How to find cash buyers for apartment buildings. It’s the second most important part of the process, right in there behind finding a smoking hot deal. It is where the money comes from to close the deal, so it’s definitely important.
Too often though, ‘important’ gets equated to hard, or difficult.
If you have done your work properly in finding and negotiating a deal worth doing, and not cut any corners, finding a serious buyer with cash who wants to close asap, is almost a formality. There is work involved, of course, but the right tools and process flush out an end-buyer pretty easily.
How To Build A Buyers List
For the sake of example, you have a deal coming together. The seller is motivated, occupancy is 50%, rents haven’t been raised in 5 years, there is deferred maintenance, you have sent your LOI to the owner and after a bit of back and forth he signs and faxes you a copy of the signed agreement.
The property is in Lawrence Township, Indianapolis.
Time to get going with finding a buyer. Faxed LOI in hand and hard copies in the mail, this is the perfect opportunity to reach out and make contact with potential buyers.
So think, if you have a deal in a certain part of town, who are the people most likely to want to buy it?
Well, other apartment owners successfully operating apartment buildings in the same area.
Wouldn’t you agree?
Key word: “successfully”.
They already know the area, have done the research, and are comfortable owning property there. Owning another property nearby their existing property increases the return on their original research, helps create synergy with marketing for tenants, and builds their brand.
Plus buying out your competitors is always a good business move.
So a good sized list of high probability buyers are right there in your immediate vicinity. All you need to do is contact them, and ask them if they’re interested. Read more…
A little appreciated but highly effective way to find multifamily deals to wholesale is, wait for it … door knocking. That is, walking into the leasing office of an apartment building and asking to speak with the owner.
I know, just reading these words, you’re already dismissing the idea. Cold hard reality? For working your local market this is one of the most productive things you can do. For a number of reasons.
1) When you walk into the leasing office and ask to speak to the owner, and then start speaking with the owner, you uncover situations that do not show up anywhere else. The owner knows the property like no other, and he/she alone knows when there is trouble brewing, and if selling now may be a good idea. There may be partner trouble, the death of a principal, foreclosure looming. Previous to any legal notice, the only signs of any of it would be the stress lines on the owners face. When you knock on a troubled apartment owner’s door; a) he/she sees you as a godsend, b) this is your motivated seller and no-one else’s. Read more…