One of the most important aspects of investing is having a source to get off market deals in Real Estate. Once you identify the right markets to invest in, the second step is to decide what type of deals you want to invest in, and then figuring out how to get deal flow that matches your criteria.
When it comes to choosing the types of properties to invest in, there are 3 main different classes:
– Newer apartments, usually just a few years old or brand new. Overall returns tend to be lower as there is less to renovate and less value-add potential, but they tend to be more stable.
– B class properties tend to have outdated cosmetic features, which creates room for improvements. These tend to be 1980+ year built deals.
– Similar to B class, but older. There is usually a bigger opportunity for rehab and improvements to make them look like the newer apartment deals to drive more revenue.
– You will rarely see a property being advertised as a D Class deal. These are the deals that need extensive rehab and have extensive damage most of the time.
We generally like to buy C & B class properties as they tend to have the most upside potential. We also like to stay at 50 units and above, as it makes it easier to find high quality management companies to take them on. When you are below 50 units, it makes it difficult to find vendors that are willing to provide you top level service.
Once you have your criteria set in place, I’ve found the best way to find a constant stream of deals (including off market deals) is to build deep relationships with the top brokers in town. We spend a lot of time and effort building relationships with brokers as they control the market and know exactly who is selling and when.
We often get off market deal flow as a result of that, which gives us an advantage in the market against other buyers. If the deal happens to be marketed, we also get an advantage because brokers prefer to work with buyers they have relationships with, which is why we spend so much time and effort building those relationships in the markets we invest in.
There are other ways to find properties, such as mailers, cold calls, and other methods, but they tend to get less effective as you go to bigger properties.
We go through all the work of building those relationships with brokers to source the best of the best deals for our investors as we buy Multifamily Real Estate. If you want to have access to our investment opportunity deal flow, click the link below to schedule a 15 minute introductory call and we will add you to our deal access database for future opportunities.
Click the link: https://modelequity.com/invest-now