A major challenge for investors in the multifamily space is access to consistent deal flow. While the internet makes it easy for us to search for available properties, smart investors know that properties posted online are there because no one else wanted them.
Most of these properties have been marketed directly to interested buyers that ultimately passed on the deal. Let’s face it, online listings are where deals go to die.
The #1 source for finding multifamily properties is through commercial real estate (CRE) brokers.
The reason brokers are the best source of deals is because they make it their business to know every multifamily property owner in town. Why reinvent the wheel when you can leverage their knowledge and relationships to get ahead of a deal before it’s made public?
Related: How to Find Off-Market Deals
Now, this does not mean that you have to spend your time and money marketing to every broker in your city. The truth is, you only need 1 or 2 solid brokers that you can build a relationship to feed your deal pipeline. (I once worked with a broker in Texas that was such a rainmaker that I had trouble just keeping up with him alone!)
But, how do you find great CRE brokers and build relationships with them?
Watch the video below (or keep reading).
Finding Top Commercial Brokers
I have found LoopNet to be one of the best sources for locating CRE brokers. LoopNet is an online marketplace for commercial property with more than 8 million registered members and 5 million unique monthly visitors.
I know what you’re thinking – “didn’t you just say that the internet is where deals go to die?” Yes, the property listings on LoopNet may be stale. But what you care about as an investor is using the site to locate the originating deal source – the broker!
Below are the steps I recommend you take to generate a list of potential brokers:
- Go to www.LoopNet.com and create a free account.
- Search for the building types you want to buy including size range, zip code, etc.
- Create a spreadsheet and capture the contact information for each of the CRE brokers with listings similar to what you are looking to purchase.
- Keep track of the number of listings the broker has, the building types, and the part of town where their listings appear.
This exercise will not only help you establish a contact list, but help you sound intelligent about the broker’s business before you call them. That’s right – you’ll have to pick up the phone and have a conversation with the broker so they know you’re a serious buyer. A good broker will have his cell phone listed and is eager to answer it.
Before placing that first call, there are two important things you must do.
First, make sure you’ve brushed up on your industry jargon, so you’re using the right language. Check out my post, How to NOT Sound Like a Multifamily Newbie for tips.
Second, make sure you’ve got your team in place. Hear my strategy for building a commercial real estate team on my video: How to Build Your Commercial Real Estate Team and Get Your First Deal
Only after you’ve taken both of these steps are you truly ready to call the brokers on your list with confidence. Once you’ve connected with them, the real work starts. You must continue to build relationships with these brokers to earn their trust, and before you know it, they’re sending you off-market deals!