#067: Strategies for Scoring the Best Off-Market Commercial Property Deals

Welcome to The Accelerated Investor Podcast with Josh Cantwell, if you love entrepreneurship and investing in real estate then you are in the right place. Josh is the CEO of Freeland Ventures Real Estate Private Equity and has personally invested in well over 500 properties all across the country. He’s also made hundreds of private lender loans and owns over 1,000 units of apartments. Josh is an expert at raising private money for deals and he prides himself on never having had a boss in his entire adult life. Josh and his team also mentor investors and entrepreneurs from all over the world. He doesn’t dream about doing deals, he actually does them and so do his listeners and students. Now sit back, listen, learn, and accelerate your business, your life, and your investing with The Accelerated Investor Podcast.

So hey, welcome back to Accelerated Investor, if you’re new. Thanks so much for joining us and listening. We’ve now recorded, I don’t know, I think since we rebranded to Accelerated Investor, this is probably our 50th or 60th episode and we probably have 100, 130 episodes from our old brand strategic real estate coach radio. So thanks for checking it out. If this is your first time with us, don’t forget to join our private Facebook group, so look us up at Accelerated Investor and Facebook and join it. A lot of our podcast listeners in our community, we’re all then engaging in our private Facebook group, Accelerated Investors, sharing ideas that they’re learning from the podcasts. So don’t forget. Also, I’m so excited to be with you and share with you and come into your life, come into your business. I hope you’ve enjoyed some of our recent episodes.

We’ve had people on talking about health and wellness and fitness for real estate entrepreneurs. Joey Atlas, I hope you enjoyed that episode or Aaron Field that talked about some of the mental hurdles, the mental constraints that we have as entrepreneurs and real estate investors and how to overcome those. Some of my favorite episodes that we’ve just released. So make sure you check those out. I’m also excited for some of the interviews that we’ll be releasing in the next couple of weeks. So make sure you come back in this episode. I want to talk to you real quick about tactics specifically about finding deals for multi-family and apartments, finding deals. Okay, so let’s talk a little bit more about deal flow. So it’s amazing. Over the past really three or four years, the amount of investors that have moved into multi-family and apartment deals, it’s a very hot asset class. Many, many, many investors and lenders, private investors in banks are all focused on getting and funding multifamily and value add apartments.

Just in the last 18 months we’ve added over 2200 units to our portfolio and through joint venture partnerships that we’ve done with some of our friends. And so today I want to talk a little bit about finding deals, finding multi-family, finding, you know, big apartment deals. And the question becomes as well, how do you find them? It’s very, very competitive. How do you find them? So the first point I want to make is, listen, if you’re not finding deals, you’re not looking or working hard enough or consistent enough to find deals. I had my own brother tell me years ago, my brother used to be a partner of mine in my real estate business. He said, look, if you can’t find deals you need to either expand your market or expand your marketing. I thought that was genius. We still use that today. I stole that idea from my brother.

Expand your market or expand your marketing, okay. So basically expand your geographic territory or do more marketing to the sellers and the brokers and the realtors. I think for most of us as entrepreneurs, we fall into this trap of just being consistent or inconsistent. You know, we’re kind of feel like we’re on a rollercoaster. Like at the beginning, you’re like working hard, working hard, working hard. You’re kind of chugging up that first hill of the rollercoaster. You’re sending out direct mail, you’re talking to brokers, you’re building relationships or finding out what properties are for sale. You’re on LoopNet, you’re on CoStar, you’re on the MLS, you’re networking like crazy, you’re trying to joint venture on deals and it just doesn’t feel like you’re making any progress. And then all of a sudden, because you are consistently looking for deals now you’re going back down that first hill, the rollercoaster, and now there’s deals coming in left and right.

