Many times when you are trying to get in touch with the owner of an apartment community, you’ll find that the asset is held in an LLC. Unlike sending mailers to single family homes where there is one non entity owner, you’ll have to dig a little bit to find out where to send your mailers. Theo will explain how to find an address to send to. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
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TRANSCRIPTION
Joe Fairless: There needed to be a resource on apartment syndication that not only talked about each aspect of the syndication process, but how to actually do each of the things, and go into it in detail… And we thought “Hey, why not make it free, too?” That’s why we launched Syndication School.
Theo Hicks will go through a particular aspect of apartment syndication on today’s episode, and get into the details of how to do that particular thing. Enjoy this episode, and for more on apartment syndication and how to do things, go to apartmentsyndication.com, or to learn more about the Apartment Syndication School, go to syndicationschool.com, so you can listen to all the previous episodes.
Theo Hicks: Hi, Best Ever listeners, and welcome to another episode of the Syndication School series, a free resource focused on the how-to’s of apartment syndication. As always, I’m your host, Theo Hicks.
Each week, every Wednesday and Thursday, we air two podcast episodes on the Best Real Estate Investing Advice Ever Show, that’s focused on a specific aspect of the apartment syndication investment strategy. For the majority of these episodes, which are typically a part of a larger series, we’ll offer a free document for you to download for free. These could be an Excel template calculator, a PowerPoint presentation, a PDF how-to guide, things like that that accompany the series, that you can download for free. All of those free documents, as well as the past Syndication School series, can be found at SyndicationSchool.com.
This episode is going to be about how to find the owner of an LLC. So it’s entitled “How to send your direct mailing campaign to the owner of an LLC.”
A great way to find deals that are off market, especially if you’re in a hot market, a very competitive market, where you’ve got a lot of different investors and operators who are looking at the on market deals, the bidding price goes up and up, because there’s a lot of offers, and you ultimately have problems and issues and challenges finding deals that make financial sense, that allow you to hit your return goals that you and your investors want. So one way to get around this is to think about some off market lead generation strategies.
One powerful strategy is to reach out to owners of the property. The most popular way to do this would be the direct mailing campaign, but you would also technically cold-call them; depending on what market you live in, you could door-knock, if they happen to live in the multifamily property. I interviewed a guy that invests in Boston, and that is very common, where you’ll find an 8-unit, a 12-unit, and it’s a family-owned multifamily home, and the owners live in one of the units, so you could technically just door-knock and talk to them. But either way, this is gonna be more for cold-calling and for direct-mailing.
So for direct-mailing, for cold-calling, you’ll basically build a list based on your investment criteria, you create a marketing piece, and then you mail this marketing piece directly to the owner, or you’ve got a script that you use when you’re calling the owners.
Now, in order for this to be a successful marketing strategy – and it’s also part of the name, “direct mail” – you need to make sure that you are getting in contact directly with the owner. So if you’re calling someone, you wanna talk to the owner. If you’re sending a mailer, you want to send your mailer to the actual owner’s home, where they live.
Something that you’ll come across – or you’ve already come across if you’ve created a list, and especially if you’re dealing with larger apartments, but you’ll still find this for fourplexes and eightplexes, things like that, is that the owner of record is an LLC. So ABC LLC, or the address of the property LLC. And then typically, below that you’ll see an address that’s going to be a PO box. If that’s the case, then there’s gonna be an extra step required for those parcels, so that you’re sending the mailer directly to the owner of the LLC. Because if you were to send your direct mailing campaign to the address listed for the LLC, you are 100% reducing your response rate… Because most likely, the address is gonna be a PO box that the owner may or may not check every day, every week, every month. It may be something they check on a monthly basis or a quarterly basis, or they may just set it up just so they could create the LLC, and they don’t wanna list their home address, and they never check it for mail.
So you need to find the home address of the LLC’s owner, and we’re gonna talk about the eight-step process to do that today on the episode.
Step one is you need to determine which state the LLC is located in. I’d probably say the majority of the time – I’m not gonna give a specific number, but the majority of the time – the state that the property is in is a state that the LLC is located in. However, that’s not always the case. For example, I think Joe’s LLC might be in Wyoming, or some North-Western state. I can’t remember exactly which one it was. I think it’s Wyoming. So if you were to wanna send a direct mailer to Joe, and you were looking for the address, and you wanted to buy a property that he had in Dallas, you need to make sure that his LLC is not actually in Texas, but is in Wyoming. And you’ll understand why in this next step. So step one, figure out what state the LLC is located in.
