I am looking for a multi-family unit apartment to invest in in my area. In your experience what is the best way to source these properties? Burned out landlords, investment firms, brokers?
One idea I had is sending letters directly to owners of some of these properties. It would be very time consuming though writing a letter to each owner. Has anybody had luck using direct mail to make contacts?
What you want is motivated sellers so that you can get a deal. Most apartments are financed with a 20 year amortization on a 5 year balloon. If you find a property that is close to the 5 year and has an occupancy rate below 80% (mismanaged) then that property won’t appraise for enough to refinance and the owner must sell. You can find a deal there.
Yes the direct letter thing is easy. Its a low turn around but I have gotten many responses. Send out a blanket letter so when you find a property all you have to do is press print. LoopNet is a good site. I send out a letter per day and get about 2 calls per month from sellers.
Great thatnks for the advice!
What kind of letter do you write to the owner? Is it a personalized letter describing yourself and what you are looking for or do you keep it more to the point?
Keith,
You pretty much make me laugh my tail off every day you’re on here. Thanks! :beer
rjb228,
There is that little thing in the rules about how you can put a website in your signature line. Many people on here have their own websites they promote via their signature line. Just a thought.
I try to add a little positive flavor here…some don’t understand my humor.
Keith
Wow, this method is already getting responses. I sent out 5 letters to apartment owners on the same block I own my 4 plex on and got one response from an interested seller of a 8 plex. I guess you never know what you will find! Going to start ramping up the campaign this week…
It’s a great news that it worked for you. Good luck dude
I think searching online as well as knocking the brokers would be a great idea! When you will have multiple options, definitely it would be easier for you to make the selection.
Hi,
Its a low turn around but I have gotten many responses. Send out a blanket letter, so when you find a property all you have to do is press print. LoopNet is a good site.
You can buy with NONE of your own cash. You can raise private money to cover any cash requirements. You will find that it’s easier to get financing on apartments and that the MORE you borrow the LESS they look at the borrower’s credit. In some instances, they don’t even look at the borrower’s credit but at the borrower’s assets instead.