There’s a 100 unit and then a 200 unit than a 500 unit and then a 24 unit and then a 5 unit and then an 89 unit bang, bang, bang, bang, bang. They’re all coming in. They’re coming in. You’re making offers, letters of intent, and now you stop looking for deals because you’re processing all the deals that are coming in, and then all of a sudden you’re at the bottom of the first hill and then there’s no more deals to look at. And then you’ve got to go back up this second hill and you’ve got to start again. Talking to brokers and looking for deals and sending out direct mail and calling for rent signs, calling for sale signs, calling available signs, sending out gift cards to commercial brokers, sending out thank you letters. Constantly being in touch with brokers and you’re working your way back up the second hill and all of a sudden you’re at the top of the hill and you’re going down the second hill.

And sure enough, now there’s deal flow again. All of a sudden you’ve got a letter of intent out on an 89 unit and then a 200 unit and then a 55 unit and all of a sudden they’re coming in again. So you guys get the point right? If you want to consistently look for assets consistently look for deals, you have to be consistent there, expand your market, expand your marketing, or be more consistent, right? So the question is is on your team, right? On our team, we have an acquisitions manager. We have actually multiple acquisitions managers and my team at Freeland, we have a vice president of business development. His name is Tyler. Tyler is responsible for driving in new buying opportunities and driving in new lending opportunities, right?

So he does that. He’s got several what we call business development reps or BD’s that work under him and they are all responsible for sourcing new borrower loans and finding more assets for us to buy. So we have a small army of people that are out looking, talking to brokers, calling for rent signs, calling for sale signs, calling available signs, networking with brokers, sending out gift cards and looking on LoopNet, CoStar, MLS networking like crazy looking for deals, okay. Now the bigger and bigger and bigger deals that are out there, guess what? Those are all controlled by commercial brokers and so we’ve got to make phone call after phone call, after phone call, after phone call to commercial brokers to see what they have available because those deals never hit the market. They’re always, always, always off market. So if you are not consistently looking for deals when it comes to multi-family and apartments, the question is, well how do you solve that problem?

And the way you solve the problem is by bringing on a full time acquisitions manager or business development managers, somebody that’s just going to make offers, somebody that’s going to make three to five offers per day on multi-family properties and apartments. That’s it. That’s the key metric. That’s the KPI. The key performance indicator for an acquisitions manager who’s buying assets is how many offers, how many letters of intent are you sending out per day and per week? That’s the only metric that matters, okay. So the question then becomes is, well, how do you find deals? And a bunch of these deals and different things I’ve already mentioned, calling for sale signs, calling for rent signs, calling available signs, calling on off market properties, researching inside of software platforms like inside of Accelerated Investor office, my software, you can actually log in and you can do a search what’s called an advanced search and actually export every single property in your zip code that meets your criteria.

Let’s say again, five units or better, that’s apartments. That’s really the only criteria you need. Like, let’s say over $250,000 five units or more apartments, or it could be, again, maybe you go with mobile homes, maybe it’s self storage, whatever that is, is then getting all the owner information? A lot of that is right inside the software of Accelerated Investor, right? If you can also go to the filed mortgages, you can also look up the file mortgages in public record. You can find the filed mortgages, skip trace the owner, then call the owner directly, okay? That’s another way to do it. Personal letters, right, personal letters with some, you know, personal information about you. Not just, hey, I want to buy your apartment, but hey, this is a personal ladder. I’m looking to build my retirement account and I’m looking to build my personal net worth for my friends, my family, my wife, my kids.

Your personal letter about the deal, right? And get that out to brokers and sellers who may be selling. You know, we find in our market, the average owner has owned a building for 25 to 28 years, so very rarely are these buildings actually selling, right? They’re only selling every 25 to 30 years one time. So I’ve just got to be in front of them when the time is right, when they’re ready to sell, okay? So on, you can also go to CoStar or you can go to LoopNet. You can actually ask for a report of all the commercial lenders, of all the lenders who have closed a deal in the last, let’s say, two years or three years, go to CoStar, buy that report, get all the commercial lenders who’ve closed a deal in the last three years. Then call those lenders. Call the Marcus and Millichaps of the world, right?

