How To Find Off Market Commercial Deals

📈 How to Get Off-Market Commercial Real Estate Deals (Even If You're Brand New)
LoopNet and Crexi?
🚫 That’s where deals go to die.

In this final episode of the Go Big Live Podcast, I’m exposing the truth about how commercial brokers really work — and exactly how to get access to off-market deal flow before the rest of the world even knows a property is for sale.

You’ll learn:

✅ Why brokers never list their best deals publicly
✅ How to earn your way onto their A/B/C lists
✅ The 4 questions that instantly destroy your credibility (and what to say instead)
✅ My B.A.N.D. Method to stand out and stay top-of-mind with brokers
✅ A real case study: How my client Brian landed a 56-unit deal and added $1.8M to his net worth
✅ How to avoid the rookie mistake that burns most new investors

🔥 This isn’t theory — it’s the exact process I use and teach to help residential investors break into bigger commercial deals and start replacing their income in 24 months or less.

Transcript

0:01

Yo, what is up everybody? My name is Matt Drouin, and I am the host of the Go Big Live Real Estate Investors podcast. I'm sad to tell you, I've been prepping for this for a while. This is the last show of the podcast series, episode 100. So I'll no longer be recording a podcast and distributed out to your Apple, Spotify, all that sort of stuff. I'm gonna be here, right here on YouTube, releasing content consistently, but not as consistent as I've been doing on a weekly, or sometimes twice a weekly basis. I'm only gonna come on here and share with you when I have something new and insightful, educational, entertainment, whatever. So in this show we're gonna cover deal flow. now don't get it twisted folks. The banking relationship, infrastructure, the OPM infrastructure, your clarity on what type of asset you're gonna pursue, all that stuff comes first. So if you haven't listened those episodes, make sure go to YouTube, listen back on those ones, and implement those actionable tips and game plan that I articulated in those shows, because if you try to go after the deal first I'm gonna tell you right now, you are going to be up Schitt's Creek without a paddle. The deal can come at any point in time, land in your lap, all the other stuff takes time. But this is relationship value and infrastructure. You have to build first before you get into making offers on properties.'cause if you do not take those steps to build out that infrastructure and you start making offers on properties, you will get one under contract. It may or may not be a deal, but you're not gonna be able to put the deal together and you're gonna burn a bunch of credibility in the process. So deal flow. If you're still looking on LoopNet and correct C for deals, you are shopping in the trash bin for commercial income property. Okay? Here's the biggest myth, right? As a residential real estate agent, this is what I started my career back in 2006. I've been a real estate investor for 19 years. When I got a listing agreement signed, I would put that thing in the MLS, I'd blast out to everybody and the whole world would see it, right? That was my job, was to get as much marketing exposure as humanly possible. Brokers, commercial brokers do not operate that way. Contrary to popular belief, brokers don't actually do a lot of sales. They don't do a high volume of sales. Most of their income is made up through leasing commissions. They may do three to four sales per year, so they actually very obsessive. Over the control of the outcome of the transaction. Okay, so they're risk adverse in who they get deals under contract with. Because with residential, if you get a deal under a contract and it falls through, for instance, the buyer can't get their financing or whatever, then I. You can usually find a buyer for that that property. If a deal falls outta contract with a buyer from who knows how, who knows the hell where? And the broker doesn't know that buyer doesn't know their reputation or their ability to perform, and they, that deal goes sideways. That could be 20 to 25% of their income lost, vanished for the entire year. Okay, so in this episode my core promise is that I'm going to. Help you learn how to get on commercial brokers, a, b, and C list and get access to real off market deal flow. Now this takes some time, alright? This is not going to happen overnight. If you contact a bunch of brokers out there and say, Hey, do you have any off market deals coming up? You have not put the steps in that I'm gonna detail in this episode on what you need to do to actually get on those lists, for instance. Okay? So I'm gonna show you. A method to stand out with brokers. Okay, another one. I'm also going to highlight the three or four different questions to not ask a broker, which a lot of Ns ask that actually ends up burning their credibility and destroying their credibility before they even get started. And then you're gonna