There are many ways to market for off-market deals. Direct mailing campaigns, cold calling, cold texting, bandit signs – the list goes on and on. However, before you decide how to market to apartment owners, you need the names and contact information of the apartment owners.
In this blog post, I am going to outline the best online services active real estate investors use to generate these types of apartment owner lists.
I’ve broken the services into three categories: free, budget-friendly, and professional.
The free services won’t cost you a dime. However, tradeoff is that the time investment is greater and/or the list generated is more generic.
The budget-friendly services require a lower investment list source vs propstream amount and allow you to generate more customized lists.
The professional services are the costliest but also the most robust. These are one-stop shops for creating hyper-targeted lists and will offer other services that will help you grow your apartment investing business.
The Free Services
Many multifamily investors I’ve interviewed find deals on LoopNet. But LoopNet is an online listing service, so the deals are all on-market.
Antoine Martel uses LoopNet to generate off-market leads.
First, he compiles a list of brokers in his target market using the “find a broker” search function.
Then, he emails each broker, introducing himself, providing relevant details on his background, expressing his interest in buying an apartment, and providing his investment criteria. Every two weeks thereafter, he sends a follow-up email to each broker.
The follow-up emails begin with a standard template, reminding the broker of his investment criteria, and ends with evidence indicating his ability to close. He said, “every month I would change up that final sentence to tell them why I had cash, why I would be able to close, that I just sold something or I just refinanced something and got the money to be able to close.”
Whenever a broker sent Antoine a deal (on-market or off-market), he would provide his feedback in a timely manner. If the deal does not meet his investment criteria, he would respond saying “Hey, this deal is just way too overpriced. I can’t make this make sense at this price but keep sending me stuff that you have.”
There are four main benefits to this strategy. Firstly, it is free. Anyone can log onto LoopNet, create a list of brokers, and send them emails. Secondly, once the list is created, the time investment is minimal. Because of his template, Antoine says he can follow-up with 20 brokers in less than 30 minutes. Thirdly, you know the owner is interested in selling. The owner expressed interest in selling to the broker, so you can skip the part of the negotiation where you need to convince them to sell. Lastly, you build relationships with brokers, which will ideally result in more off-market deals in the future.
The main drawback is the lack of precision in targeting deals. Rather than targeting specific properties, you are targeting brokers. Therefore, unless they are hyper-focused on deals that meet your investment criteria, it may take a long time before you receive an opportunity that matches your investment criteria. Antoine followed this strategy for nine months before buying his first deal.
Commercial Real Estate Brokerage Websites
You can also follow Antoine’s same strategy but rather than locating brokers on LoopNet, you can locate brokers on the websites of the top multifamily brokerages in the market.
Using Google, search “commercial real estate brokers in (market name)”. Oftentimes, you can find the contact information of a broker in that office. But sometimes only a general office phone number or email is available. If it is the latter, call/email to obtain the contact information of a broker in that office.
Once you have a broker’s contact information, follow Antoine’s strategy outlined in the “LoopNet” section.
County Auditor Site
Another free way to generate lists online is with the local county auditor site. Most US counties have auditor (or sometimes called appraisal) websites where information is recorded on every piece of real estate in the county. Most, if not all, are free to access.
At the very least, the auditor site will have a “property search” function where you can input information and output a list of properties. Typically, the larger the county, the more advanced the search function. With an advanced search function, you can use more filters to generate a more specific list. But usually, there are only a handful of relevant filters at most.
In addition to the “property search” function, you may be able to download pre-created lists, like delinquent taxes, foreclosures, recent sales, etc. However, the type of lists (if any) that are available and how easy they are to locate on the website will vary from county-to-county.
How you download the information will also vary from county to county. In some counties, you can quickly download a list with every property in the county or more narrow lists like the ones mentioned above. In other counties with less robust websites, you will need to manually log the data.
The major benefit of this strategy is that it is free. Also, you will have access to the same data that is pulled from the paid services like ListSource and PropStream.
