If you are looking to buy multifamily properties, at some point you will need to call the broker and schedule a property tour. What happens on a tour and what questions should you be prepared for.
Questions Regarding Property Tours
When should you set up a property tour?
What’s involved on the tour?
What questions should I ask?
What questions will the broker ask?
My answers to these questions are a little different based on who’s asking me.
I’ve been asked “What would you do differently knowing what you know now?”
The answer to this question is “I would go on more property tours sooner.”
Property Tour Goals
The property tour accomplishes two goals;
Builds relationship – the first time you go on a property tour with a particular broker, it’s an opportunity for the broker to assess you as a Buyer. The broker is looking to see if you are someone they would like to do business with and assess whether they think you are qualified and capable to close on this size transaction. It is also a time for you as a Buyer to assess whether you would like to do business with this broker. It’s a two way street.
Qualify This Transaction – the Buyer will determine whether this is a property to spend more time on and whether he/she wants to work towards putting in an offer. The broker will be qualifying buyers to see who’s serious about this deal and who’s capable of closing on this deal.
Tell People What You Do
I’ve been to many conferences, both real estate and entrepreneurial conferences. I’ve heard over and over again “people can not do business with you if they do not know who you are and what you do!”
There is a balance between getting your name out there and not wasting people’s time and losing credibility.
I took the approach that I would only go on property tours if I had underwritten the deal and I felt like I had a good chance of putting in a competitive offer. This helped me maintain credibility because I was serious about the deal and knew a lot about the deal. The downside was many brokers did not know me and did not know what type of deals I was looking for until I had my first property tour with them.
My advice to a new syndicator looking to break into the market as quickly and efficiently as possible would be to plan out the next two months meetings. Identify the top 8 broker companies in your market. Schedule a property tour with a broker from each of the eight companies over the next eight weeks. This will give you exposure to eight different broker firms and begin the relationship building with each of the firms. The first time you go on a property tour with a broker you will not be wasting their time because they want to tell the Seller that they had many property tours, offers, etc to show they did a great job marketing the deal. In addition and more importantly it gives both you and the broker a chance to get to know one another and understand what deals are a good fit for you.
Once you develop a relationship, I would limit the property tours to deals you have serious interest in and those the broker thinks may be a good fit for you.
Learn & Look For Opportunities
Property tours typically last 30-60 minutes. The broker will walk you around the property while you are discussing the deal. Ask the broker what he/she likes about the deal and where he/she sees the value for a new buyer. Even if you do not proceed with an offer, many times you can learn something that may help you with another deal. For example, on one property tour, the broker showed me a unit that was being used as a storage shed. He felt like the items in the unit could be placed in another area of the property which would open that unit to be rented. Now, every property I walk, I look for empty buildings or units that could possibly come online and be rented.
The broker will ask you about your team. Who will you be using for property management, financing, legal, etc. How will you raise the capital? Be prepared to answer these questions. You can piggy back off the success of your partners.
Why do I share this story with you?
Fear can prevent you from taking action. The more property tours you go on, the more comfortable you will get.
If you’ve listened to the podcast and get value from it, please subscribe and provide us with a five star review on Apple Podcasts. It’s FREE and will take like 30 seconds. Click the link below, hit the SUBSCRIBE button then scroll down and select 5 stars (the fifth star furthest to the right). That’s it!
If you’ve already provided us with a five star review, then thank you and please share the show with a friend!