learn how one of my clients actually added a$1.8 million to his net worth through using this strategy. I'm gonna detail in this episode alone. And also a a couple of tricks that I've used and I teach my clients to use. That primes their off market deal flow and once they get that freight train going, it is very difficult to stop. This is the reason and why I believe in the law of the first deal is the hardest may actually pay you the least of the amount of deals you do in your track record going forward. But once you get that freight train going at that. Second, third, fourth, and deal. Fifth deal happens at rapid succession, and that's the reason why you wanna put in the work right now, to build out that OPM or other people's money infrastructure, and also the banking and lending relationships and all the knowledge you need to know so you can actually be decisive and pull the trigger when the time comes. Okay, so I'm going to detail the band method. Okay? This stands for Broker Alignment Asset Clarity. Network leverage and deal visibility. Alright, so let's start with broker alignment. And like I detailed you before, think like a broker, risk management and time efficiency. A lot of times in terms of the order of operations is how brokers, when they get a listing agreement signed, first they're gonna call their A list. All right? These are people they've already done a deal with. They know like, and trust them and know that they have the ability to close. Their typical methodology, a lot of times when brokers get a listing agreement signed is to go one by one down through their list on their A list, B list, C list, because the one thing is that they do not want to have 20 different people that they're talking to about this particular opportunity because they can lose control very quickly. So they're gonna, actually, a lot of them are going, and I get these calls all the time. I get calls from a broker that, Hey I just wanna let you know I got this deal I'm bringing to market in a few weeks. If you want to take a crack at it, you can edit. You're the, you're the second person I've called on this. The B list might be. People just like you that they know like, and trust. You've put in that work to build that relationship with them, but they haven't done a deal with yet. Then their C list after they exhaust A and B is other brokers that are in their network that you know, that, hey, I'm offering at a co-op, a cooperating brokerage commission. I bring this deal to market in a few weeks. Do you have any buyers for it? Before I get into the nitty gritty on what to say, I'm going to go into what not to say. All right. This is what I call broker repellent. First question I get,'cause I used to be a commercial real estate broker. What's the cap rate on the deal? Okay, total nube question. Just don't ask it. Cap rate is very relative. And there's two different types of cap rates. There's a cap rate for a particular deal, and then there's also the market cap rate. And to be honest with you, most brokers don't even know what the heck the cap rate is on the deal. They're marketing anyways because they put together the financials. They're typically not very versed on the financial analysis, financial modeling, T bars, D SCRs. All that stuff. So just asking that is going to, just to raise red flags that this is a person that, listen to, a a 15 minute YouTube video and they don't know what they're talking about. Okay, click. Why are they selling? I used to get this one all the time. Why are they selling? A lot of times you get residential real estate investors. This is the number one question they ask is they want to like. Pull out alright, are they desperate to sell? Typically that is a new question. Just don't even ask it. I'm not even gonna go into why, but this is a lot of things that residential investors ask these types of questions to commercial brokers, therefore destroying their cred credibility before they even get started. Okay. Will they hold paper? Okay. You hear a lot of about creative financing, and I'm gonna go into later in this episode as to how to present if there's any type of appetite for creativity in the deal. But will they hold paper? Not only tells the broker that you're new, but also tells them that you're broke as well. Alright. And then the fourth broker repellent is asking for the offering memorandum, asking for all the offering documents, the financials, the profit loss, the rent roll, the trailing 12 or T 12, and then ghosting the broker. I hated this when I was a broker selling investment property. I go to all this extent of, getting them to sign a non-disclosure agreement or confidentiality agreement, an NDA or ca, to use the acronyms in the industry. And then, the buyer would just basically get the information. I had no idea what the hell happened to'em, whether they got hit by a bus or whatever we used to call them. Casper, the ghosts, right? Or Caspers. So here's