Ep 134 - How Do We Find Deals?

Hey, everybody. Flip and Danny here, founders of the Freedom Real Estate Group family of companies. And welcome to another episode of our.

Podcast, which is called Freedom through Passive Income.

That's right. And this episode is called How Do We Find Multifamily Deals? Yeah, because they don't land in our lap.

No, they don't.

Not all the time.

Sometimes they do.

Sometimes they do. Yeah, actually, sometimes they do.

So we'll talk about that. So we made a little bit of a list here. This is not everything. There's obviously many different ways for you to find deals. In fact, I should write one down. It's the top of my mind right now, but I'll try and remember it.

Start with it.

Okay, so your network of professionals, so title company attorneys, divorce lawyers, estate planning, property managers, any of those professionals are going to have and know people that have got multifamily properties, and they might know when or that what their destination or the business plan is for their desire to sell. And if you're in that network and you are a trusted person, then you might get the inside scoop on a deal that nobody else sees.

Right? Yeah. Because the seller can say to his property manager, I'm thinking about selling. You know, boom.

Yep, boom. Well, you know what? I know Flip and Danny.

Yeah, exactly.

They buy these deals. Let me just send them an email. And you don't have to do any work and you don't have to pay any commissions. And so your network is super, super important. And I had on here networking, but that really was implying going out there to network. Right. You know, getting out there with other investors, maybe apartment meetings or REI clubs or things like that. So it wasn't the same. So as soon as it came on, when I said, this isn't everything, I went, I forgot one of the big ones.

Yeah, absolutely. But the one that we always start with is brokers.

Yeah.

So we'll look up brokers in the area that are doing multifamily deals, because a lot of times they'll get deals and they won't put them on the market. They'll have the deal and they're leaving it off the market. You know, they're wanting to see what the interest is in the. In the property. And so they won't put it on the market. So you won't know unless you call them and talk to them. And one of the first things, when we went to our very first multifamily mastermind, they said, always call your brokers. And somebody said that they called one of the biggest brokers in Their town. And the broker has like 50 agents and they're all. It's like the guys club, you know, and they couldn't get in touch with anyone. Couldn't. They kept calling, kept calling, Couldn't get in, couldn't get in. And then they went to church on Sunday and they were, they were being an usher at the church and they just happened to talk to somebody, says, yeah, what do you do? And he goes, oh, I work at blah, blah, blah, which was the brokerage. He goes, really? I've been trying to get a hold of you guys. I'm blah, blah, blah. Next thing you know, boom, boom, boom. And. And he was working on a deal because just at church. Hey, what do you do? Yeah, you know, so it's networking.

Yes. You just tied that in, didn't you?

Brokers and networking. Yeah, there we go.

Yeah, yeah. And brokers really have their pulse on the market and they have the relationships with a lot of these sellers. And like Flip said, most of the time you're not going to see especially commercial deals hit the market ever. Brokers usually have the network of sellers and buyers within their wheelhouse that they can go, hi, Mr. Seller. I know, Mr. Buyer, let's put you two together. Or hey, Mr. Seller, I know 10 Mr. Buyers and I'm going to put all of you together and we're going to be able to do this without a whole lot of work. And commercial brokers typically do it on their own because they'll just get the entire commission, right?

Yep, exactly.

They don't need a buyer's broker to be representing the other side. So I love that one. It's probably the most useful one that you have. There's also wholesalers, so it's not as common to see wholesalers in the multifamily industry because you really don't want to go to somebody who's got, you know, a 339 unit, for example, and say, hey, I'm going to tie this up.

I'll buy this in 30 days.

Yeah. And then I'm going to go sell this contract to somebody else that is a real buyer. So it doesn't really happen a whole lot, but on smaller deals it does still happen. Because if you're looking at deals within, I would say maybe 50 and under. Yeah, 50. Yeah. It might go a little bit higher than that. But you still might be dealing with mom and pop type people as opposed to institutional buyers or buyers that are, you know, have a company and they have thousands of doors. So when you do have mom and pop type properties, you still might have wholesalers out there that are sending the deals. Like there was a wholesaler for 34 unit that we were talking about. And then I'll let you talk about.

