Two questions that we often field at Nighthawk Equity are:
- How do you find multifamily deals?
- How do you generate consistent deal flow for your passive investors?
Our mission at Nighthawk Equity is to help people become financially free by passively investing with multifamily syndications. To do this, we must couple long-term investor relationships with consistent deal flow that delivers.
In other words, when you start investing with us you might start at the minimum investment amount just to check us out. If you’re happy with the way things are going, you’ll likely want to invest more. If we don’t have more deals to offer, well, that’s not great!
We aim to generate consistent deal flow so that you can invest with us over and over, and over again. We want you to look at a lot of deals that are coming from us, and choose the ones that you are most interested in and excited about.
There are 3 ways that we ensure consistent deal flow, and it's a little bit different than some other operators. Because of our platform and our reach, we have different and distinct advantages that help us with deal flow. Today we are going to explore these 3 key factors that keep our pipeline full.
A Focus on Acquisitions & Off-Market Deals
In order to have consistent deal flow, you must have a focus on acquisitions. In our case, we have a full time Director of Acquisitions in Garrett Lynch. All he does is look for deals. At the heart of deal flow is our ability to build deeper relationships with the right brokers to get these coveted off-market deals. THIS is where the magic happens!
Related: How to Find Off-Market Deals
Off-market deals are essentially deals that are not listed publicly. What typically happens is the owner of an apartment building will call their favorite listing broker. And they'll say, “Hey, buddy, I'm thinking of selling. How much do you think I can get for this property?”
The listing broker offers to do a valuation of the property. And the owner goes, “Yeah, that'd be nice. Why don't you bring me a few buyers? You know, I don't want a bunch of people parading through my property and scaring my tenants. So, I just want to keep this quiet.”
The broker’s now thinking to himself/herself – who can I bring in on this deal? Whose profile will this meet, and who do I know that will perform? We position ourselves to be THE acquirer that the broker thinks of first when this opportunity appears. We do this by building relationships, being clear about what we are looking to acquire, and maintaining an excellent track record.
These off-market deals never see the light of day, which is to our advantage. (Now, we do compete publicly listed deals and we get into these what's called “best and final” rounds – and we've won. We've beat out other players in this way because of our track record, especially if we're in a particular market.) But the off-market deal is not a competitive process.
Now, you can really only do this when you have a deep relationship with the broker. Our credibility, our track record, and our FOCUS has helped us to build some really deep relationships with brokers who call us before they call anyone else. The broker knows that we can raise the money to close the deal, and not retrade. Which is why they call us first.
These relationships are a key differentiator for us.
An Educational Platform That Breeds Syndicators
The other thing that's different about Nighthawk is that our educational platform through the Michael Blank brands. Here we teach people how to become active investors, how to find deals, how to raise money, and how to become syndicators.
For example, if I am a passive investor I might want to learn more about where these deals are coming from and how they are evaluated. Or, I might even want to go to the next level and become an active investor that is pursuing deals and conducting the capital raise.
For both scenarios, we have an educational program called The Dealmakers Mastermind. It's a very affordable program. It's an online forum where people can submit their deal analysis and get feedback from our team of experts. This includes access to a tool we call the Syndicated Deal Analyzer. This tool makes it very easy to evaluate commercial real estate, or multifamily properties specifically.
At this point, there’s a process for submitting the deal to our deal desk, and essentially, there’s a coaching opportunity that occurs (at a cost). The coaching is designed to help that person get the deal under contract, with terms that we feel we need. Once we accept that deal, they become a joint venture partner of ours. We essentially take the deal over, conduct due diligence, raise the money, and close on that deal.
This helps us fulfill our mission of helping investors (both active and passive) become financially free! In the example above, this active investor now has a deal under their belt. They can honestly say that they say have a General Partnership (GP) that they work with, establishing their track record and allowing them to take on more active deals.
We help this person do their first deal and now this gives the past investors the ability to invest in new one. By educating those that are interested in starting their own entrepreneurial ventures, we are raising the next generation of syndicators that we (our GP and our passive investors) can invest. And in doing so, we are teaching them the very methods and values that we know work.
It’s a win-win-win scenario, all around!
A Partnership Channel
We also have a partnering process called the “deal desk” where active investors, or syndicators, bring us their deals. We’ve done over 1,200 units and 9 deals through this channel. In fact, we just closed on a 218 unit in Crestwood Little Rock, which came through this program.
Through the combination of these things we are able to look at a lot of deals. We can cherry pick a little bit. Okay – A LOT bit. We can really pick out the best deals for our investors on a very consistent basis.
Through the reputation that we have built, and the hard work of team members like Garret, we really see some amazing deals. In some cases, we have become leaders in secondary markets, where brokers are clamoring to bring us off-market deals.
The Bottom Line
Producing on-going deal flow in the multifamily space is both an art and a science. It takes a combination of focus, relationships, and a systematic approach to the deal process to ensure consistent results.
We recognize the importance of education in this process, which is why we have provided tools, resources, and mentoring opportunities to our client base. The more you educate yourself, the better you’re going to be as an investor.
If you’re interested in learning more about passive investing through multifamily investments, check out this great report that we’ve created comparing the volatility of stock market returns to the multifamily investment market. This report is completely FREE.
If you know that you’re interested in investing in a multifamily syndication and you’re interested to hear about deals that we’ve got brewing, go to www.NightHawkEquity.com and click the “Join” button. We’ll set up a call, develop our relationship, and include you on those future deals that we cherry-pick for our investors.
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