some questions to start off the conversation when you're finding an opportunity, let's say on Crexi or LoopNet. I'm gonna go into further detail later on as to how you can use these tools. They're probably not going to be the avenue of finding deals, but they can at least allow you to identify possible brokers that specialize in the type of asset class you want to do. So number one question. What's the story on the deal? When you ask this question to a broker, they'll know exactly what you mean when you ask this, right? And they're gonna give you all of the information you're probably looking for without asking these new questions that I told you not to ask. They're gonna tell you, when they bought the property, when the seller brought the property, what they did to it, what they're looking to transition into outta this asset. Even some possible motivations. So this is something that the broker actually rehearses and prepares when they talk to possible buyers on a deal. Okay? And they can even actually inform you as to maybe there might be some appetite for creativity on that, but more on that later. Secondly, you're gonna see a lot when you're going on, either getting emailed off market opportunities by brokers or going to Crexi LoopNet properties without a price. Okay? And ask this question whether there's a price or not. I always ask the broker, what's the pricing guidance? And even if it has a price, for instance, a lot of the brokers will say we listed it pretty aggressively at 2.5, but, between you, me and a fence post, I think the, the seller would entertain an offer anywhere, with a two in front of it. Okay. Just allowing this open-ended question to really open up the dialogue and get further intel on the actual deal itself. Okay. So do this instead. Be decisive, clear and responsive. So when the broker gives you their offering materials over underwrite the deal, okay? Figure out whether it works or not, whether it's your cup of tea, and then give them feedback even with the actual analysis you did on the property and what your objectives are. just think about it, right? If you go to an elevator, for instance, and you press the button and an elevator doesn't come I have a building that actually has two elevators, right? So I have two different buttons to press. I'm always gonna press the one that I know has a quicker response. This is a way systematically over time to get further and further up on that list, right? Because if a broker contacts you or sends you information and you quickly re provide response and feedback to them, then they're more apt to keep you top of mind because you're not going to ghost them. You're gonna be quick and decisive in getting back to them. And then also just give feedback on passes. Tell them exactly why the deal doesn't work, whether it's location, whether it's the property type, whether it's the, the unit size. It might be too small. A lot of, clients of mine they get deals sent by brokers of just too small. Okay. And then when you do actually get a property under contract. Then please follow through on it. No re-trading. A lot of people that are in this industry, they're like, they just wanna get a property locked up, get the seller pregnant, so to speak. And then with the idea that, all right, I'm just gonna, I'm gonna go through due diligence. I'm just gonna re-trade them at some point in time. That may win you one deal. Okay? Might, but that broker's gonna remember that, right? A lot of times when a broker brings a buyer and gets a deal under contract, that broker really needs to. Vouch for you as the buyer. If you get the reputation as a RET trader, then you are going to significantly hinder yourself when you're looking to scale.'cause your first larger deal is not going to be the end all, be all right. You're not gonna be buying one deal and then, retiring and, sipping my ize on a beach someplace. Okay? This is gonna take several deals within which to acquire within which to achieve your big, hairy financial goals. So a asset clarity. So being clear on what you're looking for. No vague buy boxes. I buy anything anywhere, any point in time that is completely forgettable that's too vacuous for somebody to actually remember. So be hyper specific and don't be afraid to be hyper specific. I buy 10 to 30 unit pitch roof brick apartment buildings in a South wedge neighborhood. Now, I've covered this before, but I want to harp on it again. You may think that if I'm too specific, then I'm gonna pigeonhole myself in a particular asset class. And if something doesn't meet that asset class or that very strict criteria, I'm not gonna get anything. You're gonna get more deals out of it. I'm gonna go into an example in a little bit. As to how one of my clients, Rob Jones, was very specific. he wanted medical office buildings on the east side of the city of Rochester. Medical office building in between 10 to 30,000 square feet. And he had this rehearsed