Cincinnati Apartment Complex

[Nic Cooper]

I'm coming to Cincinnati next Thursday, April 4th to see if it is the right place for me to build a team. I am looking to purchase an apartment complex with 10+ doors in a B or C+ neighborhood. Value added is a plus. I have bought SFR, but this is my first time interacting with commercial real estate agents. What's usually the etiquette? Do I send over proof of funds so that they know that I am not a tire kicker?

[Spencer Gray]

@Nic Cooper brokers will know you are serious by the questions you ask and if you actually submit an LOI or not. There's no reason to get ahead and show proof of funds, it's rarely asked for in my experience anyway. I wouldn't come across too eager, the first deal you find probably isn't the best out there. Usually it takes looking at a dozen before one is worth making an offer on.

I would have to disagree with @Bjorn Ahlblad with needing a "buyers agent." Commercial deals very rarely involve a buyers agent and having one is a good way to not get a recommendation from the actual broker since they will have to split their commission. Also the fact that you have one will tip your hand by showing your lack of experience. If you need assistance on the purchase side I would utilize your PM and your (ideally local) attorney which you'll have to have anyway and should be able to help guide you through the process.

If it were me I would not plan on making any offers your first trip and spend your time meeting potential team members, brokers, driving different sub markets and touring different properties (on and off market) in those markets. The chance that the perfect deal you are looking for just happens to be on the market right now probably isn't the case. Once you have the groundwork laid, team in place, go home and underwrite all the deals that make it through your deal funnel, have someone on your team tour it, report back, then send in your LOI if it checks all your boxes. I wouldn't tour it until personally until an LOI or PSA is executed and you are in the middle of DD. Otherwise you're going to eating into your ROI by flying back and fourth.

EM stands for Earnest Money.