What do you want your next investment to do for your financial situation?
Do you want to preserve capital and receive a healthy return on your investment?
A common answer is “I need both”. Investors want to preserve their capital – not lose money – AND – receive a good return on that investment.
Finding both security and good returns in your local market may be difficult or impossible. If so, then investing out of your local area may make the most sense.
Real estate rental property, commercial real estate, and real estate syndications can provide a great way to make some cash and also maintain financial stability. But if you don’t live in an area where the real estate market is on the upswing or don’t want to buy rental property nearby, you might feel a little stuck.
Savvy investors find hot commercial real estate investments outside their local market by exploring out of area markets. If you take the initiative to look for commercial real estate outside of your local area, you are more likely to see decreased competition, easier deal negotiation, and purchase properties than provide higher returns. For these reasons, it seems like a no-brainer – You need to find off-market and out of state commercial real estate!
You are coming to the realization that finding off-market or out of state properties could increase your competitive edge, and that with this advantage, you could easily use real estate outside your local market to retool and refine your investment strategy.
Sounds great, but how does one actually do this?
And if you are fortunate to locate a great property, how do you then operate and manage it from afar?
Let’s start with locating a good apartment building to buy……
Unlike homes, most apartment deals are not listed on MLS. There is no central “database” that contains all commercial properties for sale.
They must be found in other ways.
Here are a few pointers.
Anyone can do this if they are consistent and disciplined in their efforts.
The question is: Do you have enough time to do what it takes?
GET TO KNOW YOUR FELLOW INVESTORS
First, you want to get to know and make friends with other real estate investors especially in your target market. While at first, this might seem counterintuitive because you might think they are your competition, there’s actually a TON of value in having relationships with people who share your interests.
Commercial real estate investors, especially those who are more experienced than you, often already have contacts and connections to investment opportunities that aren’t listed elsewhere. Many investors already know and work with real estate brokers, have already dabbled in direct mail marketing, and can already guide you toward or warn you against certain locations or strategies.
Whether you are looking for a great deal, or you want to discuss market analysis, or exit strategies, rubbing elbows with fellow real estate investors and real estate professionals will help you gain the connections and knowledge you need.
By forming relationships, you can gain insight into their strategy, willingness to sell, and real estate approach. Multifamily investing is a team sport – investors are always looking for partners to expand their portfolio. Find a few good partners and you are on your way.
If you’ve already built a network of real estate professionals, lean into it!
And, if not, it’s time to start. This is the #1 way you can expand your reach and find your groove in out of state and off-market property.
USE A COMMERCIAL REAL ESTATE AGENT FOR OFF MARKET AND OUT OF STATE PROPERTY LEADS
Real estate agents spend most of their time speaking with buyers and sellers. They know all the properties in their market and those investors who buy and sell in that market.
Commercial brokers are your best ways to source deals.
Build relationships with brokers – over time.
CONNECT WITH AREA CONTRACTORS
A good idea for individual investors is to connect with contractors in your desired market. Contractors often can help you find unlisted real estate because they know what renovations they’ve quoted and which owners have been considering a change. You might even consider partnering with a contractor to help you buy a distressed property and hit your investment goals.
Contractors can help in different capacities and with many types of real estate investing. Working with a “pro” contractor can really help you develop your real estate investment strategy because as they are renovating properties and working with real estate developers, they might share property details with you. You never know when the relationship might be mutually beneficial.
USE DIRECT MAIL FOR INVESTING IN OFF-MARKET PROPERTIES
A lot of real estate investors use direct mail to find off-market real estate. Direct mail marketing does not require a lot of money (but it takes time to see results) and you can help generate off-market leads for years to come.
Whether you are a new real estate investor or you’ve got some experience under your belt, you should consider direct mail marketing because it’s a quick way to get your name out there.
Your first step in starting a direct mail campaign is to figure out your audience. This way you can craft a very well thought out targeted campaign. After you have created your mailing list, send out the mail to residential real estate, apartment building owners, and other types of properties that you’d like to have in your portfolio.
FIND OFF-MARKET PROPERTIES THROUGH WHOLESALERS
Wholesalers implement systems – direct mail, cold calling and text campaigns – to locate distressed owners or properties. They contact property owners all day by direct mail, phone, and text.
When they locate a good deal, they get the property under contract and then assign the purchase contract to a buyer for a wholesale or assignment fee.
HOW TO FIND OFF-MARKET COMMERCIAL PROPERTIES FOR A GREAT DEAL
Off-market deals are so often talked about in the real estate investment arena, and if you weren’t sure how to find off-market properties, now you know!
When you know where to look for the best off-market deals, it’s a lot simpler to diversify your real estate portfolio, invest in properties that pay regular dividends, and collect rental income from your commercial holdings.
As you explore off-market real estate, you’re sure to see decreased competition, meet new fellow investors, gain insight and experience that leads to personal growth, and quickly brush up your negotiating skills. All of these will positively impact your cash flow, diversification strategy, and investment portfolio!
This all sounds great, BUT DO YOU HAVE THE TIME AND EXPERIENCE?
This is where multifamily syndicators provide value.
At Spark Investment Group, we are actively completing the action items above on a daily basis. We constantly network with other apartment investors, commercial brokers, property managers, lenders and contractors.
We NETWORK every day. Attend conferences, go to Meet Ups and Zoom Meets – all with the express purpose of finding deals and good partners to work with.
We KNOW the players in our industry and we partner with them to bring you excellent investment opportunities. Syndications are structured so the investor, the limited partner, gets paid first – the general partners and operators typically do not receive compensation until the business plan has been executed and the property profitably sold.
You can certainly find and operate deals on your own?
But what’s your time worth?
To learn more about real estate investing and syndications, reach out to us at https://investwithspark.com/contact/ today!