Finding off-market Multifamily Deals: In Detail!!

47 Replies

Hello BiggerPockets,

I am wondering if the same principles applied to finding off-market single family residential deals would apply to those in search of finding off-market multifamily (triplex & up) deals. The reason that I am asking is that it is very hard to find a good selection of (triplexes and quads) in my area but I have driven around and have seen plenty that could be written letters to with intent to purchase.

How would you go about contacting the owners of these properties?

* Direct mail campaign that singles out owners with large equity & absentees
* Handwritten letters sent to the mailing address of the owner of the complex.
* ETC

Please help in brainstorming or sharing some stories on how you've found some great off-market multifamily properties to acquire.

@Robert Lapp you've already go a couple of good ideas.

You might want to add out of state owners and time of ownership. Someone who has owned 20+ years may be ready to retire. More recent buyers my be burned out and ready to give it up after 2-3 years.

Also look for evictions in small multi units. Someone with a recent eviction or two with triplex may be fed up. good luck - Ned

Medium crab1 copyNed Carey, Crab Properties LLC | http://baltimorerealestateinvestingblog.com/

@Ned Carey , you always are providing solid advice. Where can I find eviction info? Courthouse? and then Ill also have to find out where I can get info on those that have owned that long and out of staters.

I know that listsource offers a way to gather that info. is there any way specifically that you use to compile that info on multifamily or triplex quadplex properties? as far as i know you can only use that for single families but i may be wrong.

thanks Ned

Do you have a relationship with commercial brokers? I would encourage it as they have off market "pocket" listings they can bring to you for consideration

If you can find individual sales closed 7 to 12 years ago, many will consider selling as the tax benefits dwindle, as maintenance becomes due, as they get tired of collecting rents and may want to just get a check in the mail from thier note.

Always look to the retirees as Ned suggested, great opportunities for buying in bulk or multis. :)

Medium logoscopiccroppedblue2Bill Gulley, General Real Estate Academy | https://generalrealestateacademy.com

@Dennis Tierney , i didn't consider that route but definitely one I could utilize. I'm looking more for commercial properties in the B space, and most of the connections that I have deal with A-class primo stuff. I'm guessing a good source to find brokers would just be a google search in the area correct?? Thanks for getting my creative juices flowing.

@Bill Gulley . That is exactly what I want to hear!! The retirees would be a win-win. I take a property off of their hands to get myself into the deal and they are able to continue that income stream hassle free. Any data sources that you use to collect info on where these properties with these specific target criteria are located? That'd be helpful! otherwise you've set me on the right track to ask the forums on how to accomplish that.

Keep up the replies and posting!

It's human intelligence, as with an intelligence agency, nothing to do with IQ.

Select buildings that are basically in your price range. See when and who purchased them. Check out owners and who they are. Keep your eyes and ears open. I'd also say approach them by phone, see if they would entertain selling. If you see some older guy cleaning up a rental, that's a good time to stop and just say hello. I picked up over 20 deals just because I stopped and said hello and asked.

Never used a yellow letter in my life! I used the phone and personal approaches, always, in everything. :)

Medium logoscopiccroppedblue2Bill Gulley, General Real Estate Academy | https://generalrealestateacademy.com

In my area I literally go to the courthouse where rent court is and pull the filings. Your area may have a list available, or through a court filing search. In MD we have a great case search online but it doesn't cover rent court.

Length of time owned various list services or date providers can get you that.

Good luck - Ned

PS thank you for the compliment.

Medium crab1 copyNed Carey, Crab Properties LLC | http://baltimorerealestateinvestingblog.com/

@Robert Lapp i've had good luck finding brokers (not deals) through loopnet. i use it to see which brokers are active and then give them a call on one of their deals, talk through it, talk about what i'm looking for, etc. one of my best deals was an off market deal brought to me by a broker i met this way. another way to find brokers is through the ccim website. http://findaprofessional.ccim.com/search

Kevin Young, Central Pacific Communities, LLC | http://kevinpaulyoung.com

@Bill Gulley , I'm assuming that once I find target buildings like you mentioned (triplexes, quads etc), I could find out who the owner is by knocking on doors or just doing some research on county tax assesors website?

I think thats amazing that you were able to get 20 deals from just saying hello. Would you have any interest in doing an article on BiggerPockets for readers like me on that subject in detail? thats great stuff as most people would like to connect with owners not over yellow letters.

@Ned Carey , I will go find out where the rent court is at my local county courthouse and start pulling those files! thanks again Ned.

@Kevin Young , I have tried contacting a few brokers through the loop net but most dealt with larger multifamily properties, but I definitely will have to give that a shot and I think thats a fantastic idea. How often do you touch base with your brokers to see if they have any new deals in the pipeline or do you have it set up that they just reach out to you?

When you get a retiring LL, you pick up several deals from each.
I got better deals from owners and not going through a broker, but that can be good too. I like Ned's idea as well, much of the info can be found without driving. If you're the kind of person that never met a stranger, you'll do good! :)

Medium logoscopiccroppedblue2Bill Gulley, General Real Estate Academy | https://generalrealestateacademy.com

@Robert Lapp Larger multifamily properties are often financed using a 5-7 year balloon loan. I would guess that most owners ask themselves, "do I want to sell or refinance this property?" I have never done this, but you might consider approaching owners who have owned their property for around 4-6 years and see if they want to sell. You should be able to find this information on the county website.

