Finding Larger Off Market Multi-Fam Deals....

[Ryan Lockstein]

HI BP,

I have been wholesaling/flipping SFR's for a couple years now full time. Typically I am using Direct mail and web leads to get my deals. We have recently obtained funding to do a larger Multi-family deal (10-40 units). Just seeing if anyone has experience in finding great off market deals in this type of property? If so what type of marketing or hustling are you doing to get those deals?

[Jonathan Twombly]

@Ryan Lockstein Everyone wants the elusive "off market" deal.  But, by definition, it doesn't exist.  If a property is available for sale, it's on the market.  Now, it may not be widely marketed, which means it is only marketed to a select number of proven investors, but that is about as close as you will get to an "off market" deal.  Another word for these deals is "pocket deals," so-called because brokers share them only with their go-to investors.

That last phrase should give you an idea where this is going.  If you want a broker's pocket deals, pretty much the only way to get there is to have closed a deal or two with that broker in the past.  You need to establish yourself as an investor with the proven ability to close before brokers will start showing you their pocket deals.

The only other way is through some kind of personal connection.  We got our first deal  (102 units) because one of our partners is partnered on several deals with the broker's uncle, so we were taken seriously by the broker from the get-go.  Our second deal (132 units) was a pocket deal we got from the same broker because we closed the first deal with them.  Now we're seeing pocket deals from these brokers on a regular basis.

You could, in theory, try to network with owners and deal with them directly to get off-market deals.  But it's a bit unlikely that they are going to take you seriously unless you've already closed some deals you can show them.  And, most likely, a seller is going to want to go through a broker, because they are going to get a better price from a widely or selectively-marketed property.  That's why there really is no such thing as "off-market" deals.  If you were selling a property, you'd want to get the most money for it, and that really involves going through a bidding process with a best-and-final round designed to extract every last penny from the buyers.