Checking this out. Looking forward to content to come! Thanks.
I’m currently looking for Multifamily in Houston, TX. Do you recommend I use IRR to find good areas in Houston?
IRR reports does not give submarket information. The best way to analyze sub markets is by looking for median household income in each submarket and compare that to the average apartment rents in that area. You will start to see pockets of opportunity . Of course make sure you don’t buy in the hood or high crime rate areas.
Let me address the title of the post. How do one find off market multifamily properties. A few ways
- Building relationship with Listing Brokers. Once you have a good relationship and you have establish as credible buyer (ability to close smoothly), then you can hope for some pocket listings. Keep in mind, not all off market properties given by the Broker are great deals. 90% of off market listings brought you by Brokers are actually “on market” to qualified buyers in their VIP list. So don’t get too excited about off-market deals by Broker’s unless you are the only or the first one or exclusive to be told about the deal.
- Establishing relationship with sellers - This can be done by direct marketing effort. It’s a lot of work, least efficient method but the best way to get better deals in this hot market. Even in this case, 90% of the leads that you get from sellers are overpriced. I do believe for newbies, these are the best way to get started as most brokers would not entertain newbies.
Hi James - what’s the best source of household income for a submarket? Also, for average rents - should i look at Apartments.com, or also use data (eg. rent surveys) from existing MF listings from CRE sites like Berkadia etc?
Best free tool to get median household income is https://www.census.gov/
If you get access to Co star, Yardi etc, you can get the same data or may be better as well, however its paid.
The Brokers do provide the same data in their OMs.
Do you have a video about this topic?
Thanks James - i do look at this data in Broker’s OMs, but would love to double check. Thanks for the pointer to cencus data!
What’s the most reliable way to look at average apartment rents in the submarket (i guess one data point is brokers OMs, but i don’t think you can 100% rely on their data).
Apart from Brokers data, a buyer need to do their own due diligence for rents comps. Go to apartments,com, select a few properties within 1-2 miles of subject, start calling the property and ask for the different type of rents for each config. Ask more details whether anything included in the rents (like cable…) . These is what paid sites like Co-star, Yardi , ALN data do everyday. Co Star has a bit more advantage as they have apartments.com site. Even that, i have seen many times the rents comps are wrong from these paid sites. Even if you have paid subscription, I would still recommending call the comps directly just before going under contract. Once you are under contract, you need to visit these comps and check it out yourself. The OM data is the least accurate data.
Sorry no. Census site is pretty easy to navigate.