When anybody asked him what he was looking for, he had this recited over and over again. After doing this for six months, he got a call from an investor and said, Hey, listen, there's a deal that's on the west side. It is not technically a medical office building, but it is a it's a pseudo medical office building. It has wellness businesses, therapists, acupuncturists, all that stuff, so just because you are hyper-specific under criteria. This is what activates the reticular activation system in people's minds when you're hyper-specific so that they can think of you when they have off market deals. Whether this is other investors or real estate brokers, all right, so these are the four things you're gonna want to communicate to the actual broker or other investors that are in your network, right? Price range and all these things that I'm gonna list here. These four things are gonna want to be in alignment with reality in whatever market you are targeting. Okay? So these can be price range, what cap rate you're looking to. Target in terms of entry cap rate. This should be in alignment in terms of range with the market. So if you're looking into the, desirable area of Brooklyn and you're telling brokers and investors, you're looking for a an eight cap deal, they're gonna look at you like you have three heads and they're gonna discount you as a new and you don't know what you're talking about. Alright, so cap rate asset class, being very specific about the asset class, it's okay to, if you're targeting mixed use properties, I'm looking for apartments, unit size, square footage range. Remember, being specific in these details is not going to shoot yourself in the foot. The answer that drives me absolutely nuts is I'm looking for nothing's too big, right? Nothing's too small. Remember, don't be vague on these things. Financing ready. And this is the great thing about working with a local community bank or having a relationship with a few different community banks, is that when you can reference that, hey, yeah, I've been talking to Jason Tory at Canada Egu National Bank. I've been talking to Alan Tody at Family First Federal Credit Union. I've been talking to Michael Sternick at ESL, for instance. Whenever community you're investing in, you are in a small community. If you're in a secondary, tertiary market, these brokers are generally going to know who these people are. So communicating that you're actually financing ready as well some bonus stuff that you can actually do is. Having a one page criteria doc or a landing page in your website and then just having a simple one pager of this criteria that you're doing. So you have an have a reference point and you can change it over time as you're applying the stuff out in the real world changing your criteria. Okay? This makes you memorable. And also referable, remember, we buy. Historic adaptive reuse properties in Rochester, New York. Pretty brick buildings. Okay, that is associated inextricably with our identity. So N is part of the Band Method network leverage. Okay? This is your secret weapon. It is relationships. The reason why a lot of people give up when they start to. Put work into landing their first commercial income property deal is because this is, driven by a lot of low tech stuff, and that low tech stuff is relationships. Now you can augment those efforts with technology, but it is really going to be belly to belly. So getting to know the bankers that service the type of asset classes in your industry. We covered that in the previous episode. Other investors, for instance you should be going to real estate investors meetups, industry trade events, getting yourself out there, getting belly to belly, to the players in the marketplace. Now, you may not make a deal at an event. You may not even make a connection that is going to yield an instantaneous. Demonstrable direct result in terms of landing a deal or whatever from an event, but just being visible there, okay? You connect with these people on social media, for instance, LinkedIn, Facebook, Instagram, whatever. They see you in an event. They, they get emails from you once in a while. You get to, you go out to lunch with'em or coffee or whatever. This all works to build this ecosystem, your ecosystem that you can leverage. Getting to know property managers, CPAs, lawyers, all of these people that are in this network, and believe me, this commercial real estate businesses, super niche. There's not a ton of people that are in it, in your market or your target market. All right, so getting intros to brokers, you can say Matt, I don't know, a single commercial real estate broker. I dropped the note in my Facebook residential real estate investors group. I heard crickets when I asked for, a introduction to commercial real estate broker. I'm gonna go right into my methodology that you can use right now today to find out who the brokers are that service your asset class in your market.

