What's the best way to build contacts to find apartment deals???

Question

I am just starting to get into the apartment game and I am looking for the best ways to build my contact list for people who might have, or know someone with, an apartment for sale. I’m trying to find people who are interested in investing in apartments themselves.  I’ve found a few Facebook groups and been to my local REI meet ups but feel like there are other places I should be networking. Any suggestion on the best way to network in the commercial world would be much appreciated. After all, the name of the game is network, network, network.

Greg Dickerson · Answer

Before you start reaching out make sure to educate yourself on the business and the market. You need to be able to ask intelligent questions that will convey to the broker you know what you’re doing. If they detect you have zero knowledge or experience they will not spend much time with you and most not all but most are not interested in educating people as they are looking to close deals and are very busy in this cycle.

Ian Stuart · Answer

@Cory Janson

Here are the people you want to network with.

1. Existing Owners: Networking with existing owners is a great first step. Meetups, local conferences, cold calling them to set up a coffee meeting, etc. If you develop strong relationships with existing owners, you have a shot at convincing them that you are a competent buyer. Thus, you may be able to arrange an off market deal and cut out the broker.

2. Investment Sales Listing Brokers: Listing brokers have inventory, and can provide you with deal exposure - as long as you don’t waste their time or ask too many “newbie” questions. That said, some of the deal hungry young brokers at M&M I’m sure would be more than happy to explain what a “cap rate” is if it means you’ll use them to write an offer on their senior’s listing.

3. Investment Sales Buy Side Brokers: If you want someone to hunt for deals for you, not a bad idea to find a buy side broker to look around once you convince them that you’re for real. That said, they’ll want to know that you have some experience / experienced partner, ample equity, a lender in tow, etc. Again, nobody is going to go out of their way to show deals to a tire kicker who’s just checking out the merch. Brokers and existing owners alike want motivated buyers willing to write an offer, put up earnest money and go hard, with a business plan and DD timeline put together, their equity lined up, and a lender in tow.

3. Lenders: If youre interested in a deal, have your lender run the numbers and quote your acquisition loan immediately so you know how much equity you need to come up with. Having loan quotes ready to go shows sellers and brokers that you’re serious about buying, and have thought it through.

If it’s your first deal, make sure you are as prepared as possible. Line up your equity partners, lender, deal type, and business plan in advance. Then start calling off market to set meeting with owners or start talking to brokers.

If you find a deal you like, write an offer with aggressive terms and tie it up. Know the DD timeline, get your reports done, get your loan under app, and crank it out.

At the end of the day, people want to know that you’re not wasting their time and are prepared to act decisively.

James G. · Answer

Make sure that you educate yourself about the apartment business and your market before you start building relationships with brokers. You only get one shot at a first impression, and the apartment community is rather small you'll find. You'll find the best deals through your broker relationships. If a broker likes you and knows you can close, he'll send his deals to you before listing them on the MLS. Once you build a solid relationship, make sure you do what you say you can do. If the broker finds out that you can't close on the deal, consider that relationship over!

Cory Janson · Answer

@Scott Morongell

@Jerome Myers

Jerome/Scott,

Thank you for the advice. I do remember hearing something about large apartments do not have to be posted on the MLS right away and can be held as pocket listings so that makes perfect sense. I will be looking into that 20 to 75 unit range to start off with and I will definitely start reaching out to more brokers.

Thanks again to you both.

Cory Janson · Answer

@Ian Stuart

Great advice. Thank you very much.

Jerome Myers · Answer

@Cory Janson i would look at the listings on the markets that you want to buy in and reach out to those brokers...

Scott Morongell · Answer

@Cory Janson welcome to the apartment game. I'd say 95% (and this is a total guesstimate) of deals over 75 units are transacted with a broker involved. Even if it's "off market" 9/10 times it is a broker showing it to his top 2-3 buyers and selling it to one of them without fully listing it and putting together a marketing package etc.

Build relationships with brokers. If you're looking in the 20-75 unit range you could handwrite or call owners since there's a better chance of them being a mom and pop.

Cory Janson · Answer

@Jerome Myers

It didn't tag you in my last post. I just wanted to make sure you got my thanks for the advice. I will definitely be reaching out to brokers.

Cory Janson · Answer

Thank you everyone.  Great advice on getting to know your area and market before you talk to a broker. I unfortunately learned that lesson the hard way and talked to a broker way before I should have. And you're right, you only get one shot and they aren't interested in educating you. I'll make sure to research before I reach out.

What's the best way to build contacts to find apartment deals???

Most Popular Reply