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  • Steven Fletcher

Shaking Trees

One of the first things we do in a market is create our buy list. This is a compiled spreadsheet with every property in our target neighborhood(s) that fits our criteria and includes details on the ownership, their entry price, where the entity is domiciled, permit records, etc. This is a process we carry out while working extensively with brokers in the area- we share these lists with our brokers to see if there's any personal relationships/angles.


Without taking an initiative, we’re playing a waiting game on the MLS and ultimately sitting on our hands until that needle in the haystack comes through. Would much prefer to open myself up to as many interactions as possible and see where those lead.


For us- these properties need to be sub-institutional apartment buildings, located in supply constrained (whether that’s geography, historic districts, arduous permitting landscapes, etc.) markets.


Once we have our generalized list, we dig a little deeper. Is there a single owner or entity with multiple properties? What's the background behind the ownership? Are there any generational owners? What did they initially pay for the property? What’s the scope of the work that is needed (we can execute strategies ranging from core to value add so our range is wider here)? Based on their other projects, are they potentially looking to move assets off their balance sheet?


Typically, you’ll have the most room to wiggle with generational ownership groups/people who have owned the asset for many many years. They often don’t need to exit at a certain price per sq. ft (they’re walking away happy regardless) and don’t optimize operations (self manage, can be late to make repairs, don’t have necessary cap ex budgets, etc). These are all angles to add value.


From here, find ways to get in contact with them (the shaking trees part-leverage your broker(s) as needed). No need to be too direct, you’re just contacting a fellow property owner in your neighborhood.


Point the conversation to them then tell them about yourself, your company (we buy cool apartment buildings in cool areas and steward them well over the course of many years), and your other developments in the area. From here, we have a sense of familiarity and they know you can operate in this market.


Depending on the context (sometimes it’s fine to say on the first call, other times it’s better to wait for the next interaction- feel it out), indicate that you’d interested in buying the property should they ever consider selling.


The response may be, "Absolutely not. But, my friend Jimmy is looking to sell some portions of his portfolio" or "Not looking to sell, but I do operate my own roofing company should you ever need estimates." You never know where the conversation will take you.


From here, it’s a game of back and forth but at least you’re in the door and in conversation with somebody who is likely very interesting and successful.

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