Approaching Multi-Family Offers with Limited Data

[Tim McGarvey]

Hey BP - I'm hoping to get some feedback on a project I'm rolling out shortly.

I have a list of multi-family properties (16-120 units) in multiple cities that I'm interested in purchasing in North Carolina, Tennessee, and Texas.

I want to present the owners with a preliminary offer to them based on only Co-Star and public record data I have on-hand (also have Propstream and Reonomy). I have not spoken with these owners and do not have information on rents, operating costs, conditions, etc

The goal is to present a ballpark figure via direct mail to gauge interest, initiate conversations, reduce tire-kicking, and have more productive conversations.

What is the best way to approach presenting a preliminary offer to a multi-family property owner before having spoken to them?

Some ideas I had were:

- Finding cost/door data for recent sales for each city

- Assuming NOI based on market rent data

Obviously each of these methods has limitations, but I'm curious on everyone's thoughts on the most accurate way to get a ballpark offer price, based on limited amount of information.

Any thoughts or ideas would be appreciated!

[Will Barnard]

I could be wrong but making an offer without knowing the financials will likely result in the offer being too low (which will get limited to no response) or too high which may get you a response but then having to pull the offer or lower it once you realize the financials do not support your offer amount. Perhaps making contact with them and gauging their interest in selling should be step 1. When you get into the 100+ doors, you are typically going to be dealing with more savvy investors as well so your results can vary depending on the size you are marketing to.

Brokers should be a source for you, especially for the larger complexes and you will need to form a relationship with them first and prove your ability to perform.