Direct/Off-Market Acquisitions — anyone else cold calling ?
Just curious if other guys on WSO are also doing this. I hired/trained my own team of cold callers to dig up deals — my primary focus is on mobile home parks, RV parks, industrial outdoor storage, and some multifamily. I’ve gotten hiring and the process down to a tee. Starting to see success and deal flow ramp up for next year. To the cold callers out there, what are you using for data?
Also… I’ve heard of some sponsors who have an in-house team who are just cold calling property owners to find deals. Does your firm do this? Any success?
Based on the most helpful WSO content, here's what you need to know about cold calling for direct/off-market acquisitions:
Cold Calling for Off-Market Deals
Data Utilization
Success Stories and Practices
Practical Advice
Additional Insights
For more detailed discussions and shared experiences, you might want to check out the following threads on WSO: - https://www.wallstreetoasis.com/forum/real-estate/random-cold-call-from…</a">Cold Calling in Acquisitions at a Developer - https://www.wallstreetoasis.com/forum/real-estate/random-cold-call-from…</a">Cold Calling for Off-Market Deals
These threads provide valuable insights and practical advice from professionals who have successfully used cold calling to source off-market deals.
Sources: Random cold call from analyst lead to fantastic deal, Commercial Real Estate Brokers: Cold Calling Advice, Random cold call from analyst lead to fantastic deal, How to Effectively Reach Out to Owners for Off-Market Deals, Cold Calling in Acquisitions at a Developer
How do you generate leads?
Where do you find these people?
How much do you pay them?
Crexi/costar/skiptracers
LATAM/overseas
Pay varies
It feels like cold calling got really popular with the small time syndicator crowd over the past five years, and that it’s become increasingly difficult to execute. I’ve noticed it typically has a better shot of working if:
- asset is in a tertiary or secondary market that isn’t heavily brokered
- asset size is small
- asset is in a niche that is undergoing institutionalization where the buyer can afford to pay the sellers idea of a full price and still operationally generate value. Self storage, rv, iOS, shallow bay, etc over the past 5yrs
Given where rates are and the already happened institutionalization of those niche asset classes I think it is much tougher sledding for the cold callers these days.
I focus more on creating relationships to generate deal flow. Feels like it is relatively much harder to organically generate deal flow through cold calling since the interactions between parties are 100% transactional and short term oriented.
how are you creating relationships to generate more deal flow? Through brokers or bird dogs? Or direct to sellers?
Making friends with brokers and other owners
Have heard of people having in house cold callers, but tbh if someone said their firm had that I would think it's a lower tier firm/principals.
You should be able to generate deal flow through brokers and your own relationships from principals if you're an established shop in certain markets. Nothing wrong with it, but again points to not being a really established firm, one with little to no connections, and maybe Marcus and Millichap brokers that went over to the principal side.
Job wise would not see it as a positive from an employer/hiring standpoint.
Interesting points. Yes, I think it’s generally if you’re not as high up on the totem pole, a direct outreach would really help bolster deal flow. Though the largest/most active buyer in my asset class who has first looks on any and all off market deals — they have an in house team focused on direct outreach/cold calling.
Maybe it’s ultimately a bit chicken-and-egg, but let’s say you’re a principal that has capital to deploy but not really established (beyond pedigree) and lacks A+ connections on the broker side.
Do you think a better use of time to gain credibility is 1) hammering the phones until you can find willing sellers or 2) bidding on marketed deals and gaining visibility through that process? Obviously pros and cons to each approach — and maybe the answer is “some combo of both” — but curious for your take.
If you bid on marketed deals, you’re bidding on a deal that everyone on the broker’s insider list has passed on for whatever reason. It most likely is a shitty deal. Not saying that’s the case for all marketed deals… but think about it, a broker only has the listing for so long. By the time the listing is up, they’ve been pitching the deal to their guys for about a month or longer and everyone’s passed on it.
I think you should dual track it. Keep brokers/bird dogs warm, but also hire on your own cold call team to find you deals.
That's fair, I think the approach would be more let brokers and the top guys know you have capital, show you're serious about the market by going to the big local events and spending a few k to go to the events and meet people, and being honest about feedback/really going after good deals after you get a sense and closing.
You can also do direct outreach, but maybe a more personal approach would be better like a handwritten letter to certain owners or meeting them at certain conferences, events, etc if it's a group of smaller owners. Just thinking what a young, aggressive, smart guy would do and how they would want to be portrayed (dress nice even if clothes cost more, get nice simple business cards that are maybe 2x the cheapest cost but are professional, come across as polished and don't get drunk/crazy at these events).
I have no idea how anyone generates any meaningful leads without a direct to seller approach at a minimum when you are starting out. Of course having brokers bring you deals at a good price consistently is way better, but how do you become the person that gets access to those deals? You need a reputation of being someone that closes. How do you get that reputation? You need to do deals. How do you do deals when you start and (assuming you are in a "competitive space") the incumbents know more about the assets you are targeting and are better at running them? You need to buy at a good basis. How do you buy things at a good basis? My experience is that you need to be buying in a less competitive environment.
I am sure there are people that will tell you that they started out differently, but MY EXPERIENCE is that any deal I looked at in the beginning of my career that was well marketed I had no chance of of making a solid risk adjusted return. I worked my ass off calling owners and brokers simultaneously to find a deal that I couldn't fuck up (still almost fucked it up).
Cold calling isn't fun, selling yourself isn't fun, but I still do not know another way I could have gotten started. Maybe there are some people out there that worked for a firm in a market and were operating their own RE biz within the firm cradle to grave? Maybe then you have enough connections and credibility to get a good look at some deals.
Exactly, well said, this 100%.
You can tell from some of the other responses in this thread they’re naive/young/inexperienced. You can be nice and talk shop all day long with brokers, they ain’t going to show you shit. It’s on you to find deals, close them, make a name for yourself then you’ll get deal flow. Till then, pick up the phone.
Yeah exactly, brokers are tracking (or should be) people who are "hot", and the best deals will only go to a targetted list. So to repeat above, you can't rely on them and gotta pick up the phone
Bump. Anyone else doing this? Looking to trade/compare notes.
What software are you using for leads and data? What’s an affordable option if you’re a smaller player?
You have a couple of options. Crexi, costar, and Reonomy.
Any recommendations on those options?
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