How To Find The BEST Multi-Family Real Estate Deals (FULL Masterclass)

Brief Summary

This master class focuses on finding deals in multifamily real estate, emphasizing cash flow, tax benefits, and forced appreciation. It covers selecting markets, building relationships, and various strategies for locating properties, including online resources, direct mail, and networking. The importance of mindset, continuous learning, and taking action is highlighted, along with a discussion on entrepreneurship and overcoming limiting beliefs.

Multifamily real estate offers cash flow, tax benefits, and forced appreciation.
Selecting the right market involves considering your backyard, places you know well, locations with boots on the ground, and areas you enjoy.
Building relationships with brokers, investors, and bankers is crucial for success.
Direct mail, online resources, and networking are effective strategies for finding deals.
Mindset, continuous learning, and taking action are essential for achieving goals.

Introduction to Finding Deals

The master class will focus on finding deals in multifamily real estate. The current market presents incredible opportunities due to various economic factors. The next three hours will be dedicated to sharing ninja tricks for finding deals, but first, a framework will be provided.

Why Multifamily?

Multifamily real estate is attractive due to several key benefits. It generates cash flow, offers incredible tax benefits, and allows for forced appreciation through value-add strategies. For example, numbering parking spaces and charging tenants for reserved spots can significantly increase the property's value. Additional benefits include principal reduction and acquisition fees, which can be substantial. Asset management fees also provide a steady income stream.

Selecting Initial Markets to Evaluate

When selecting markets to evaluate, consider four primary options. First, focus on your backyard, defined as any area within a two-hour drive. Second, consider places you know well, such as where you grew up or went to school. Third, look for places where you have boots on the ground, such as friends or family. Finally, consider places you enjoy visiting and might want to retire in. Avoid investing in blue states due to high regulations and taxes. Look for markets with growing populations, income, and job growth. Employment industry diversity is also crucial. Ensure there is a significant disparity between income and rent in the submarket.

Key Market Indicators and Infrastructure

When evaluating a market, consider the median home price and ensure a significant difference between it and the price per unit. Vacant housing should be less than 20%. Look for cities with at least 100,000 people, an airport with a major carrier, a highway, and a nice shopping area. Websites like census.gov, city-data.com, bestplaces.net, and data USA .io are useful for checking demographics.

The Importance of a Problem Solver Mindset and Relationships

The most successful individuals adopt a problem-solver mindset. This business is more about who you know than what you know, emphasizing the importance of relationships. Even introverts can succeed by having five seconds of courage to connect with others. Building relationships is critical and impossible to do alone, as multifamily investing is a team sport. There are various roles one can play, such as finding deals, underwriting, or asset management.

Building Relationships with Key People

Building relationships with sellers, investors, and bankers is essential. Given the current economic climate, relationships with local and regional bankers are particularly important. Commercial real estate faces challenges with debt coming due, leading to potential foreclosures and bank failures. Connecting with bankers can provide opportunities to acquire properties they take back. Brokers can also be valuable, especially as the market slows down. Additionally, building relationships with service providers like insurance agents and property management companies is beneficial.

Utilizing Brokers for Finding Deals

One broker can significantly contribute to your wealth by sending you deals. Focus on multifamily brokers and leverage referrals to find property management companies and lenders. When finding brokers, look for those with several properties of the size and asset class you're interested in. LoopNet is a great place to find brokers. Asset classes range from A (brand new) to D (the hood); it's recommended to stay out of D.

Effective Communication and Follow-Up with Brokers

Most people fail to follow up with brokers, so be sure to respond to their listings and provide specific reasons why a deal didn't work. Refresh their memory on what you're looking for and respect their time. Stay in front of them by emailing or calling every six to eight weeks to build a lifelong relationship. This business is about becoming super wealthy over time, not getting rich quick.

Strategies to Stand Out and Align with Successful Investors

Find ways to set yourself apart from others. Align with someone successful who has a few hundred or a thousand doors, offering to bring them deals or raise money for them. This is a common strategy for getting started and provides instant credibility when talking to brokers.