However, there are a few drawbacks. First, since each auditor site is created and managed by the county, no two websites are the same. Therefore, the ease in which you can generate a list will vary from county-to-county. You will not be able to quickly generate a list or download a pre-created list on every county website.
Another drawback is that even if you are able to quickly generate a list, it will likely be generic. Maybe it is all buildings with more than 5 units. Or maybe it is every building in the county. Therefore, once you download the list, more work is required to filter out all the irrelevant properties.
Also, since you are pulling public records, the owner’s name will likely be an LLC. Therefore, additional effort will be required to identify the true owner’s name and contact information (see the “ListSource” section below for more details on how to skiptrace the owner’s contact information).
Lastly, unlike the first two services where every deal has an owner who is interested in selling, only a portion of the properties in the list will reply to your outreach, let alone be interested in selling.
If you have a hard time locating the search function or lists on a county auditor website, I recommend emailing or reaching out to the webmaster for assistance.
The Budget-Friendly Services
ListSource, a product provided by CoreLogic, can be used to generate a custom list of apartments based on data pulled from public records.
You can generate a list in one of two ways. Firstly, you can use their “quick lists” function to download a list based on standard criteria. Examples of the quick lists are absentee owners, estimated equity (to determine if they are underwater or have lots of equity) and foreclosures.
The other way is to use their “Build List” function to generate a completely custom list of apartments. A list is created using “Build List” in six steps:
- Filter by geography (city, area code, census tract, county, MSA, etc.)
- Filer by mortgage (loan-to-value, maturity date, loan type, interest rate, etc.)
- Filter by property (number of units, equity, sale date, property type, year built, total assessed value, etc.)
- Filter by demographic (age, occupation, martial status, income, etc.)
- Filter by foreclosure (pre-foreclosure, auction, REO, and respective details)
- Filter by other options (owner occupied status, trustee-owned properties, corporate-owned properties, and address completeness requirements)
Once you’ve completed step six, ListSource will tell you the total records available based on your filters.
One of the benefits of ListSource is that you can access the “Build List” function for free. This means you can see the exact filters available, as well as how many apartments will be on the generated list. However, there is a cost to download the list. You can either pay per list or select from a variety of subscription options.
James Kandasamy (whose full interview you can listen to here) uses ListSource to create lists of apartments with owners who may be motivated to sell. He uses the geography filter and the property filter. For the geography filter, he selected his target market. For the property filter, he selects the number of units and the sales date. He focuses on apartments owned for more than five years. He said, “most of the time the sellers who are selling the property within the past two or three years didn’t build enough equity to give you a good deal. The owners who have the property for more than five years may have bought it at $15,000 to $20,000 a door, but they don’t mind selling it to you are $40,000 because for them it’s a good deal, even though the market is at $50,00 a door.” Once the list is generated, James will then text the owners.
Cory Boatright (whose full interview you can listen to here) targets all properties of a certain size (75 to 150) in his target market. He found that most apartment investors assume “just because [the owners] have 100 units or more that they’re happy and everything’s great, and their bigger than everyone else” whereas the truth Cory discovered is that “these people are still motivated.” Cory sends owners direct mailers. But rather than basic postcards, he sends FedEx packages or envelopes with the words “urgent” on the front.
Another drawback of ListSource is that most of the owner names generated on ListSource for apartments are LLCs. Therefore, you must use a skip tracing service to locate the owner of the LLC. James uses TLO, because “it’s the best way to find the direct owners.” A manual and much slower way to locate the owner of the LLC is through the Secretary of State corporation search function (which is what the paid skip tracing services do).
Cory locates the owners of LLCs using a few skip tracing services – American Tracers, IDI, and delvepoint, with the latter two being harder to set up but having the best data.
Another skiptracing service is skip genie, whose founder, Larry Higgens, I interviewed on my podcast (which you can listen to here).
Also, like building a list on the county auditor site, you don’t know how many (if any) of the owners are actually motivated to sell their apartment.
