Hi All,
I landed my dream job in acquisitions for a multifamily group a few months ago. Bad news is that I suck at acquisitions.
I have yet to find a deal for the partners to invest in. I feel like I'm a waste of company resources if I cannot do the most basic thing I was hired to do: acquire properties.
Every owner hangs up on me, brokers don't take me seriously, and every lead I get the owner wants some stupid high number. Furthermore, with real estate becoming more institutionalized I find it nearly impossible to build connections with other acquisitions/dispositions professionals at other firms for future opportunities.
Is this just part of being the new guy? How do you succeed in an industry that is very tight knit?
Not sure if I'm getting ahead of myself and have unrealistic expectations. Turns out becoming the next Sam Zell isn't so easy.
Have the other acq guys bought stuff without you?
Right now with the current market the way it is, if you are ready to capitalize deals and can't find one, you may have a problem. If this was last year I could see how someone would be in your shoes.
Reach out to IS brokers at C&W, JLL, CBRE, Colliers, hell even M&M and tell them your purchase price range, location preference, etc. They will fire out OMs to their entire contact list.
There’s a huge pricing adjustment occurring in the space right now. Be happy you didn’t acquire something 5-6 months ago with high octane floating rate leverage. The playing field is evening out as we speak, syndicators are getting roasted with LP’s backing out.
Are you an analyst? Is there really pressure on you to originate? Usually that is left for the more senior members of the firm.
Associate. Yes pressure to close.
That's pretty unusual for Associate level, I'm assuming you're at a smaller shop. Usually Associate is the "sort of but not fully training to source" level, where you'll tag along on site tours and sit in on broker calls more frequently but not actually be accountable for producing.
Are they offering no guidance? Doesn't sound like the type of shop I'd want to be at... If you have no prior sourcing experience, then they should have one of the more senior guys working with you very closely to show you the ropes.
You've been in your role for 3 months and have not bought anything. In this same period, rates have essentially gone up 100 bps or higher with a clear understanding they will increase further. Lenders have increased rates as well while sellers are still trying to hold onto the notion they can get the cap rates they used to get. Everyone I know has been pretty slow as far as acquisitions or development goes the past few months. It may seem depressing, but trust me the timing of the market is just bad right now. Once it stabilizes and prices adjust accordingly, you'll be okay.
I'd also make sure the criteria your firm is setting is reasonable and within market expectations. My buddy worked for a firm focused on Class A MF and theyre goal was to acquire 6 cap+ deals in the Southeast. He found out about their criteria later on. He couldn't buy one single deal because they had unreasonable expectations. He left after 6 months.
Correct. The smart firms are in price discovery mode right now. The morons are buying with negative leverage.
That is the role. When I was doing just acquisitions, I underwrote about 60-75 deals per year. Of those we offered on maybe 10 and we were awarded 1 or 2 deals. Some years 0. The job of acquisitions is generally more no‘s than yes.
It also sounds like you might be right out of college? Are you trying to source deals from other firms? Generally, that’s a bad idea. Develop relationships with brokers. They will have the ability to than understand what deals you want and the pricing and hopefully begin to show you deals and track you as a client.
To add to what others have said, I brought in 1 deal last year that we closed on and that was my first at my firm. I started in November 2020. Now every firm is structured differently, but we had a pipeline when I joined so I was working on deals until we slowed a bit. Surprised there is pressure to bring in deals in the first couple months, is it heavy profit/fee sharing compensation?
Keep your head up. Sounds like you need to jump ship to a new firm that can show you the ropes for a few months. It's extremely difficult to find deals for a small shop with no experience. After a few months of solid training everything starts to make sense.
Now is the perfect time to NOT be rushing into deals. No big deal at all. Imagine buying 3 months ago and with updated projections to a single digit IRR
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