How To Market To Multi Unit Properties
I’ve had a lot of questions over the last call it nine to 10 months, as more and more and more people want to get into the space of multi unit investing, which I love. Okay, I personally don’t own any multi units yet. And and that is in large part just because they are harder to come by. And when you do combine them, typically the homeowner tends to either be a pretty savvy investor and or that they’re just not that motivated. So they are going to want absolute top dollar or simply they just don’t want to sell because it’s such a great return on their money. But let’s talk about this. How do you find them? Where do you go? How do you market to them? How do you engage them? What are the things that I can help you guys with to try to get your first couple multi units.
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So first of all, my experience in multi units is they have been over the years great buy and hold opportunities. However, now because people understand what they have, and the market is on fire, and there’s so many people marketing them, the sellers are becoming a lot more educated, they’re starting to really understand what they have, they’re starting to understand what an ROI is, they’re not just there being some random passive investor that just happened to buy a four unit, they are really becoming much more educated on the value of these properties. And so when you are talking to a, you know, multi unit owner, understand, you’re gonna have to know what you’re talking about know what numbers mean, right? Know, the ROI is know the cap rates understand how much you can, you know, raise rents, if need be if you do buy this, because, you know, based around what we have seen here in Phoenix, most of the multi unit owners, they essentially want to sell it at less than like a one cap, meaning they want to sell it for a million dollars in it rents, you know, for the rents would be you know, $10,000 a month, right that that is not what’s happening. Currently, the rents are more like $6,000 a month, but they want to sell it for a million dollars. And so on the surface level that might not be that intrigue, intriguing. But what’s happening is they’re very educated on what rents could be, and you need to understand what rents could be. So they might be renting it for you know, 15 $100 a month per unit, and it’s a four unit, so it brings in six grand a month, but you might be able to be renting it at $2,000 a unit, right. And that’s why they’re actually trying to sell at a million dollars, because they’re gonna try to sell you on the fact that their rents are low, you also have to understand how much work is going to be, you know, involved. So when you’re talking to these, you know, multi unit sellers, you really want to have them understand like, hey, if we’re able to do this, I’m gonna have to put in this much money to get the rents back out. Is there any reason that you’re not actively doing this? Is there any reason you’re not actively raising the rents? Is there any reason you’re not remodeling this? And quite honestly, why are we even talking Mr. owner? And I have found that has worked the best. You’re essentially saying, Hey, I don’t think or know that I’m the right fit. If I’m the right buyer for you. I could be but let’s talk about why we’re even talking here, right. Let’s talk about the real need for yourself. And also can you do some creative financing on these? Absolutely right.
So finding more about the needs of this homeowner is really going to help you guys. Not homeowner but multi unit owners really going to help you guys move the needle. Just like in any negotiation. The difference being is more often than not the owner of a multi unit is ready to just cash out. Okay, that is really the majority of multi unit owners that are willing to engage in this conversation of selling, they’re ready to just cash out, you may come across an owner that is in a financial pickle, that, you know, maybe they’re going through an issue like a divorce or something that creates a much higher level of motivation that you’re able to negotiate a little bit easier. But the vast majority of multi unit owners that are willing to sell essentially want to cash out and they’re gonna ask top dollar, so just know that going in. So how do you find these people I use prop stream, if you just go to TSF data calm this, that link will bring you to prop stream and then use code PSLF, you can actually get 10,000 downloads for free, as well as seven days for free trial. So essentially, you get a free list of 10,000. I use proc stream to swap data calm and use promo code PSLF. And what I would do is I would target them now most people know me because I do a lot of cold calling. The challenge you will see with multiple units is those owners typically own it in an LLC or a trust. And when that happens is very hard to find the right person skip tracing, right, you can reverse engineer it, you can go in and go into the corporation commission or you can go to the Secretary of State and you can go find who the managing member is and skip trace them. But that takes a lot of time. So one thing I advise a lot of times is for you know people to find an area, let’s just say Phoenix like not, when people think Phoenix I think massive massive Phoenix is just a component of Maricopa County, right? Scottsdale is just a component, Glendale Mesa, these are all just cities. So Phoenix isn’t as big as people think Maricopa County is big. So if you were thinking Phoenix, I want to be somewhere in Phoenix, I would take Phoenix. And then I would go look at multi Unit Two to four, you know, two to four. And I would download that. And what I would do is I would mail it, I would send direct mail to them. The reason being although Yes, it’s more expensive, although Yes, you get low callback ratios relative to where they were. It will help save you time, energy and effort versus skip tracing cold calling. I’m not saying don’t try to cold call. I’m not saying that at all. I’m just saying the vast majority of these multi units are in an LLC or a trust or something that is going to make it hard for you to find the right person. Okay. So I like mailing multi units, and I like putting aside enough budget to mail them consistently every single month. Because as you guys all know, this is an event based business today, they might want to sell for top dollar, six months from now, they might have an emergency scenario that they need to sell and they need to sell in 30 days. That’s why if you mail them on a consistent basis, you’re going to get some recognition. They’re going to realize, oh Justin keeps mailing me this guy, Justin keeps mailing me, here’s another either postcard or letter from Justin. Right? And then at some point, you’re just going to be around long enough that they’re gonna call you versus anything else, right? And obviously your message remains the same. You can close quick you have cash, no commissions, etc. Right? And so, while I’m a massive advocate of cold calling, and texting, in this case, I would prefer direct mail now I personally am not going after multi units directly. Okay.