PropStream’s capabilities are in-between ListSource and CoStar/YardiMatrix. PropStream pulls the same (or similar data) as ListSource but the way you search and the resulting outputs different. On PropStream, you search and filter your list using a Dashboard. You input your market, select the filters and the output is a map will all the properties that meet that criteria.
Besides the map Dashboard, the other major difference between PropStream and ListSource is that PropStream has built in skiptracing capabilities – for a fee. PropStream will append an LLC’s owner’s contact information to the generated list, which means you won’t need to download the list and use a second service to locate the actual owner’s contact information.
PropStream is Dan Schwartz’s (whose full interview you can listen to here) preferred list generating service because of the built-in skip tracing feature. He said “You can use a tool like PropStream and within five minutes get a whole list of phone numbers for vacant houses in your target market.”
Jessie Neal (whose full interview you can listen to here) also uses PropStream. He said “you can go to county records if you don’t want to pay for a service [like PropStream]. I’m a big fan of paying for a service because it saves time.”
Unlike ListSource, you do not have access to PropStream’s Dashboard before buying a subscription.
Also, like building a list on the county auditor site and ListSource, you don’t know how many (if any) of the owners are actually motivated to sell their apartment.
The Professional Services
CoStar is a one-stop shop for all things commercial real estate. Generating lists of off-market deals is just one of many different services provided by CoStar. Because of the level of detail on the commercial properties in CoStar’s database (which comes from public records and CoStar research), you can select from countless filters to generate a list of potential deals. Based on your filters, like PropStream, the results are available presented on a map.
A major advantage of CoStar is that the list generated will include the contact information of the true owner at no added cost. This is a massive time saver since you aren’t required to skip trace to find the true owner. This is the main reason why Dylan Borland (whose full interview you can listen to here) uses CoStar to build multifamily lists. He said it “does give us the owner’s name, address, the true owner, and then their phone numbers.”
Another major advantage of CoStar are the extra tools in addition to creating lists. CoStar has very detailed and robust property level information, sales and rent comparable data, market data and KPIs, historical performance data of the property, etc. You can quickly generate professional reports on the market or submarket the deal is located in. Also, many Best Ever Interview guests said that CoStar news is there go to resource for market intelligence (Anthony Scandariato, Dan Hanford, David Toupin, etc.)
A drawback of CoStar is its cost. Dylan pays $350 per month for access to CoStar’s database, which is a discounted rate because he has broker’s subscription. Cory Boatright (who is mentioned in the section on ListSource) says a CoStar subscription is $25,000 to $30,000 for an individual user.
There is a quick and inexpensive way to access CoStar. Cory says you can access CoStar is through a commercial broker who already has a subscription. However, there will still be a cost incurred to you in the form of the broker fee since they will want to represent you on any deal you find through CoStar.
The only other drawback, like building a list on the county auditor site and the budget-friendly services, is you don’t know how many (if any) of the owners are actually motivated to sell their apartment.
YardiMatrix offers essentially the same services as CoStar. You can create detailed lists and generate a map of the results. The owners contact information is also generated. You can access sales comparables, rent comparables, property information, and historical performance data to help with underwriting. You can generate professional market and property reports. It also shares in the same drawback as CoStar – the subscription is over $10,000 per year.
However, one advantage YardiMatrix has over CoStar, according to Rob Beardsley (whose full interview you can listen to here) is better the sales and loan data. This means there are more sales and mortgage-related filters compared to CoStar.
So which service is the best? Well, like all things in real estate, it depends.
If you are just starting out, the free options are likely the best since your business isn’t generating income.
Once you begin to generate income and want to create a market budget continue to scale, the ListSource and PropStream are best.
If you are a large company (own thousands of units) and are willing and able to spend tens of thousands of dollars to generate highly customized lists, as well as benefit from the additional bells and whistles, CoStar and YardiMatrix are the best.
Disclaimer : The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.