As the creator of the “Buy Your First Apartment Building” eCourse, I have many potential students and beginning investors who ask me: “How do I find motivated apartment building sellers?”
There are many ways investors use to find motivated sellers, however what I see happen a lot of the time with beginners is that they start looking for properties to buy before fully understanding how to identify a truly profitable opportunity. Here are my recommendations on how to start learning about multi-family investing and then how to find motivated sellers.
Start by learning what makes multifamily ownership profitable by following these steps:
- Study and learn about what makes an apartment building profitable.
- Read as many books as possible on real estate investing and apartment building investing. It is much easier to learn from other people’s mistakes. There is no need to reinvent the wheel.
- Find a reputable real estate investing club in your geographic area and meet with business investor members. These “old timers” 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, they will be ready to begin the process of finding a real estate property to purchase. .
Get in touch with commercial real estate agents
A great referral 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 web search.
When looking for a commercial real estate agent, follow these steps:
- Talk to several commercial real estate agents in the area and ask about “pocket listings.” Pocket listings are apartment building owners that the experienced real estate agent may know who really want to sell their building, but have not yet listed the property.
- Find a commercial real estate agent who specializes in multi-family investments. A good commercial real estate agent who specializes in multi-family properties should have a good understanding of how recently apartment buildings have sold for.
Alternative strategies for finding apartment construction offers:
- Place an ad on Craigslist indicating what you are looking for:
- You can also place the same ad in the commercial real estate section of your local newspaper, but be prepared to pay quite a bit for the ad, and also be prepared for unsolicited calls from real estate agents. Newspaper ads work, but it’s better to use free or more direct methods, like direct mail.
- Another strategy is to contact commercial real estate owners directly. This can be done in several ways. Owners of multi-family homes can be located by researching tax records for a metropolitan area. Typically, the owner of the record will be listed along with their 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 should make it very easy for sellers to get in touch with you. Remember, you will need to look at dozens of offers and sellers before you find the one that meets your investment criteria. You can also contact the owners directly by phone. Keep in mind that multi-family homeowners are usually very busy, so you may want to script or have talking points written down so you can get right to the point and get your message across accurately.
“Looking to sell your apartment building? I am a commercial real estate investor interested in purchasing multi-family properties in Philadelphia between 5 and 100 units. I am looking for five year owner financing with 5% down or will buy with 20% down payment and a bank loan. Or here’s an ad I copied directly from Craigslist this morning:
I BUY MULTI-FAMILY PROPERTIES WITH SELLER FINANCING OR QUICK CASH. Do you need to sell? moving? Are the tax benefits running out? call me for an offer.
