Where to find apartment buildings for sale

[Glen Nash]

Hey BP, outside of the normal LoopNet, local commercial agents and cold calling does anyone have any other advice on how to find available properties? Looking in Louisville KY / Cincinnati / Indianapolis / Nashville areas if you know of anything 10+ cap 500k and under. Willing to to take on miss managed and improvements but not total rehab. Thanks in advance for the help. 

[Eleena de Lisser]

Originally posted by @Glen Nash:

 Looking in Louisville KY / Cincinnati / Indianapolis / Nashville areas if you know of anything 10+ cap 500k and under. Willing to to take on miss managed and improvements but not total rehab. Thanks in advance for the help. 

Identify a few submarkets within the cities you listed and then look for property management companies that specialize in or handle C-Class apartment buildings in those areas. Get acquainted with those property management companies. You can start with a phone call or email, but you'll eventually probably have to take a trip to that city to really get their attention and show that you're serious. 

I see that you've selected cities that are all within about 3 hour drive or less of where you live, which is good. So it shouldn't be too hard to schedule a day to take the owner of a property management company out to lunch. Tell him/her what you're looking for. You may want to try the same tactic with appraisers, real estate attorneys, local commercial insurance brokers, and small town bankers who work with community banks in those local markets. 

Meet people in person. Don't rely on email to build rapport. You'll distinguish yourself from the other out-of-state investors who are calling and emailing the same list of people by actually meeting some of them in person. All of these professionals, especially the property management companies, are in a position to give you a head's up about a property whose owner might be looking to sell or is considering selling. 

Also, you should look for commercial real estate events to attend in the markets you are interested in. Great way to network and meet relevant contacts. Also, check out the local REIAs in the cities you mentioned and see if they might be worth joining and getting a membership. That would be another way to begin to infiltrate a market and build a local network of contacts that can act as your eyes and ears in different locations.

But you're looking in some hot markets like Nashville. What size property did you have in mind? A 10+ cap rate with a price tag under $500K and minimal rehab is the multifamily equivalent of a unicorn in today's market. If you're willing to cast a wide net and go prospecting in semi-rural areas or inner city areas that might be economically challenged, you might find a small multifamily (under 30 units) that fits the criteria. 

A high cap rate indicates a higher level of risk. Higher risk, higher reward. In order to get that 10+ cap rate in today's market, the property will have some major strike against it, which could be the location, the condition, or both. It's not likely that a 10+ cap rate in today's market is going to be a slightly mismanaged property that only needs a little TLC. In any case, good luck!