BY LANCE EDWARDS— Utilizing the services of a broker can be advantageous for you when you are searching for multifamily properties.
The key to working with a broker is to build a relationship and “train” that broker into knowing exactly what you look for in a multifamily property. Here are some tips to guide you in what you say to a broker to find the right properties for you.
When you contact a broker, you need to be very precise in the details that you give him regarding the types of multifamily properties that you are interested in. You are basically “training” the broker to search for deals that fit your criteria. The more precise and the more knowledgeable you are in the types of property you desire, the more you will convince that broker that you are a serious buyer.
Brokers do not want to waste their valuable time searching for properties if they do not have a serious buyer. They are not going to jump through hoops for someone that comes to them and says “do you have any deals for me?” Certainly they have deals because that’s what their business is all about. Brokers want to know what kind of deals you need.
The first question you need to ask when you find a property that you are interested in and you call the broker whose name is in the listing is whether they are actually the listing broker or if they are just a “recycler”. You need to be sure and get to the listing agent so you can get all of the particulars of the deal.
Once you are speaking with the listing agent, here are some examples of precise information that you can give to him to show that you are a serious buyer:
1. I’m looking for Class C properties.
2. I’m looking for “X” number units (this can be 10-50 or 50-200, whatever the case may be).
3. I’m looking for properties that are less than $25,000 per door.
4. I’m looking for properties that have value plays.
5. I’m not opposed to rehabs.
The criteria listed above would be enough to show any broker that you are a serious buyer and you know exactly what you want.
If a broker asks you where your funding is coming from you can reply “I represent a group of private investors and we get our down payment from private sources.” Another possible response is “We have a syndicate of partners that provide the down payment.” You could also just simply say, “I’m a serious buyer and I have the wherewithal to do these transactions and I’m looking to build up a relationship with someone who has deals for us.”
The important thing to remember when you are dealing with a broker is that you need to be educated on the types of properties that you are looking for. You need to be able to communicate to the broker that you are a player. If you implement the preceding tips, you will be able to communicate effectively and confidently with brokers.