Best strategy to reach small apartment owners

[Patrick Flanagan]

I’ve had some awesome people on BiggerPockets tell me how they find small apartment buildings. The gap is convincing the owner to sell.

My question is what would you write to a owner that would make them really think about a offer. Me personally, there really isn’t much a investor could tell me to convince me to sell my 4 plex. So do I need to keep grinding until I find that one person that’s tired of their apartment unit?

Maybe I could find a under preforming 5-16 unit building that looks really run down. So I know I could add value, rehab the Property, increase rents, lower costs(all new water fixtures, water fixture flow reducers, smaller sized toilets to flush less water) then refinance the property after repairs.

Then go to them with what seems like a way over the top offer.

Let me know what you think about this “direct mail market letter”

“Hello my name is Patrick flanagan, I’m 27 and I saw your apartment building. Like my self, I see that you value real estate. The Benifits of real estate is so powerful! What if I could offer you a deal where you get a monthly check, you won’t have to manage tenants, toilets, or vacancies anymore. I understand how valuable your time and money is. So I’d like to offer to buy your property and give you the passive income of still owning this beautiful building. This will allow you to have more free time, while collecting a nice check each month.

If this is something you are interested in please call me.”

So id offer bank financing, then have the owner on a second position. So I’d owner finance a chunk of the loan and pay the owner a monthly check.

[Scott M.]

The numbers I am going to share are from 1999 give or take so they really do not apply, nor do they apply all over the country, that said, the sentiment still applies.  From an early mentor of mine who was an apartment wholesaler "If you buy a complex that is under 1M you bought yourself a full time job."

What he meant was buying a complex that was too small that it couldn't afford an onsite manager meant you're it.  if you buy one large enough to afford an onsite manager  you might share that responsibility or be able to turn most of it over to them and then you are more overseeing/managing it VS running it.  

He wasn't advocating for one or the other.  Wasn't any judgment on it for either side.  Was just helping manage my expectations so I could decide what route was for me.  So, if I was working a full time job that I didn't want to leave, buying a smaller one might not work for me. 

Was always grateful for that advice.  Maybe you will find value it in as well, maybe not : )