Multi Family Complex

[Sam Fried]

Hi am looking to buy a Multi Family Property in major MSA minimum 250 units where should I be looking to get a decent property with decent return?

[Brian Burke]

@Sam Fried, there is really only one way to do this.  Get to know the brokers who are selling deals of that size in the market you are looking in.  There will only be a few brokerage shops that specialize in this...for example, Dallas is a huge market for multifamily but there are only about a dozen or less brokerage houses there that sell large multifamily, and out of that dozen, there are probably 3-5 of them that sell the majority of the product.

I'll warn you, this isn't easy and it's a relationship business.  You can't just call up one of these brokers and say that you "want to buy 250 units so give me your best deal."  That would be like going up to the hottest girl at the bar and asking if she wants to go back to your place.  You'll probably get slapped in the face, but if you do it a thousand times you'll get slapped a 999 times, and the one that agrees will be the one that you'll regret later.  (This means that if a broker gives you a deal using this strategy it's because it's one that no one else wants and his shark instincts see blood in the water).

The strategy is to find the brokers, meet them in person, tell them what you are looking to do, explain your experience and how you are planning to fund the deal.  Show them that you are serious and that you are capable.  Remember that they have relationships with the sellers and they don't want to damage those relationships by recommending buyers that play games or don't close. 

It's unlikely that you'll get good off-market deals from them right off the bat.  There are two types of off-market deals: 1. Ones where the sellers want too much, or the property has problems that are tough to correct, so selling "off market" to a buyer that doesn't know any better is the only option.  2. And there are the great deals.  These are reserved for the broker's repeat clients.  Their best buyers.  Guys they can rely on.  Someone they can tell the seller "rather than going to market, I have a buyer that will give you a good price and get it closed with no hassle".  And they can only make that claim when they know the buyer well.  The guy that just came up to them in the bar isn't that guy.

What about writing letters to owners?  Good luck with that.  Re-read my second paragraph above, the same metaphor works here too.  I'm not sure how many letters I get like that because the staff that processes our mail throws them in the trash.  I never even see them. 

I get calls from brokers all the time discussing my properties. They know which ones I'm going to sell next and when I'm going to sell them. When I'm ready to sell, I'm going to reach out to one of the brokers I know...not some guy that wrote me a letter. You want to know that broker. He/she won't put it on the MLS, it'll go out as a broadcast email to all of the buyers that they know. If you are on that list, you'll know about it too.