Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
OK guys, help me out here. We're working on a new campaign for a large client, and they want to branch out into multi-family (4 unit multi's up to small apt complexes). Do you have any ideas about how to market to the owners of these properties? -- for example:
Are they found in the "absentee owner" lists (Listsource, et al)?
Or via data from the county or some other public source?
Would you send them something like a postcard or letter? What would be your value proposition?
Is it best to track these people down and CALL them (and send them direct mail)?
I'd love to hear from people that have had success in marketing to small multi-family in a competitive suburban market... or from YOU if you just have a great idea! Thanks, guys.
Real Estate Investor · Santa Cruz, CA · Member since 2009 · 267 posts · 73 votes
12y
Great questions. I can answer them fully.
I previously worked at Marcus and Millichap as a multifamily investment associate, and for 12 months, I made 250-300 cold calls per week. In addition, we sent out 3,000-4,000 postcards per month. Between these two strategies, we closed roughly $50,000,000 in volume in the Bay Area.
I'd recommend doing the same if you're aiming for a similar demographic. Most apartment owners are old school. They pick up the phone and converse with you if you have a solid interest generator and pertinent info to offer them. This demographic also responds to snail mail as well. Many of these folks aren't technology savvy, so traditional marketing tactics seem to work in my experience.
I've switched my strategy up a bit to incorporate networking events and referral based business from CPAs, attorneys and commercial lenders.
But nothing works better than simply picking up the phone and dialing for $$$$$$$$!
Good luck and let me know if you need anymore ideas.
Investor · Santa Rosa, CA · Member since 2012 · 127 posts · 90 votes
12y
I have heard you can market to building owners that have held their properties for 20 years or longer.. Found through county records.. The chances of them having equity are much higher, and the
Investor · Santa Rosa, CA · Member since 2012 · 127 posts · 90 votes
12y
I have heard you can market to building owners that have held their properties for 20 years or longer.. Found through county records.. The chances of them having equity are much higher, and the average apartment owner buys around the age of 45, 20 years later put them at 65.. More motivation.. Just an idea.. Evictions is a great way as we'll!!!Sorry about the 2 post before.. Best of luck!!!
Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
12y
I bought a list from listsource. Sent a detailed, professional letter. I got calls, but didn't close any deals. My list was quite small though as I targeted a very specific geographic market I was looking to add units to my portfolio in and I think it only went up to 10 or 16 units.
With 5+ units, you're dealing with a different type of investor. Not many people happen to come into a 10 unit apt building, if you know what I mean. Unlike houses where any Joe can try out being a landlord, the calls I got were from other sharks trying out-shark me.
I think with the right sized list, a deal could easily be put together, especially if you mention 1031 or other tax advantages the recipient might be interested in learning about. Make them an irresistible offer - a free info package or report if they call your toll free number. "Free" is most investors cryptonite. Have your CPA write something up for you (couple of pages would probably suffice) that just covers the basics about selling investment properties and put a short article in there by your preferred accommodator. Easy way to get them on the phone.
Real Estate Investor · Lincoln, NE · Member since 2013 · 584 posts · 353 votes
12y
Are you just looking in Texas or anywhere? If you are just looking in your local market, you can probably drive around and write addresses down then look up and call the owners. Obviously that won't work for markets outside your local area.
I own a 14 unit apartment building, so I guess I would be your target audience. I would not respond to a letter, mailing or email. However, I would probably listen to a phone call. I agree with @Joseph Caracappa that a significant percentage of multi owners are probably older and they would likely respond better to a phone call than email.
As far as the value proposition, that's simple. We are willing to buy your property with an easy closing at a price that will net you, the owner, a nice profit.
Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
12y
@Joey Budka might be able to give you some tips since he used to work for Marcus & Millichap.
In general, fear is the greatest motivator. 1031X is being under attacked right now so that might be a good excuse to start the conversation in your mailing or cold calling campaign. Unfortunately, these apartment owners tend to be more savvy than single unit owners.
In addition to suggestions above by others, I see buildings go to sell when the husband passed away and the wife inherited or the kids inherited it, and the kids want to cash-out tax-free. Also look for owners that self-managed and got burned out. Not sure how you can come up with those lists.
Real Estate Investor · Santa Cruz, CA · Member since 2009 · 267 posts · 73 votes
12y
Great questions. I can answer them fully.
I previously worked at Marcus and Millichap as a multifamily investment associate, and for 12 months, I made 250-300 cold calls per week. In addition, we sent out 3,000-4,000 postcards per month. Between these two strategies, we closed roughly $50,000,000 in volume in the Bay Area.