The Blue Mark Capitols of the world, which are some different commercial lenders in my market. Call them and find out, hey, who? Oftentimes a motivated seller will go to a listing agents and listing brokers, and then they’ll go to commercial lenders and they’ll say, hey, I think I’m the list. I’m thinking about listing this $10 million apartment deal. Who do you know who’s a legitimate buyer, okay. If I list this for you, with you in a pocket listing, who do you know who’s a legitimate buyer for this $20 million deal or this $5 million deal?

Who else do you know who is somebody that is a legitimate buyer? They can get a loan, they can raise the private capital and take this building down, okay? That is a very legitimate way to get in because look, once you close some commercial deals and then you’re in that office, guess what? And you’ve closed some deals, especially difficult to close deals, then they’re just going to bring you more deals. They’re going to know the sellers that are looking to sell. They’re going to bring them to you, right? So those are some of the specific ways that we’ve found deals, right? Calling for rent signs, calling for sale signs, calling available signs, exporting the list of lenders who’ve closed deals in the past three years through CoStar. Obviously the MLS LoopNet, but a lot of that stuff is picked over, buying lists of commercial brokers, sending them a personal letter with a gift card, okay.

And sending them out gifts maybe once a quarter, especially around the holidays and making sure that they know that you are a legitimate buyer, that you’re looking to buy more properties that you can legitimately close and tell them that you’re pre-qualified. Because what needs to happen is, is that, you know, these two separate trains going down two separate tracks need to meet at the proper port of call if you will. And you meet at the proper place. Meaning you’re looking to buy, you have capital, you can get the loan, you can, you know, personally signed for it personally, guarantee it.

Versus a seller who’s looking to sell. And again, these sellers are not selling, you know, every just once every 25 to 28 years need to make sure that you guys arrive at the same time. And often that arrival is through a commercial lender or through a commercial broker, they control that deal flow through off market pocket listings, okay. So those are just some of the methods that we’ve used to find commercial deals that we’ve bought that we’ve lent on that my buddies I’ve joint ventured with that they’ve found. Those are all the different ways that they are looking for and finding commercial deals, multi-family and apartments.

You’ve been listening to Josh Cantwell and the Accelerated Investor Podcast. Leave a comment on our iTunes channel and let us know what you want to learn next, or who you’d like Josh to interview. While you’re there, give us some five star rating and make sure to subscribe so you can be the first to hear new episodes. Follow Josh Cantwell and his companies, the Strategic Real Estate Coach and Freeland Ventures on all social media platforms now and stay up to date on new training and investment opportunities to start your journey toward the lifestyle you’ve always dreamed of. Apply for coaching at JoshCantwellCoaching.com.

Every real estate investor understands the importance of having a steady deal flow. After all, if you don’t have any prospective properties on the horizon, you won’t have any additional cashflow or equity to continue building and sustaining your business. 

The same is true whether you’re a single-family or multi-family property investor. In this podcast, Josh shares his deal flow tips specifically for commercial (multi-family) investors. 

While some of the strategies for finding commercial properties are similar to the ones that single-family investors might use, finding the best deals on apartment complexes and multi-family properties involves several unique tactics that may not apply to single-family properties.

Josh explains some of his tried-and-true methods for finding apartments and other multi-family properties, including those that aren’t even on the market yet, so you can build your “arsenal” of marketing techniques. He also shares his thoughts on hiring an acquisitions or business development manager to spearhead some of these initiatives for your investing business. 

Whether you currently invest in commercial properties, or you’d like to get into the multi-family investing game sometime in the future, this information is crucial for helping you build a strong pipeline of potential properties deals. Remember: if you’re not finding deals, you need to expand your market or your marketing (or, in some cases, both!)

What’s Inside:

  • How to build a steady pipeline of commercial property deals
  • Why hiring an acquisitions/business development manager can be a hugely beneficial investment
  • A few unique methods that Josh uses to find off-market commercial properties for sale
  • How to establish your reputation as a legitimate buyer 

Mentioned in this episode​