Matthew Drouin-2: 16:48

Okay, here we are. You're gonna say oh my God, Matt, I'm gonna kill you because you're directing me to the trash bin of commercial real estate. Bear with me for a second here. So if you're straight out, like straight up, just like cold. Not dealing with any contacts, you're completely disconnected from the commercial real estate community. You can start with these two websites to find out where the actual active brokers are and your particular focus area. You can set up filters when it comes to LoopNet, Andrey, and right here, I'm gonna go onto the filters. You can filter this by types of multifamily apartments. Minimum square footage size, maximum square footage size. We could go from, let's say 10,000 square feet if we're, assume that we're gonna target at least a 10 unit apartment building, for instance. And just clean that up there. Okay? So here we go. So now we can actually start to see where these assets are and the brokers that represent them. So we can go into this at 2,600 Dewey Avenue Willow Garden's apartment, and we can see that this guy, mark Palazzo, there's actually a friend of mine, I've actually hired Mark to sell deals for me, and you can start to contact these brokers. Alright. None of this stuff that you see on LoopNet or xi, for instance, is probably going to match your buy box. That is okay. You're just trying to find the players in the space that might have this type of product in the future off market before they bring it to market. So the methodology here is. Being clear and straight up upfront. Remember to call these brokers. Do not, do this whole message thing. I get hundreds of these every time. Actually I used to when I was a commercial real estate broker and I just ignore them. Alright? These are dreamers that are, these like. Whatever a 20-year-old pimple faced software programmer out of LA or the San Francisco Bay area, that I know, they're just gonna waste an enormous amount of my time. So do the low tech thing. Call the actual broker. Alright, introduce yourself. Hey, I saw this property and Willow Gardens. It's probably not my cup of tea. I was wondering if you could send me information on it. I'd like to, at least analyze it and see if it might be of interest to us. Okay. Just inserting that caveat there, that, this may not be my cup of tea, it, it might, I'm gonna try to make it work. Okay. So just doing this by showing the broker that, you know, what you're talking about through actually being able to Android the property, giving them feedback. And then presenting them like, Hey, listen, I'm not looking for a whatever. I'm not looking in Greece, New York. I'm not looking for an asset that's of this age. I'm looking for something a little bit newer. I'm looking between this price range and this price range. Remember, make sure you're actually educated on what's realistic for your marketplace and asking them quite, point blank. Do you have anything that might be in the pipeline that you're bringing to market that might fit my criteria? And if they say no, and they usually do say no. You're usually catching'em on the fly. They're driving around the car. They may be, changing their kids' diaper for all, you know. They're not gonna be thinking of this here. Now I do not stop there. I say, listen it sounds like you specialize in the product type that I'm looking to acquire in. Would you be open to getting lunch or coffee the next couple weeks? All right. And then usually most brokers love to get free lunch or coffee. And being able to set up a face-to-face, belly to belly meeting with them and just filling out your calendar and let's take a look here. We have a ton of product here we have 26 results that's right here, right? Just in this metro alone. This is the city of Rochester. This is not even the greater Rochester area. We can go down in here and go line by line and just actually just fill up your calendar with these broker contacts. Now, one thing that you're gonna want to be aware of is that some brokers cooperate and some don't. Myself, as a commercial real estate broker, I never wanted to represent buyers. And I would even, skip out on commission by representing buyers because I just didn't want to deal with it. I didn't like having those two layers of communication. So if it wasn't my listing, then I wasn't going to, be involved with a transaction. Because I had that control. So there's two kind of different breeds of brokers. But one thing that I would never do is that you may have a broker that will ask you to sign an exclusive buyer's representation agreement. And I never sign those. Okay? This will lock you up for six months to a year. And whatever you buy, whether it's direct to seller from another investor. Through this broker or another broker that may not be offering a co-op. This broker is entitled to compensation. You may have brokers that are adamant about this. I would just say pass on it because one thing I can definitely say is that no broker is going to do the same amount of work on your own behalf that you will do for yourself. So you do not want to go out there, be busting your butt, networking with other investors, other brokers, walking properties and being tied into a broker that really isn't doing anything for you, besides sending you stuff off of LoopNet and Xi, for instance, or the MLS. And then, you end up having to compensate them for that. I wouldn't expect that as a commercial real estate broker, I never did. So you don't have to expect it for yourself. So just using this methodology here, and this is gonna take you some time. And these initial meetings are not gonna be the end all, be all. This is the start of a relationship and relationships take time and relationships move at the speed of trust. So just using this, filling up your calendar, and this is how you can actually start to build a network of brokers, clearly communicating to them your asset clarity, for instance, your broker alignment. And so you can start to build that and scale it over time.

