening to Warren Buffet and this aligns with his investment philosophy (and Ted Williams). Wait for the right pitch, you don’t need to swing at everything.

@Scott Morongell Is right. Some deals listed on LoopNet are listed by less experienced real estate agents. Not Brokers. With those agents you may have to tailor your approach and use simple terminology which may come down to a simple LOI with terms more favorable to the buyer.

I once invested in a multi-family deal that the syndicator found on LoopNet. It was a great deal too. But it's a special case. The property had sat on LoopNet for some time, with little information, and apparently few people bothered to dig in and reconstruct a proforma (for which you usually would want a T12 and rent roll) from scratch.

LoopNet is normally a graveyard when it comes to finding deals.  However on the rare chance you ever see a deal on LoopNet you want to contact the broker quickly because it will be "Under Contract" very soon.

Usually loopnet is where deals go to die. But occasionally every blue moon literally you may be find a gem under a rock. Most use loopnet as a way to get deal flow from brokers who have the most listings in their market on loopnet. Reach out to them, explain to them what you're looking to accomplish and request to be added to their list. Take care. Good luck

@Bryan Mitchell I’m currently househacking in a duplex detached that I found on LoopNet. It was a killer deal. When I’m able to move out in a few months I will clear $400 per door every month. I’m very new to rei, I have this property purchased in July and under contract for my second to close Friday, so maybe I had beginners luck. I personally watch loopnet as much as anything else and had no idea that “it’s where deals go to die” 🤷‍♀️. Maybe that’s how I was able to snag it so easily because everyone else assumes there’s nothing there.

@Sophia Segreto , Sophia, I suppose that it varies from market to market. I’m in the Atlanta area and I feel much the same as others, it looks like those listings have been picked over.

Originally posted by @Nik S. :

@Bryan Mitchell

I bought my first apartment complex on LoopNet. Just sold a commercial property on LoopNet. Underwrite the property, if it’s what you want go for it otherwise someone else will.

Well done Nik! You’re proving that it is a good tool. I’m curious to know how long it was on there before you put an offer on it. Or do you draft letters of intent?

 

My suggestion is to use every tool available, including MLS, loopnet, etc etc. that said, the most important tool IMO, is an experienced CRE broker.

I am in contract for a couple properties (12 unit and 8 units) I found on the MLS. They were not showing up on the CRE search engines.

Sooooo look everywhere and use all available tools :) 

Originally posted by @Bryan Mitchell :
Originally posted by @Nik S.:

@Bryan Mitchell

I bought my first apartment complex on LoopNet. Just sold a commercial property on LoopNet. Underwrite the property, if it’s what you want go for it otherwise someone else will.

Well done Nik! You’re proving that it is a good tool. I’m curious to know how long it was on there before you put an offer on it. Or do you draft letters of intent?

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Honestly, There are some newer brokers that list properties on there because they don't have a strong buyers list, so good deals DO appear on there. I've met others brokers who utilize all major online commercial portals (Costar, LoopNet, Crexi etc). I honestly look daily to see what posts as you never know whats going on, just like the MLS.

As I approach properties I am interested in purchasing, I ALWAYS submit an LOI first. That is pretty standard procedure these days in commercial buying, to make sure sellers and buyers are on the same page prior to drafting the PSA. The first apt complex I purchased, it was listed on LoopNet for a little bit of time. The market was VERY different (2014) than it is now. Things weren't as aggressive.

@Mary Mitchell , Mary I've seen the same thing in our area here. Often times small to medium size multi family are not listed on commercial sites. Instead, you'll find them on the MLS. most recently I was looking at an eight unit complex. It was actually listed by the owner on MLS and only there.

@Bryan Mitchell

While I tend to agree that stale offerings get placed on LoopNet, I absolutely love that the general consensus view is to avoid LoopNet. If everyone is avoiding the site or skeptical of

Everything that is being listed, that makes for less competition for the good deals when they do come up.

Pricing is a major component of what makes a deal attractive or not. There are some quality assets placed on LoopNet and costar that don’t sell for a long time, solely due to asking price and a seller holding out to see if they can get top dollar. High asking prices relative to buyers expectations will turn a lot of people away but that isn’t to say that overpaying for a deal can’t be a profitable strategy.

Conversions, redevelopments, or long term holds of core assets in prime locations can often overcome initially “overpaying”. It all depends on investor strategy and risk profile. If most people are looking for a light value add, 3-5 year flip then they will skip over deals that don’t fit their model. The deal might then sell to a 1031 buyer who needs to place capital and intends to hold an asset over the next 10-15 years.

Originally posted by @Bryan Mitchell :

Has anyone used LoopNet to find a medium sized multi family apartment complexes and actually close on it?

 Yes I have Brian. But the good deals are few and far in between. I have used Loopnet to find brokers.

Here's a deal I acquired through Loopnet: 48-units and I sold it for over a $1M profit.

Your investment toolbelt needs an assortment of tools if you want to be successful in commercial real estate and Loopnet is one of those tools (just one).  I bought a commercial property on there (put cash offer in within 24 hours of it being listed) and it appraised 50% higher than what I bought it for.  I bought it with cash and did a refi a couple months later.  Now I'm into the property for $0.  Bonus, it came with an additional vacant lot that I am currently in the process of developing multi family.  So, I agree with @Derek Carroll ...(regarding less competition) as much as people like to say "it's where deals go to die", you can still find a couple of live ones there that are just taking a nap and assumed to be dead.

BTW - @Michael Ealy - that's fantastic...I love hearing about deals like that - congrats!

@Bryan Mitchell - so true.  RE is just as much about the deals you don't do than the deals you do do.

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