As the creator of the “Buy Your First Apartment Building E-Course” I have many potential students and beginning investors ask me, “How do I find motivated apartment building sellers?”
There are many ways that investors use to find motivated sellers, however, what I see happening many times with beginners is that they start looking for properties to purchase before they thoroughly understand how to identify a truly profitable opportunity. Here are my recommendations for how to begin learning about multifamily investing and then how to find motivated sellers.
Begin by learning what makes mult-family property profitable by taking these steps:
- Study and learn about what makes an apartment building profitable.
- Read as many books about real estate investment and apartment building investment as possible. It is a lot easier to learn from other people’s mistakes. There is no need to reinvent to the wheel.
- Find a reputable real estate investment club in your geographic area and meet with the commercial investor members. These “old hands” are a valuable source of market information.
After the aspiring multi-family property buyer has received a thorough education by reading books, industry magazines and networking with other commercial real estate investors then he or she is ready to begin the process of searching for an actual property to purchase.
Contacting Commercial Realtors
A great reference source for finding well educated commercial real estate agents is the CCIM website. The CCIM is a professional designation that qualifies a commercial real estate professional as capable and knowledgeable in the field. You can also find commercial real estate agents using a simple search on the web.
When searching for a commercial real estate agent take these steps:
- Speak to a number of commercial realtors in the area and ask about “pocket listings”. Pockets listings are apartment building owners that the experienced realtor might know who are serious about selling their building but they have not listed the property yet.
- Find a commercial realtor who specializes in multi-family investments. A good commercial realtor who specializes in multifamily properties should have a great knowledge of what apartment buildings have sold for recently.
Alternative Strategies for Finding Apartment Building Deals:
- Place an ad on Craigslist stating what you are looking for:
“Looking To Sell Your Apartment Building? I am a commercial real estate investor interested in buying multi-family property in Philadelphia between 5 and 100 units. I am looking for owner financing over five years with 5% down or will buy with a 20% down payment and a bank loan.”
Or, here is an ad that I copied directly from Craigslist this morning:
I BUY MULTI-FAMILY PROPERTIES W/SELLER FINANCING OR QUICK CASH. Need to sell?
Moving? tax benefits run out? call me for a offer.
- You can also place the same ad in the commercial real estate section of your local newspaper but be prepared to pay a handsome sum for the ad and also be ready for unsolicited calls for real estate agents. Newspaper ads do work but you are better off using free or more direct methods like direct mail.
- Another strategy is to contact the owners of commercial real estate directly. This can be done in a number of ways. Multi-family owners can be located by researching the tax records of a metropolitan area. Usually, the owner of record will be 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 accomplish. The purpose of letter to have many interested apartment building owners contact you. You should leave your phone number, mailing address and email address for sellers to contact you. You should make it very easy for the sellers to get a hold of you. Remember, you will need to look at dozens of deals and sellers before you find the one that fits your investment criteria. You can also contact owners directly by telephone. Keep in mind that multifamily property owners are usually very busy so you might want to write a script or have talking points written down so you are able to get right to the point and get your message across accurately.