22:12

Okay, so now that you have put the work in and getting to meet face-to-face, all the brokers that specialize in, even in loosely across the asset classes that you're going to be focused on in your target area or areas, here's where the additional follow-up work goes into. So after the intros, you're gonna go to real estate investor events, industry trade association events, anything you could possibly do to be seen in that marketplace. Now, this is a slow burn. This takes several years of implementation. But if you're looking to scale exponentially, what is gonna make your job much easier is doing this work upfront. Because if you just start showing up when you actually need connections and referrals and all that sort of thing, it's gonna be too late. So here's how to stay top of mind, just one meeting with a broker is not going to change anything. Just one mention to a fellow investor in terms of the asset class you're looking for is not gonna be enough. So you're going to wanna stay top of mind. And these are the three things that I do to do that. Alright, whenever I'm driving around or, when I time block for myself each week, a couple hours a week is just my reach outs, right? And these are just best friend conversations. And I start a phone call with this, Hey, I thought about you the other day, right? Did I actually think about you? Maybe I didn't. But these are the beautiful words that people hear that tell them that, oh. Somebody was thinking about me, Matt was thinking about me. I am seen, all right, I matter. And then I just open up with, Hey, I just looked in the, roster business journal. I saw that hotel traded for,$1.3 million the other day. Isn't that crazy? This is talking shop about what's going on in your marketplace. This is the reason why. I subscribe to local trade journals and I stay really plugged in on what's going on in the market. Spilling the tea, for instance, because you can actually add value through that. And I always approach a conversation through wanting to add value. For instance, I. There's a property owner that I've been looking actually to buy property from for quite some time. I saw that his zoning variance approval application got denied for a tenant for coffee shop he was trying to place in one of his spaces. I happened to have a meeting with some city council members and some city officials talking about the zoning alignment project in Rochester. Wanted to get his opinions of that, why that failed, how we can make our zoning policy better and more effective in the city to create, vibrant city neighborhoods and so on and so forth so all these things that you can think about is like, how can I actually add value to this person through either spilling the tea, some sort of market intelligence any of that type of stuff where, I just found this new tool the other day. That was that was super helpful. Whatever it may be, so that market commentary sending comps over to them. What do you think any of that sort of like best friends conversation with if you have common interests you've identified in that first initial meeting. Just building upon that, this broker, you and him may have a passion for breeding snakes. I don't care. There's some sort of common ground that you can actually find with that initial conversation. Just build upon that over time. And then this is the thing is the reason why you wanna do this, even though you might think that it's oh my gosh, this is fruitless. Like they don't have deals, I'm calling them. I'm not getting anything out of this. Is that you do not let brokers forget about you because I have a funny story that happened just recently. I had a client bring an off market opportunity to me, all right, in Rochester, New York. This deal was exactly the type of deal we would buy as a company. And also it happened to be with a broker. I've actually bought deals from, I didn't do a good enough job at staying top of mind with that broker for them to send me the deal first, right? And I don't have any resentments around that. My client's gonna get a fantastic opportunity out of it, but it just goes to show that you cannot just sleep on this and not talk to somebody for months at a time and then expect that they're gonna think of you. Life happens. Business owners, especially self-employed individuals such as real estate brokers are very disorganized. They don't have some sort of, super fancy artificial intelligence automated customer relationship management system. They're really just flying by the seat of their pants, just exactly like I did as a broker myself. So D, the last part of the band method is deal visibility. Okay. The goal of this whole thing is to see deals before the entire world does. Now, you may not be the first phone call, but even being the second, third, fourth or fifth is just absolutely fine because there's other buyers out there. That buy stuff exactly the way you know what you wanna do, but aren't always buying. They may be tied up in other projects. Right now we're