We just wholesaled two or three duplexes in Bloomington, Indiana. Okay, it’s right next to Indiana University we sold that we wholesale three of them. The only reason I didn’t buy them for myself as a rental as rentals is because they are the massive storm in Bloomington, Indiana. And all of the units were flooded with a foot to three feet of water under the units. So as we all know rehabbing I’ve done hundreds of them they have their challenges with contractors in the cities and all the other challenges so I just elected Listen, I don’t want to do six remodels with standing water under the property which means I might have to do you know kills and you know lift the drywall up three feet on all of them do you know new cabinets, I just might have been over my head with those properties. So I decided to wholesale them to a local investor. That being said, I would likely be buying most of the multi units I would find anyways. And so you know it’s a it’s a case of I’m not directly going from those though, that Deal or those deals, if you want came from my PPC campaign, I’m firm believer in PPC, that’s where those came from, we made a nice little wholesale and we moved on. But you know, in terms of targeting them, I like direct mail, I would pick the city that you want them in. And then I would be consistently putting marketing budget together with them every single month to make sure you’re reaching out because it is a timing issue, when it comes to a reason they would like to sell and in when it comes to, you know how to negotiate the deal. Again, most of these individuals now are much more educated, they really get it before a lot of people just do it, because they were told, you know, hey, you know, buy multi units is a good investment, now they really understand. So you’re gonna have to understand cap rate ROI, you know, you know, how much you can raise rents, what has been done in terms of maintenance deferment, and that you need to go in have to do, you know, all of that is stuff that you’re going to have to be able to talk to these individuals about, and then figure out whether you can be the right fit for them, because again, most of them want to cash out so here’s that this is the last 10 minutes of really trying to understand how to find them. And I believe prop stream with direct mail, and then ultimately how you negotiate and how you negotiate just like anything else is just, you know, stick to it, how you can provide value to them, what they’re really looking for, and if they do want to cash out, just might not be the right fit, right because my firm belief is, you know, Grant Cardone has done a brilliant job marketing multi units is the best way to invest. I don’t disagree with him. But I have a philosophy just about like, there’s 10 homes for every one multi unit. So just casting a wider net and doing that for single family homes and condos and townhomes to me is a better use of my time money in you know, resources. So I think love multi units, I can tell you, I don’t specifically go after them directly. But if I were to what I just advised on is exactly how I do it. So again, if you’re listening to this and you’re on iTunes, give me a five star review. I’d greatly appreciate it and leave a review. If you are not and you actually happen to be at YouTube youtube.com forward slash Justin Colby. Make sure you subscribe. So the scribe is that word. And make sure you ask me questions right here in the thread of YouTube and I’ll make sure to answer them for you. And make sure like the videos and all that kind of jazz and make sure you turn on notifications too. So a lot of demands here I apologize but I want high engagement on YouTube and I want you guys to you know get what you need out of this podcast. I want this to be the number one rated real estate investing podcast on iTunes and YouTube. I’ll holla at you guys later see on the next podcast.
