I will try and keep this as short as possible for time and reading purposes.
I first came across real estate investing after looking for ways to earn "passive" income while also being able to improve communities. At first I was interested in amassing a large portfolio of SFH over the course of the years that would eventually replace my W-2 income. After putting together a 5 year plan to reach my goals, I quickly realized the problem with scalability with SFH. After all, my end goal was to get into apartment and hotel investing. After doing some more research on large multi family investing, and reading countless comments about others wishing they would have tried starting apartment investing and/or syndication sooner, I came to conclusion this is where I'd like to start.
Fast forward to today, I have spent time studying and learning as much about multifamily investing as possible. I have networked and continue to do so on a daily basis and have been fortunate enough to have been tasked with finding large apartment complexes to invest in by a group of investors I met at a seminar.
With that being said, I have begun looking for deals however I wanted to ask those with more experience the best places or people to contact about potentially purchasing a complex? I know to reach out to commercial brokers, however I’m trying to determine the best way to reach out to PM about purchasing and could use some advice.
These investors have taken the time to teach me over the past few months and it is my goal to return that value to them by bringing them a deal or two.
Thank you in advance.
I would suggest sourcing your team (including property management) from the commercial broker. They have most likely worked with dozens of people and companies and can point you in the right direction. This saves a ton of time. In regards to reaching out to brokers, you need to show that your group is professional, has experience and is able to close. They are all working on commission. You need to have your property criteria narrowed down. Next, what are you going to do when you get a deal? Are you underwriting? What is your plan for the property? Required returns? etc.
Hi @Andre Jernigan , I love your question ;)
Brokers is one way to find large apartment complexes.
One way to find brokers is through Loopnet.
Still another way is to seek out Property Management companies that specialize with 100+ unit apartment complexes.
You can cross-reference your property search on Rent.com or Apartments.com to see which large apartment complexes have low rating/bad reviews. That could indicate those apartments are not being managed very well and hence, the seller might be willing to sell.
Hope this helps!
@Charles Carillo I was thinking along those same lines of speaking with the commercial brokers about different companies to reach out to. Luckily this group does their own property management. When it comes to criteria, things have been narrowed down to where we have a good idea of what we are looking for. A big thing I was thinking about was how they are paid on commission and how I’d like to make sure they know they aren’t wasting their time. Aside from a sort of presentation, slide deck, is there an effective way to present the level of professionalism? The group certainly has the experience so I suppose I could leverage that correct?
@Michael Ealy I’m glad you enjoyed the question :)I’ve started reaching out to brokers to start building relationships. Actually I went through loopnet and found the brokers who were listing different properties and started contacting them to connect.
Property management is where I’m going next. I had been trying to come up with the perfect way to contact them about purchasing properties they may manage or asking about owners that might be looking to sell. However I’m starting to realize there is no right answer. It’s funny you mention rent.com and apartments.com. I was looking Last night and found a property with quite a few complaints. I’ll be reaching out to their management today ;) I appreciate it.
What I don’t quite understand is why an experienced investor with sufficient cash available and serious about purchasing an apartment complex would engage the services of a relative newbie, who lacks contacts, experience, knowledge and deal flow when they can engage the services of a commercial real estate broker who has all the above and a network of hundreds of agents to act as their representative? This fact alone makes me question the willingness and ability of the investor to close.
A few reasons come to mind
1. The investor’s expectations are so unrealistic that brokers don’t want to waste their time with them
2. The investor’s expectations are so unrealistic that brokers can’t find acquisitions that match their criteria
3. The investor can’t provide proof of funds
4. The investor doesn’t qualify for financing
5. The investor lacks any experience in multi family investing
6. The investor is inexperienced, not serious, and is merely “testing the waters”.