How to find distressed multifamily properties. I hate to disappoint you, but you won’t find these on any list.
Good deals, deals that are really “deals”, deals where there is a healthy profit for you, are a needle in a haystack.
To really ”get” this reality, grab a list of absentee apartment owners and start calling them, asking if they want to sell. See how long you last.
The deals are there. But where? Will you keep calling until you find them?
The answer is “no”, you won’t. Unless you love confrontation and rejection, it’s just too painful.
Having a system for lead generation and lead conversion is how you find distressed multifamily properties, develop profitable deals, and extract the needle from the haystack.
The System Is The Solution
Before setting out on your quest to put a smoking hot deal under contract, bear in mind, there are forces arrayed against you whose aim is to achieve the exact opposite; that is, to get you to pay more than you should.
There is a whole industry set up to assume you are the dumb money. So you have to be smart.
Profitable deals come from motivated sellers, people who don’t want their property, and want to end their ownership of it, so they can be free of the problem the property represents and can move on with their lives.
It’s important to realize, a seller only reaches this state after every other option to get a higher, usually unjustified, price has been exhausted. There is a lot of denial and magical thinking the seller indulges in before accepting the reality they will not get what they want, and (god forbid) have to lower their price, and/or be more flexible on terms.
Hand Me That 2 by 4
As the buyer, spending time on sellers who are not dealing with reality is time completely wasted. You want only to be spending your personal time and attention on a seller after they have been slapped around by the market. Ideally, right after they have been smacked up side the head with a 2 by 4 and their ears are still ringing.
For example, after 18 months on the market the property has fallen out of closing for the third time, the REO manager responsible won’t meet his numbers for the quarter and his job is on the line. Read more…