The Importance of Action and Mentorship Over Traditional Education

The traditional education system often lacks practical business experience. The new way of thinking involves investing in yourself through mentors, workshops, and boot camps. Institutional education is not designed to prepare you for entrepreneurship.

Acting "As If" to Achieve Success

"Acting as if" means faking it until you make it. Visualize your goals as if you already have them and set up meetup groups, YouTube channels, or podcasts to add value to others. Act as if you're already happy and successful. Declare yourself an incredible multifamily investor and focus on what you want as if you already have it.

Boot Camp Promotion

The boot camp is scheduled for September 15th through the 17th in Orlando. Attendees can join for $197 using the code "finding deals." The event includes training on finding deals, raising money, evaluation, underwriting, due diligence, financing, syndication, and property management. Bonuses include deal evaluator software and a document library.

Online Resources for Finding Deals

LoopNet is a valuable resource for finding deals, but it requires digging deeper to uncover hidden opportunities. Other online websites include cityfeet.com, nii global.com, cimls, Marcus and Millichap, CBRE, Cushman, and CBC worldwide. Look for low rents, abnormally high or low expense ratios, and properties with little information.

The Value of Property Management Company Relationships

Property management companies are an incredible source for deals. They know the property better than anyone, including problem tenants, maintenance issues, and when an owner wants to sell. Building relationships with these companies can lead to thousands of units.

Auctions: Opportunities and Caveats

Auctions can present opportunities, especially in a changing economy. Properties are often listed significantly less than their actual value to entice bidding. However, properties are sold as-is, and there are no contingencies. Due diligence is cursory at best, so it's critical to have someone knowledgeable looking over your shoulder.

Auction Houses and Types of Auctions

Register with major auction houses and get on their lists to learn about deals. There are two types of auctions: reserve auctions, where the seller has a minimum price, and absolute auctions, where the highest bidder wins regardless of the price.

Direct Mail Strategies for Finding Deals

Direct mail is an effective way to reach Mom and Pop owners, particularly for properties under 50 units. Target owners who have owned the property for at least 20 years, as their tax benefits have likely run out. Discuss seller financing options to save them on taxes.

Motivated Sellers and Building Your Own List

Find motivated sellers who may be dealing with management problems, divorce, retirement, or poor health. Build your own list by going to the county assessor's website (NE online.com) rather than buying a list.

Crafting Effective Direct Mail Campaigns

To get around the entity, find the names of the managing members or owners and mail them at their homes. Type the letter, include the property address in the first paragraph, and make it one page. Include a picture of you and your spouse or family to increase response rates. Use headlines like "I can save you thousands in taxes." Handwrite the envelopes and use stamps.

Additional Direct Mail Tips and Q&A

Consider using a self-addressed stamped postcard for retirees. The interest rate has to justify the prices. NE online is the website to find public assessor websites.

Cap Rates, Returns, and Wholesaling

Focus on the returns a property will generate rather than just the cap rate. Cash on cash return and internal rate of return are key metrics. Wholesaling multifamily properties can be very effective.

Warrior Program Promotion and Job Security

The Warrior program offers an opportunity to accelerate your learning and connect with a community of successful investors. The only job security you have is between your ears, emphasizing the importance of knowledge and action.

The Importance of Mindset and Overcoming Limiting Beliefs

The only thing standing between you and what you want is the story you tell yourself. The people who win are the ones who change their story and take massive freaking action.

Embracing Entrepreneurship

Entrepreneurship requires you to take off the employee hat and get uncomfortable. It's about living a few years of your life like most people won't so you can enjoy the rest of your life like most people can't.

Boot Camp and Warrior Program Promotion

The boot camp is scheduled for September 15th through the 17th. Attendees can join for $197 using the code "finding deals." The Warrior program offers an opportunity to accelerate your learning and connect with a community of successful investors.

Q&A Session

If there are no deals on LoopNet locally, expand your search within a two-hour radius. The person that brings the deal and organizes it and runs it all the way through closing very often that's 5 to 10% of the general partnership. If you can bring deals to a team, you should come to the boot camp so you can meet a bunch of teams. Banks cannot have properties on their books and they will very often Finance them if they take what's called an REO property back.