How to find Off-Market CRE properties?

Thought this might be a useful discussion. I'm looking for multi family investment properties in particular.

When it comes to finding properties there are plenty of listings online, but what about "off-market" deals?

  • What is the best way to find these properties?
  • What are the benefits of this acquisition vs others on the market?
  • How can you approach the owners?

If there are other questions pertinent to this discussion please ask, so we can have them answered.

Comments (6)

 
Aug 1, 2019 - 11:10am

1) Relationships
2) possible advantages include: faster closing, better deal terms, relationship building with seller who potentially may sell more to you in the future, investors feel better about it because it's "exclusive", institutional firms have advantage because of their more robust and thorough underwriting/DD processes, less bidding competition which can lead to higher prices and inflated valuations, OMs from brokers are always too generous with assumptions and even if you're a sophisticated investor with a lot of experience underwriting deals you will one way or another be affected by the wack assumptions on those packets

AFAIK, and from what I have learned as an SA at REPE MF (bx/stwd/brrokfield), we try to source as many off-market deals because of the above listed reasons - one example would be when we sourced a deal from a shit-tier multifamily owner/operator who left a whole lot of money on the table by selling to us at an absurdly low price. the seller was quite unsophisticated in their underwriting and we scored big on that investment

3) sorry i don't have a comment on this. not qualified to answer as I dont have personal experience with deal sourcing.

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Most Helpful
Aug 5, 2019 - 12:05pm

OFF MARKET deals can be total bullshit but on occasion, buyers do get lucky to find a steal as VCWannabe mentioned. usually, brokers will pitch a deal as "OFF MARKET" a week or two prior to listing the asset at the top end of the whisper price. the article below does a great job of explaining off market deals. A lot of institutional groups don't touch OFF MARKET deals on the buy or sell side. i have also seen deals that have been on market for 2 to 12 months being show as off market. be cautious and don't fall for the hype without doing your homework!

https://wildhorncap.com/off-market-deals-the-holy-grail-or-a-whole-wast…

Array
  • 2
 
Aug 7, 2019 - 5:35pm

Go on loopnet and introduce yourself to all the brokers in the market you want. And from there, stay in touch with them: Send market reports every now and then, keep them posted on your progress even if you just buy single families or duplexes, and namedrop people on your local team. The first deals they send you are going to be dogshit, so be ready for that. But be responsive and reply when you say you're going to. If you do a good enough job they'll slowly start taking you seriously. It's slow and steady but it works. I've been working on one broker for a year now and only now is he sending me off market multifamily properties. Good luck!

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