As the creator of the Buy Your First Apartment Building e-course, I have many potential students and aspiring investors ask me: “How do I find motivated sellers for apartment buildings?”
There are many ways investors use to find motivated sellers, however I often see the following happen to newbies: they start looking for a property to buy before they have a thorough understanding of how to find a truly profitable opportunity. Here are my recommendations on how to get started looking into investing in multi-family homes and then how to find motivated sellers.
Start by examining what makes multi-family real estate profitable by following these steps:
- Explore and discover what makes an apartment building profitable.
- Read as many books as you can about investing in real estate and apartment buildings. It is much easier to learn from the mistakes of others. There is no need to reinvent the wheel.
- Find a reputable real estate investment club in your area and meet the members of a commercial investor. These old hands are a valuable source of market information.
After an aspiring multi-family real estate buyer has received a comprehensive education through books, trade magazines and contacts with other commercial real estate investors, he or she will be ready to begin the process of finding a real property to buy.
Communication with commercial realtors
An excellent reference source for finding well-educated commercial real estate agents is the CCIM website. CCIM is a professional designation that qualifies a commercial real estate professional as capable and knowledgeable in their field. You can also find commercial real estate agents using a simple internet search.
When looking for a commercial real estate agent, follow these steps:
- Talk to a number of commercial realtors in the area and ask about “pocket listings”. Pocket Lists are apartment building owners that a seasoned realtor might know who are serious about selling their home, but they haven’t listed properties yet.
- Find a realtor specializing in multi-family investments. A good commercial realtor specializing in apartment buildings should be well aware of what apartment buildings are selling for recently.
Alternative strategies for finding deals with apartment buildings:
- Advertise on Craigslist specifying what you are looking for:
- You can also post the same ad in the commercial property section of your local newspaper, but be prepared to pay a decent amount for the ad and also be prepared for unwanted calls to real estate agents. Newspaper ads do work, but you’re better off using free or more direct methods like direct mail.
- Another strategy is to contact commercial property owners directly. This can be done in several ways. Multi-family owners can be found by examining local tax records. Typically, the owner of the record is listed along with his or her or contact information. The next step is to write a letter that explains who you are and what you are trying to achieve. The purpose of the letter is for many interested apartment building owners to contact you. You must leave your phone number, mailing address and email address for sellers to contact you. You need to make it easy for sellers to get you. Remember, you will need to browse dozens of deals and sellers before you find one that fits your investment criteria. You can also contact the owners directly by phone. Keep in mind that apartment owners are usually very busy, so you might want to write a script or transcript for discussion so you can get straight to the point and get your message across.
“Do you want to sell your apartment building? I am a commercial real estate investor interested in buying a 5 to 100 unit apartment building in Philadelphia. I am looking for financing from the owner for a period of more than five years with a 5% discount or I will buy with a 20% discount. down payment and bank loan “.
Or, here’s an ad I copied straight from Craigslist this morning:
I BUY MULTI-FAMILY PROPERTY WITH SELLER FINANCING OR FAST CASH. Need to sell? Moving? Are tax breaks over? call me for a suggestion.