How to Approach Commercial Brokers to Purchase Large Multifamily

[Khaled Seirafi]

Hi all,

My family owns 2 properties (1 triplex and 1 mixed-use commercial property) in the Bay Area that we're wanting to sell in order to invest in multifamily commercial property (mostly thinking a large apartment complex, or several smaller ones) elsewhere. We're currently thinking Dallas, Austin, Atlanta, and/or Phoenix.

I'm not familiar with these markets, but I know that we want to get out of California as the laws are becoming so strict on landlords and I don't see it getting any better. In addition, we're wanting to focus on more cash flow markets and based on my research and what I've been hearing over the past few years, these cities seem to be solid bets. I'm wanting to follow David Green's suggestion of approaching brokers, interviewing them, narrowing it down to one broker per city, and then have them introduce me to their markets. Of course, I'm going to continue doing my own research and much more in depth, but I want to visit these cities and get on the ground information as well.

I'm trying to figure out what the best way to go about this would be. I understand that commercial brokers are tougher to approach and they don't take you seriously unless you have proof of funds. I obviously would prefer to do the research, meet the brokers, and see what kinds of properties they can provide me before we go ahead and sell. Ultimately, we're looking to make big purchases. The properties we own are fully paid off and are currently worth $5.5-$6 million. We're looking to use those funds as a 50% down payment(s). My intention isn't to brag, but these figures should mean something to a potential broker, enough to warrant them to work with us even though we haven't sold yet.

My questions are: 1. How do I best approach the best and most connected commercial brokers? 2. Should we sell before seriously beginning the buying search? Capital gains tax is not a real issue as these properties belonged to my father who passed away a year and a half ago, so we got a step up in basis.

Any thoughts would be helpful.