Updated: Mar 7
Every real estate investor is dreaming about finding that perfect off market deal. If you’re not familiar with off market deals, they relate to multifamily properties that aren’t marketed in traditional methods on the Internet or shared with everyone. These deals are generally available from brokers who often call them “pocket deals,” because the broker is holding the deal close to his or her pocket. Very often the broker has a close relationship to the owner and is given the listing. At other times, the owner reaches out directly to investors or syndicators to make the sale happening. There are many reasons why off market deals are more attractive, but I believe the two biggest ones are a better price and a faster process. Off market deals prevent me from getting into a bidding war with other syndicators or investors. This is especially important now because prices on multifamily properties have escalated well beyond reason, simply because everyone wants to jump on the multifamily bandwagon. At times people bid up the price simply to “get the deal,” with the result being an overpriced property. As for a faster process, off market deals mean that I don’t have to spend time on marketing the property or spending time with many different buyers.
The key, of course, is to find off market deals. I use a variety of tactics to find those off market deals, which I will share with you in this article.
Finding Property Owners
One way of finding off market deals is to find property owners. To do that, you’ll need to do some homework.
There are some free resources available to you. Start with the county assessors websites, which have property listings. Many documents have information that is attached to the property listing, including the owner’s name(s).
You can also use paid resources to find the owner of a property. They vary in price, but you can try PropertyShark, YardiMatrix, CoStar and ListSource. The Internet has a wealth of information available; so once you have an address of a property that appeals to you, hit the computer.
Cold Calling or Mailing Owners
The biggest reason to place a cold call to a multifamily property owner is that you get to speak with him or her directly. There’s no broker or agent involved, and you can use your own unique approach when calling. You’ll want to have a call “script” available when you do connect, but as I’ve learned, you don’t want to stick to the script. Let the conversation unfold and then make changes as needed.
For example, you could call the property owner and state that, “I’m calling about your property on (street name). I buy multifamily properties and I currently own (number) units. I passed by your property yesterday and was wondering if you’d consider talking about selling it?”
It’s that simple. Direct, honest and you quickly get to the point. The owner will probably ask you questions like, “How did you find me? How much are you willing to pay? You mentioned you have (number) of units - tell me about your experience in real estate investing.” On the other hand, he or she may say “No.” In that case, you’ll need to try to find out why they’re not interested.
The fact is, everyone who owns a multifamily property has a “pain point.” You’ll just need to find out what the owner’s pain point is. If they continue to decline, ask permission to stay in contact with them and then be sure you reach out every 3 to 6-months. You might send an article on a similar property or a comparative of a property that recently sold. The bottom line is to keep your name in front of the owner so if they do reach a point where they are considering selling, your name will come to mind.