I'd recommend doing the same if you're aiming for a similar demographic. Most apartment owners are old school. They pick up the phone and converse with you if you have a solid interest generator and pertinent info to offer them. This demographic also responds to snail mail as well. Many of these folks aren't technology savvy, so traditional marketing tactics seem to work in my experience.
I've switched my strategy up a bit to incorporate networking events and referral based business from CPAs, attorneys and commercial lenders.
But nothing works better than simply picking up the phone and dialing for $$$$$$$$!
Good luck and let me know if you need anymore ideas.
If you want to leverage @Joey Budka 's cold call technique, but don't have the time to dial all day, you might consider getting a virtual assistant on odesk.com that speaks English well. Make a script for them, with key information and questions, and they can cold call and qualify people for you. A bit less personal than you calling the first time - but your objective here is to get the hook..(or "intern" / mentee, or assistant here in the US..)
Real Estate Investor · OR · Member since 2012 · 390 posts · 133 votes
11y
@Joey Budka you re to be admired for such great results. I am moving into the apartment niche, virtually, nationwide. I do not have a problem picking up the phone to dial for $$$. Where do you get the list you like to use for this? Just a list broker?
Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
11y
HERE'S AN UPDATE WITH EXAMPLES OF OUR MARKETING PIECES
We've had good results in Multi-Family, meaning our licensee that we first did it for - Tarek El Moussa (star of HGTV's "Flip or Flop") - got a positive ROI early on and we have continued the marketing to this group ever since. I don't know and cannot share his exact numbers (we don't get into our client's businesses or take a cut like a franchise does). I just know they reported getting deals from the campaign and decided to continue (we hit that prospect pool every 2 months). We've now been mailing into the Riverside County (CA) market for them for a year.
Our original marketing piece for multi-family was specially designed for Tarek, to leverage the notoriety that he and Christina have with their show. The approach was to make the back of the postcard read more like a LETTER than a typical postcard, which we felt was more appropriate for the Multi-Family owner. Here's the piece we went out with a year ago:
Since then, we have launched multi-family for another licensee - Frank G. Silveria III - down in the Stockton/Modesto market. For that, we made a generic MF postcard based upon the successful piece we made for Tarek:
We are very early on in Frank's campaign; not sure if he's closed any deals yet, but the response has been in line with our expectations. Feel free to check in with me later and I'll have more insight on how it's going in this 2nd market.
Other licensees in our program are now considering expanding to multi-family (MF). It is something that you really need to understand - there are a lot of differences compared to investing in Single-Family Residences (SFRs). So it's not something that people just "try". They have to have a specific strategy and process to approach multi-family, from the funding aspects, how to manage renovation projects that are much larger scale that an SFR rehab, having the proper business entity in place to own and operate MFs, etc. etc.
A couple of other things I'll mention:
DATA - We've used the multi-family lists from Listsource.com. Data quality seems good, as usual with Listsource. Allows us to define MF property types, # of units, market value, and equity % just like we do with the data on SFRs.
BRAND - When you have a brand that is all about buying houses, you have a challenge when going after MFs regarding your identity. We solved it with the simple addition of "& Multi-Family, Too!". That seems to work, and we may even have some of those recipients calling about an SFR they own, instead of or in addition to their MF property. But you may want to consider a special landing page for MF that is all about that, rather than sending to the SELL YOUR HOUSE page on your BILLBUYSHOUSES.COM website. In our marketing here, we are driving them to CALL rather than go to the site.
Hope that report helps you guys see how we've begun to do MF and hopefully there are some good ideas here that you might incorporate in your own MF marketing. There is a huge profit potential in MF; if you have your ducks in a row, give it a shot!
"Never let the fear of striking out keep you from coming up to bat." ~ Babe Ruth
HERE'S AN UPDATE WITH EXAMPLES OF OUR MARKETING PIECES
Our original marketing piece for multi-family was specially designed for Tarek, to leverage the notoriety that he and Christina have with their show. The approach was to make the back of the postcard read more like a LETTER than a typical postcard, which we felt was more appropriate for the Multi-Family owner. Here's the piece we went out with a year ago:
Since then, we have launched multi-family for another licensee - Frank G. Silveria III - down in the Stockton/Modesto market. For that, we made a generic MF postcard based upon the successful piece we made for Tarek:
A couple of other things I'll mention:
DATA - We've used the multi-family lists from Listsource.com. Data quality seems good, as usual with Listsource. Allows us to define MF property types, # of units, market value, and equity % just like we do with the data on SFRs.
@Dev Horn - Thanks for providing that very detailed feedback!
