When I first started out trying to find multi family real estate, I heard the same thing over and over and over. Everyone always said “You need to develop strong relationships with brokers in your local market” or “Every good deal goes through a real estate broker, spend your time building those relationships”.
And while this may be true for certain markets, it has not necessarily been the case for our local market. In fact, of the 105 units we have under ownership, ZERO – ZIP – NADA, of those came from a real estate professional. And ZERO of those properties were purchased on market. Every single buy and hold multi-family deal we have done (to date) has been an off market deal without broker representation. So how did we do that?
Direct Mail Marketing
Most real estate investors think of direct mail marketing as a way of finding distressed home owners. This is true, however, it can be incredibly effective in tracking down owners of multi-family properties.
Ditch the whole post card and mass mailing idea. Adding a more personal touch will dramatically increase your chances of keeping your mail out of the trash.
Source your own list of properties that fit your buying criteria in your market. This ensures accuracy, but also prevents you from mailing any lists that are already being utilized that you can purchase online.
Construct either a professionally typed letter with a nice letterhead including our company logo and contact information. Address your letters to include names of property owners rather than “Dear owner”. Provide all of your contact information and make sure to mention how much you appreciate their time. Most apartment and multifamily property owners are full time landlords and very busy people.
Cold Calling Finds Deals
Yes, even in the days where robocalls make up the majority of phone calls that people receive, cold calling still does work. Using your list of properties that fit your buying criteria, use whitepages.com or a similar service to look up all the phone numbers on your list.
When contacting property owners by phone, make sure you keep it short and simple when they answer. Most people will not listen to a long introduction or script right out of the gate. The idea here is to not have your phone call sound like a sales call. Something like this works great for us.
“Hello Mr. Jones, my name is Sally Smith. I am calling about your property at 123 Main street.” Pause.
Let them talk and acknowledge that they are who are looking for and that they do indeed own the property. Typically this exact introduction will peak enough interest from the party on the other end of the phone as they are wondering what the heck is wrong with their property and why you are calling about it.
Keep in touch with all of your contacts and follow up regularly. Make sure you keep a detailed log of when you contacted them, what number was the correct number, and details of what was discussed. This is incredibly helpful to reference during future conversations.
Best piece of advice here: Do not get discouraged. Cold calling is hard, psychologically. You will hear no so many times you could cry. You will probably even get hung up on a handful of times. But that is why this is super effective. Not many people can stick with it long enough to give it a legit shot. Fight through the rejection and find that deal.
Networking For Off Market Deals
This can not be stressed enough. If you have not joined or attended a local real estate meetup, do so as soon as you can. Because of the pandemic, most meetups are probably no longer meeting in person, however, most are probably still holding monthly zoom calls or socially distanced in person gatherings.
Meetups are not only fun, they are also very informative as most offer guest speakers who are succeeding in the profession. Have a few drinks, introduce yourself to as many people as possible, trade business cards if you have some, and get word out on what your buying criteria is. The more people that know you are looking to buy real estate, the better.
This is also a good opportunity to start and grow those relationships with real estate brokers. Many agents will attend these meetups to meet prospective clients and learn about the investing space. Find who is doing deals and do not let them out of your sight.