tied up in a$25 million redevelopment project in downtown Rochester. We are not looking for deals, more deals that are heavy value add redevelopment deals. We may be buying some stabilized value add properties, but just know that the other, quote unquote competition in your marketplace is not always going to be in buying mode. The way to make to the A list, right? It takes time. Those are the trusted buyers who close with you never having closed a commercial income property. It's going to take you closing a deal first in order to get on broker's a list of geez, all right, this newcomer, this young buck. Is a closer. Okay. That is a badge of honor and this is the reason why my whole program that I work with clients on is how to land that first larger deal in the most seamless way possible. So they get to be known as a professional, a player that closes deals. The B list, like I said, is promising newbies or referrals. Referrals cannot be overstated as a source. Remember. Contacting brokers outta the cold off of Correct. And LoopNet is not the most ideal channel for this, right? All that work that you put into actually with networking with other investors and also bankers. For instance, if you ask your banker or your potential banker, Hey, I'm looking to buy this type of deal, X, Y, and Z, which brokers do you know that are active in this space? And then asking for a warm introduction to that person, referrals are gold because yet, relationship tension is greatly diminished when you actually have that. And then your C list is the, the buyers that are contacting brokers off of LoopNet, Andrey, for instance. Okay. Now not all brokers are going to be introduced to you by a lender or referral source, but those are still brokers that are active in that space. So you want to make sure to plant those seeds right now because as the saying goes the best time to plant a tree was 20 years ago. The next best time is today. And here is how to be the person that gets that first whisper of a property that is going to market, I am gonna give you four tips. All right. Number one, be the first to offer feedback. Be very decisive. You're gonna know right away do not waste that person's time with, oh let me analyze it. And that sort of thing. If you know for a fact like, all right, this isn't a war zone, it's a junk property, I'm just not interested. So being that first to offer that feedback based upon location, not my, not quite my cup of tea, that sort of thing. And then. Two is performing on smaller deals to earn bigger ones. Now the title of my show is Go Bigger, for instance, or Go Big. Your first bigger deal is not gonna be a hundred million dollar, thousand unit apartment complex. So your first larger deal might be a one to$5 million deal it might be a one to$2 million deal. So performing on those ones, right? Building that track, record that credibility in this incredibly opaque industry as a trusted player that is absolute gold for your scale in building a deal flow pipeline. And then when you're actually making offers on properties, I always do this, especially in this high interest rate environment when I'm going through the offer negotiation strategy. When I've trained my clients on how to financially model these projects they put it in our shared drive. We hop on a one-on-one, I shoot holes in their analysis. And then we talk about a offer negotiation strategy in a high interest rate environment. This is absolutely essential to getting deals done because. Your cash offer, which is, you getting bank financing and the seller gets a big pot of cash with interest rates in the mid sevens may not always get a response from the seller. However, if you can creatively structure a couple other solutions that might solve the seller's problem, for instance, with, wanting to dispose of this asset, but also getting them their price on your terms. You can offer two other different types of variables with that offer. So we have always talk about cash offer. That's the lowest offer that we're gonna have a second offer might be Hey, I'm gonna get most of your cash right.$2 million asking price. I'll give it to you. You're gonna get$1.5 million in cash, a closing. And then I need you to hold a$200,000 mortgage or a$300,000 mortgage at 0% interest for five years, no payments until I can actually execute a value add strategy on this property. Okay? And then the third offer might be at a even slightly higher price. That is a hundred percent seller financed. Okay. Now this seller might not have the equity to do so. I always propose it. The reason why the second seller carryback, is actually great, is because that seller can satisfy the mortgage they currently have strapped to that property and then get some cash and then also have a predictable stream of income afterwards or. They can get a windfall chunk of cash after you refinanced the property upon executing that value-ad strategy. Now that being said is that seller finance terms are typically shorter term than you would get with