It’s tough to find multifamily deals these days and when you do, the competition is FIERCE. Even if you do make a best and final, someone is always outbidding you or putting up part earner’s money. How do you compete with that?
It might seem impossible and you might be ready to give up, but don’t lose heart. Don’t let this frustration stop you from being successful, because people are having success buying apartments and you can, too.
The key is to access off-market deals. The kind that are never listed publicly and only certain people see. So, how do you get these coveted off-market deals? Well, there’s an insider’s secret to winning multifamily deals, and it starts with tracking lost ones.
Intrigued? Read on or check out this video where I show you exactly how it’s done.
Sticking with a Deal
It’s important to realize that just because you “lost” a deal, or a property went under contract and now it’s gone, doesn’t mean that you’ve lost it forever. I have seen many deals come back to life. In fact, I predict almost 50% of the time the deal I “lost” does not actually close… and that means I get another shot at bat!
If you stick with a deal and keep following-up with the broker, the deal often comes back to you. You may even see more favorable terms this time around, because now the seller is motivated after seeing the previous commitment fall through.
Even if that deal doesn’t come back to life, sticking with it will set you apart from the competition. Think about it – you’re building your relationship with the broker, and your follow-up activity shows them that you are a serious player that knows how the industry works.
Whether it’s this off-market deal or the next, here are a few practical tips for sticking with it:
Tip #1: Keep Records and Notes of Your Deals
I can’t express how important it is to record your deal activity and stay organized during the lifecycle of the deal. Personally, I record all of my activity with the seller to include:
– My notes
– Site visits
– Phone conversations
– Any analysis that I do for them
I will even make videos of my analysis so that I can refresh myself on the deal as needed. (To do this I use Jing, a free desktop recording tool). When it comes time to crack open the deal again, I will watch the video to quickly get up to speed.
To keep myself organized, I put everything in Dropbox and I create a folder for each deal that we do. The idea is that I will check back with the broker on these deals 60, 90, even 120 days later. It’s truly amazing how often these deals come back, so KEEP GOOD NOTES!
Tip #2: Schedule Regular Follow-Ups With the Seller or Broker
Keep yourself accountable to your follow-up. Add a reminder on your calendar for the next time you should follow-up with the seller (or broker, depending on who you are dealing with) about the deal. Depending on the situation, I would recommend following-up every 2-4 weeks.
You might try alternate sending an email with a phone call. Look for a blog post or article that you can share that provides value to that person. Your goal is to stay informed, but also to be top-of-mind so that if something changes (like the closing falling through), you’ll be one of the first people they call.
You might pick up the phone and have a conversation that goes something like this:
You: “Hey, Mr. Broker. I was following-up to see whatever happened to so-and-so deal?”
Broker: “Oh, it closed.”
You: “Fantastic! What was the closing price?” (This is great information for your records, and for your market knowledge in general.)
Or, that same conversation might go in a different direction:
You: “Hey, Mr. Broker. Whatever happened to so-and-so deal?”
Broker: “Well, as a matter-of-fact they are having trouble with that closing right now. I don’t think it’s going to go through.”
BOOM! You are now on the inside track. You are THE inside guy and if that deal doesn’t close, they are likely to call YOU because of your persistence. And that is an off-market deal that will never see the light of day.
This is surprisingly common. I was talking with a fellow apartment investor, Chris Urso. Chris is a successful multifamily investor with thousands of units at this point. He had one of his best deals come back after being under contract twice before he got it.
The point is: stick with a deal until it closes, because it ain’t over ‘til it’s over! And that is an insider tip, my friends.
- Don’t ditch a deal just because it’s under contract.
- Keep careful records for each deal and don’t delete them!
- Stay in touch with the seller or broker until the deal actually closes.
- Provide value in your interactions to build relationships with these key players.
If you make this part of your investing discipline, you are sure to reap HUGE rewards!