Yeah, Investor referrals. Because a lot of times, I mean, even us, like, we'll get property sent to us, and, well, it doesn't work for us, so we'll refer that off to somebody else, to another investor that might be in that area or that might. That's something that they like, you know, or right now, we're not really looking for the smaller units. And so, you know, but we know other people that are. So if we get sent those, hey, you know what? This doesn't work for us, but let me send this over to this guy.

Yeah.

You know, or this girl or whatever. So.

And because of our history, we know a lot of single family investors. Right. And so all of them know we've gotten into multifamily. So I'll get tagged. And this is the next one. Facebook. I tagged in Facebook all the time. Like, oh, there's a multifamily. Danny does that. So they'll tag me and I'll go take a look at it. Then I'll comment, give them my email address so I can go take a look at the deal. So that just led into Facebook. Facebook is a great place to get other stuff. And then commercial software.

Yeah. So with Single Family, we were using Propstream, which is what we talk about a lot. And Propstream does do some in the commercial area, but it's not its specialty. And so we were trying to find what is the software that we can use for this. And so we use Reonomy and then costar. Costar is more expensive than realmy. They're both expensive compared to other softwares. And then Deal Flow.

Yeah, yeah. And right now, we're not even using costar. It's on our backup list because Ken, our underwriter, really loves it for its ability to provide comps. But right now, a lot of the deals that we're doing are our backyard, so it's a lot easier for us to do it without the expensive software. But we do have Reonomy and Deal Flow, and those are both good resources for finding deals. And if this information is valuable, please hit the like button for us. Boink, boink, boink. I like the boink instead of the Hulk Smash.

Yeah, no more Smash.

All right. Driving for Dollars is another one.

This is again, this is really useful in the single family because, you know, when you see a Single family house that's vacant or whatever. Guess I'm going to call that one. Right. Well, it's a little bit more difficult with multifamily because if a multifamily property is like a 12 unit or 20 unit that's completely vacant and boarded up, like, I don't know if I want to tackle that one. That's going to be a lot of work. But anyway, driving for dollars is always a good thing. Plus you' sometimes people will put a sign in the yard, you know, the apartments, you know, that says apartments for sale or building for sale or whatever. They won't ever market it. I don't know why, but yeah, so you just never know when you're driving for dollars.

Yep, exactly. Right. And then we talked about those last one that we have on this list anyway is just pulling lists. So many times you can pull lists of tax defaults or just, you know, people foreclosure lists. There's again, these are lists that I know we've got a list of lists that's probably, I would say there's 30 or 40 types of lists that you can get free and clear owners, high leverage, debt. There's just tons of lists that you can find motivation. And then what we call them is stacking them. So if you've got 30 filters that you can use, then you pull these lists and then you stack them by finding out which owners are on multiple lists. And so if you've got somebody on seven lists, that's a higher set of motivation. Right. And so you go after and you start skip tracing. Skip tracing means you look them up, find their phone number or email, any type of contact information possible. You're just essentially stalking them. We'll even go on Facebook, see if we can find them. But anyways, so you can buy the list, you can stack them and then you can start skip tracing and cold calling them. So that's another really great way to find sales.

One of the parameters is just they've owned it for seven years.

Yeah, that's because that's about the time frame people would sell. Right. They're going to own it for five to seven years. Reonomy even has a most likely to sell algorithm, Right. That you, you can just filter by that and then just start calling those because they have the algorithm where they think these people might be willing to sell right now. So not something that a lot of the people that watch this particular podcast are interested in. We usually do this type of podcast on our Real Talk where other investors are learning a little bit about how to be a real estate investor and do it for themselves. This freedom through passive income is more for the people who just want to go, hey, what is it that you guys do and you do? I trust you. Do I like you? Can you teach me more about it so I'm comfortable and I'm going to invest with you so I can get passive income? But they're still curious. They like to know the behind the scenes stuff that we're doing in order to get the deals. So we thought this would be a nice episode.

Yeah. Make sure you're going over to our website, freedomcapitalinvestments.com make sure you're joining our investor club to learn about our deals that we can't put in the other locations.

That's right.

But we're on all the other social media so make sure you're interacting with the gang out there. But we always end all our episodes with invest smart, live happy. Bye, everybody. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice. Opinions and information on this show are not guaranteed. All investment strategies have the potential for profit or loss, y'.

All. Sam.