Step two is once you’ve determined which state the LLC is located in, go to that state’s Secretary of State website, or they might call that Department of State website – if you just google “secretary of state” and then the state name, it should come up. It might be named differently… And then step three is once you’ve located that website, you want to locate the business search page. It might be called “The Entity Search Page”, “The LLC Search Page”, “The Corporations Search Page”, but there should be some page that allows you to search all of the different limited liability corporations in that state. Once you’ve found that, step four is to use the search function to search for the LLC name. So again, this is why it’s important to know what state you’re in. Because if you’re looking up Joe’s LLC and his property is in Texas, then you’re looking through the Texas Secretary of State website, Joe’s LLC is not gonna come up, because it’s in a different state.
So step four, again, use a search function to search for the LLC. Type in just the exact LLC name into the search function, and hit enter.
Now, if the LLC is indeed located in that state, then the name will appear in the search results. If the LLC is not located in that state, then the name will not appear in the search results, in which case you will need to go back and locate that correct state.
The easiest way to locate what state the LLC is located in is to just search the LLC name in Google. Typically, if you search any LLC name in Google, it will actually most likely bring you to its page on that respective state’s Secretary of State website.
Step six is going to be to click on the LLC name in the search results. Step seven – at this point, depending on the website, the contact information of the LLC owners, so the owner’s name and their address will be presented. If it’s not presented, then you’ll need to locate the articles of organization.
When someone is setting up an LLC, one of the forms they need to fill out is the articles of organization, and they have to put their name and their contact information in that form. So if you look at that form, you’ll find their name and their contact information.
Step eight is to download the articles of organization to determine what their name and address is. Now, generally this is gonna be free for you to do. Sometimes it’ll be presented right away, other times you have to download the articles of organization, which is free… However, there are some states where there’s a fee to view the articles of organization.
So regardless of which way you are able to download and get access to the articles of organization, you’re going to have access to the owner’s name and the owner’s address.
Now, unfortunately, if you have a list of 1,000 different apartments that you wanna mail to, and the majority of those are LLCs, then you’re gonna have to do this process 500, 600, 700 times. Each time it’s probably gonna take you 10 minutes, so we’re looking at 5,000+ minutes of work, which is about 83 hours of work… Which is something you probably don’t wanna do. So kind of a shortcut – and you might have used this service to create your list in the first place – is to use a service like Upwork.
If you go to Upwork, there are plenty of people out there who are web scrapers, or who are specialized in pulling these types of lists… And they probably have a way that allows them to find the names of the owner of the LLC and their account information a lot faster than the 80+ hours it would take you to do it.
So I recommend that if you have more than 50 different LLCs that you need to determine the owner’s name and their address, I would go ahead and post a job to Upwork and pay someone to do that for you.
Sometimes there might be some sort of service on the appraisal or auditor site that allows you to do that, but at the end of the day, the outcome of this is to get the name and get the mailing address of the individual who owns the LLC. If you do that, you are guaranteed to maximize your response rate, and then as long as you have the right marketing piece, maximize your conversion rate.
Now, we’ve done a Syndication School episode on direct mailing campaigns before, so make sure you check that out at SyndicationSchool.com. That’s not the focus of this episode. The focus of this episode was to teach you how to send your direct mailing campaign directly to the owner of the LLC.
That concludes this episode. It was a short one, I know, but this is important information that you need to know, because at the end of the way, if you’re in a hot market – and the market is very hot right now – you’re gonna need to do more than just look at deals that are coming into your inbox, that are listed on the market… And one of those things is doing a direct mailing campaign. And if you want a successful direct mailing campaign, you cannot send your mailer to the PO box of an LLC. You need to find the owner. It’s gonna take some time, it might cost a little bit extra, but again, you’re talking about deals. If one deal results from your direct marketing efforts, then it’s going to more than pay for any expense that you paid in order to create this campaign.
In the meantime, to listen to other Syndication School series about the how-to’s of apartment syndications and to download all of the free documents we have available, make sure you visit SyndicationSchool.com.
Thank you for listening, and we will talk to you soon.
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