Some Unique Ways to Source Off-Market Apartment Deals
An on-market sale is the most popular form of apartment transaction. An apartment owner lists their property with a broker, the broker markets the deal to the general public, and the deal is awarded to the highest bidder after a bidding war. Off-market transactions, in which the apartment is bought directly from the owner without the use of a middleman, are rare.
Whether purchasing the first apartment or looking to expand an established portfolio, apartment buyers would profit from finding these off-market offers. You are not, however, alone in your quest for off-market opportunities. The market is already flooded with investors who send out the standard “We Buy Apartments” direct mailers to apartment owners on a daily basis. You’ll need to think outside the box to get an answer from inspired apartment owners if you want to compete in the off-market lead generation niche.
Here are some unique ways to source off-market apartment deals and gain a competitive advantage:
Identify a Target Area
Determining a target market is significant for additional reasons thanjust area. If your target market is undefined or is the entirety of the United States or a certain state, the number of chances will be enormous to the point that your arrangement pipeline will be unmanageable. Also, it will be incredibly hard to acquire the degree of comprehension needed to settle on instructed venture choices. On the other hand, if it is excessively small, you’ll have issues discovering enough arrangements that meet your speculation standards.
Identify a Property Class
Determine which property class is the best fit for your investment strategy so that you can identify which one is the best fit for your return objectives.
Tenants, landlords, owners, and brokers may use a loosely defined Class A, Class B, and Class C rating system to classify and compare properties that compete for similar tenants. Properties are categorized based on factors such as their age, technical capacities, the efficiency of their HVAC systems, their location, their utilities, how well they are maintained, and their amenities.
Define Additional Investment Criteria
Investment criteria help individuals meet their short- and long-term goals. A variety of factors influence it, including:
- Financial situations
- Available capital
- Personal situations (family, living situation)
- Expected returns
These considerations aid an investor in determining the types of investments they want to make, such as stocks, bonds, money market funds, real estate, asset allocation, and risk tolerance.
Obtain A List Of Properties
Build a list of properties using the three pieces of information above (market, property type/class, and investment criteria) using online tools such as the county auditor’s website.
Apartment buildings purchased five years or more ago are an additional filtering choice. Owners who bought a home in this time period have possibly built up enough equity to embrace a lower-than-market offer price and still make a profit.
Find the Owner’s Contact Information
When you pull the list for properties identified under an individual’s name, you should be able to find the owner’s contact details. If it’s classified under an LLC or a property manager’s name, use skip tracing software to find the owner’s phone number and/or mailing address, or look it up on the Secretary of State’s website.
Conduct Mailing Campaigns
Direct mailing campaigns are one of the most well-known methods for obtaining off-market offers.
An effective direct mailing campaign relies on two factors. Your mailing list is one of them. Only owners whose apartment communities meet your investment requirements and who show at least one indication of interest in selling will be included on a high-quality mailing list.
The second factor to consider is the volume of your mailings. Decide on a mailing schedule for your list of owners — weekly, quarterly, every six months, etc. — and stick to it. Often you’ll get a response on the first mailer, and other times you won’t get a response until you’ve been mailing to the same owner for a year.
As opposed to direct mail, cold calling gives you more leverage over the number of conversations you have with business owners.
Cold calling will also help you convert more leads. If an owner isn’t interested in selling, they won’t respond to direct mail. When cold calling, you should give the owner a letter referencing the conversation, including your contact details, and informing them that you will call them again in X (2, 4, 6, whatever you decide) months to see if they are interested in selling.
Call “For Rent” Ads
Calling apartment owners listed on online rental sites or on “for rent” signs spread across your local market to gauge their interest in selling is a perfect way to find off-market offers.
If an owner has a unit available for rent, you’ve already found an issue. They are losing money because the unit is vacant. You may be able to catch them at a time when they are eager to sell.
You can select any two methods from above and focus on generating leads from those for at least six months. Keep track of the outcomes for each of the marketing strategies during your six-month trial period. If either or both of the marketing strategies aren’t working, tweak them or try something else. All of these strategies have worked in the past, but they might not work for you due to your market or your specific skill set. It can take some trial and error to find a strategy that aligns with what you’re uniquely good at. It’s not about getting five lead sources in the end. It’s all about figuring out which ones work best for you.