I have a few follow up questions that I hope you don't mind opining on:
1) Regarding the marketing pieces, do you find that you need to use MF specific direct mail, or can you use the same pieces that you use for SFR?
2) Do you recommend a specific sequence of marketing materials that you are sending out to the MF owners, or are you sending out the same postcard multiple times?
3) Which property type filter are you using to target the MF properties when using Listsource? I found in the area that I am targeting that when using Duplex, Triplex and Quadplex, LS was able to filter based on equity %, but once I went to Apartment or Stores & Apartment most of the leads where classified as equity % "Unknown". Do you have a similar experience?
4) Where you able to filter # of units when the units are greater than 5+?
5) How were you using market value to filter your criteria?
I have a few follow up questions that I hope you don't mind opining on:
1) Regarding the marketing pieces, do you find that you need to use MF specific direct mail, or can you use the same pieces that you use for SFR?
2) Do you recommend a specific sequence of marketing materials that you are sending out to the MF owners, or are you sending out the same postcard multiple times?
3) Which property type filter are you using to target the MF properties when using Listsource? I found in the area that I am targeting that when using Duplex, Triplex and Quadplex, LS was able to filter based on equity %, but once I went to Apartment or Stores & Apartment most of the leads where classified as equity % "Unknown". Do you have a similar experience?
4) Where you able to filter # of units when the units are greater than 5+?
5) How were you using market value to filter your criteria?
Thanks!
1) Definitely different marketing pieces. We are still looking for distressed properties, so some of the language is the same, but definitely a different piece for MF. We think it should be a bit more professional and not feel/look too much like "consumer" marketing.
2) Currently we are just hitting them repeatedly with the single MF postcard. We mail to them every other month, so they will (hopefully) see this piece 6 times in a year. A sequence would be great, but may not result in any measurable increase in response rate.
3, 4, 5) Listsource data varies by county as far as what is available (that you can filter with). So you may have to experiment to find out which combination of filters works best in your market (on Listsource.com). Here is an example of the filters we used in one of the CA counties:
Oddly enough (for MF properties), "absentee owned" reduces your list size considerably. So we're using it just like we use it on their SFR data.
In Riverside county, we just used the Residential: Multi-Family and Residential: Apartment property types.
Sometimes we just use (or don't use) filters because we are trying to get a certain size list - like if I want to mail to 1,000 MF property owners in San Joaquin county... I start with the broader MF list and whittle it down with Total Assessed Value, Equity % (when available), etc.
Sounds like you are getting traction. Seems like owners are getting slammed with mailers. I have been trying to get creative and bring in owners that can build a personal connection with me. Check out some of my mailers in the bp fileplace under marketing docs.
Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
11y
Very interesting, @Ariel Cohen. I think you are on to something there; you have exposed an issue that could have resulted in us only getting duplex, triplex, and quads in our 963 records. The course correction may be to pull these as 2 different lists (one using equity% and the other not using it) and then combining those 2 to get our total list. Based upon what you've found here, we are going to re-pull those lists.
In Riverside county, I believe we discovered that because I see in that county we used only the Residential: Multi and Residential: Apt property types and we did NOT use Equity% on that list. It's been a while since we pulled that one, but I think we discovered what you did - that those 2 property types do not have the Equity% data.
Investor · Valley Stream, NY · Member since 2008 · 71 posts · 18 votes
11y
@Dev Horn Are you guys calling up the leads that you are mailing to also or just waiting for them to call you?
@Joey Budka mentioned above that there is nothing like dialing for $$$$ but would also send postcards 3,000-4,000 postcards a month. I wonder is the calls were to the same prospect group or not and which yielded better results.
Real Estate Investor · Santa Cruz, CA · Member since 2009 · 267 posts · 73 votes
11y
Yes, our calls were aimed at multifamily owners in San Jose. Our postcards were sent to the same group. The dual approach yielded great results. It effectively branded our group as the number one team to seek out investment advice and brokerage services.
Yes, our calls were aimed at multifamily owners in San Jose. Our postcards were sent to the same group. The dual approach yielded great results. It effectively branded our group as the number one team to seek out investment advice and brokerage services.
What source were you using to be able to get the phone numbers of the owners? Is this something that can be obtained using ListSource?
Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
11y
Originally posted by :
Are you guys calling up the leads that you are mailing to also or just waiting for them to call you?
That's up to our licensees in the field - the consensus is YES you should mail to them AND call them. It's a challenge to find the phone numbers, which many people are finding just using Google.
I'm using Radaris.com to find phone numbers by addresses, in addition to 411.info to find numbers by name+city. It's pretty tedious but the results are usually good.