@Robert Lapp with regard to contacting brokers, i tend to reach out to them if I don't hear anything in 3-4 weeks. sometimes they'll give me a call sooner ... but if they haven't by week 4, i'll reach out [as reminder that i'm still around and looking]. you need to feel it out, everyone is different and this business is relationship based. don't bug them, but don't go too long between calls. some of the brokers are more chatty and some are all about business. so, it just depends, i guess. use your best judgement.

before i end the call, i always remind them that i'm ready to buy and ask they to get me a call if they find something. if they don't have a deal i tend to catch up on what's been going on and get a 'read' on what's happening in the market when i talk to them.

Kevin Young, Central Pacific Communities, LLC | http://kevinpaulyoung.com

I bought a list of small multis from @Jerry Puckett . Filtered down a little and sent out 80 yellow letters. I got 16 calls (that's 20%!) and just closed on a 4-plex from that list a couple weeks ago.

More than likely it was just beginner's luck, but hey, I'll take it.

@Bill Gulley , thanks for the reply to this thread, I think its becoming something that'll be a good source for other people just besides me that had that same question in mind with regards to finding off-market multi properties. I wonder if there are a few retiring landlords at my local REIA.......? Either way I certainly am very personable but still have lingering shyness so I will have to use your never met a stranger mentality and really dig in.

@Jon Klaus , thanks for chiming in on the discussion! It looks like Bryce just replied so I'm going to hear what he has to say on the mailings.

@Blaise P. , Thanks for that creative thought, I never looked at it that way so it is certainly something that I need to dig deeper into. Are we talking county tax assessors records for that type of info that you're referring to? Hopefully you'll reply back to go into more detail but amazing idea!

@Kevin Young , Hey I certainly like the constant connection that you have with these individuals in order to keep ideas in the pipeline. First stop for me after jumping off this post is marking down those brokers that are listing on loopnet. I certainly thing you should write an article on just that alone. Sample title: How to maintain contact with your Brokers etc. Thanks again!

@Bryce Y. , congrats Bryce on closing on that 4-unit. Thats exactly what I am in the market for currently. Could you go into further detail on how you and @jerry puckett compiled this list or is this one of his services? any further details you can share would certainly help me and others that are reading this thread!!

keep the Thread strong.

@Robert Lapp
Yes, you could go to the county assessor's page and look for commercial properties that were bought 4-6 years ago. It is possible that the owner is open to selling it at a time when there is no prepayment penalty. Again, I have never done this, but it seems doable.

@Robert Lapp

If you go to the county assessor's website, you can look up property details. Usually the state code will tell you the type of property. Typically a 4-plex will be something like A-4, triplex A-3, etc. Thing is for Dallas County they don't have a definitive state code for 3-4 plexes; you might have to look in the legal description and even then it would be difficult. For example, my 4-plex was classified as commercial multifamily. So I called Jerry to work his magic.

You can usually request an appraisal roll for all real property from the county (you may have to pay a few bucks, some are free). You will need a way to process the data (usually excel is not enough). From there filter for state code, etc.

@Bryce Y. and @Blaise P. . the combination of the information that you two gave me will give me a great head start on compiling the exact data that I need. It is greatly appreciated!!

I'll be looking up the specifics for the state codes in North Carolina and how that relates to the type of building.

Cheers!

For evictions, I have been calling the courthouses that do eviction and ask for the Sheriff Levy Crew. These are the guys that actually show up for the the eviction after the judgement has been decided by the Judge/Commissioner. I network with them and get leads of evictions from them and then offer a referral fee. No fee unless I buy and I get all the info for free.

wondering if @Jerry Puckett would have anything to add at this point on compiling lists and any way that we can connect on obtaining his services. I'm sure a lot of people would be interested!!

Looks like the mention didn't take. Pinging @Jerry Puckett for input. This thread is very valuable, not many others touching this topic. Thanks to everyone for their input.

suppose @Jerry Puckett may be a little busy after his podcast. which was good by the way. IF anyone else wants to chime in with anecdotes that would be awesome!!

Howdy,

I think that the ways that you all are marketing through direct mail, etc. is great. I just tried to do the same through Listsource which has great reviews from people on BP and it has a friendly software interface. But here has been the rub that I have had; I ordered a list for a geographical area around Kansas City to include 4-30 unit buildings among other criteria. Listsource, doesn't do Kansas and sent me a list that included individual condo owners, which makes up half of the the list and the other half is suspect. I have been trying to get in touch with their customer service people, but after holding for more than 30 min, I was put in touch with some who barley spoke English and certainly didn't understand what I was trying to accomplish.

Has anyone else had this experience with them and what can I do to make my list better? I am also now looking at using ListAbility.

I still think that this is a great marketing tool that I used when I did SFRs but now I am stepping up to MFR.

Thanks in advance!