bank financing. Bank financing with the community banks is typically gonna be a 10 year term. Most sellers are not willing to do a 10 year term. So generally the deals my clients close on is that we're looking for deals that we can actually. Rapidly increase the value in less than five years, be able to refinance the property, pay all of our investors back, and also any seller carry in the process. So that offer optionality, for instance, is really what is working in this current environment. Because one thing is that when you submit one offer, it's take it or leave it. But if you offer. Two to three different types of scenarios. Then you start getting the creative juices flowing in the seller's mind and being like, okay, none of these actually work at face value, I like parts of this one and I like parts of this one. You have a higher probability of actually getting a response from the seller. Now, one caveat with this is that if you're in like steep competition with 10 other buyers, this even happens in off market deal space, you may not be able to be as, creative for instance. So if a property, the pricing guidance on Asana is a. Smoking hot deal, right? Just put your best foot forward and if the seller's desire is to get cash at closing, then you know, make sure to lead with that. You can always, after going to contract and getting the property, locked up, so to speak, you can always propose some creative solutions after that, during due diligence. Because now we're protected by contract on the property, and we can say, Hey, listen, we have a term sheet. We have solid financing lined up. But how about, how will we do this right? We'll bump the price up a little bit and you take back a small seller carry on the property. So that's one method that I've used and it's actually worked in the past too, because once the seller, sometimes the seller doesn't even talk to their CPA before they make the decision to list a property for sale. And then when we come in and say hey, listen, if you want to defer your capital gains taxes, here's a solution that we can provide. This is a property, this is, we plan on doing to it. We can get you paid your, your cash or whatever cash you want in less than five years. Talk to your CPA about it and see if that, might make sense to defer your capital gains tax. Okay? So that's something you can do in a slick trick that you can use in a competitive offer scenario. And then on making offers, for instance, using market intelligence to bring value to the broker, right? If you're doing your job and putting the work in effectively with. Talking to multiple brokers, making offers on deals, talking to investors, you can actually put yourself in a position to be of value to other brokers and actually know more market intelligence than actually brokers do. So this can actually bring a lot of value to those brokers. I've even on deals that I've found that were off market through other investors or through my own direct to seller prospecting, which we're not covering in this because I'm usually working and focusing with. Clients that are busy professionals either own a business or work a full-time job. Cold calling prospecting direct to seller for commercial income property deals takes a very long time. And here you are. Like I said before, you have hundreds of people in a given region that are dedicated and that make a sole living off of making transactions happening. So leveraging that, for instance, but leads that I get from other investors. On off market owners, for instance, and I'll tip it off to the broker if it's not my cup of tea, right? Hey, I looked at this 10 unit deal, not quite the location. It's an off market deal. You might have a client to client for it, so I can refer you for instance. So next we're gonna actually go into a specific case study of how a client of mine, Brian and I have actually his case study on my YouTube channel, the full thing on how he won a 56 unit deal using all of this methodology I laid out for you just now and brought it to its glorious conclusion. And this deal ended up adding$1.5 million to his net worth and about$200,000 a year in. Solid cash flow, so you're not gonna wanna miss that. I onboarded a client his name is Brian, about three years ago when I actually, originally launched this program. And he was a typical, tired, multifamily investor. He had a scattered site portfolio of two to three unit properties across the city and he was just sick of the maintenance headaches. Having that many, roofs and exterior walls and all that stuff. The reason why we decided to go into bigger deals anyways. And so I trained him up on all of this methodology I laid out for you. What he did is he went out there and did the same thing, right? He found a broker. Built a relationship with them, had lunch with them, kept in touch with them, adding value to them, seeing them at industry trade association events, making posts, relevant posts about, market and financial markets and all that stuff on LinkedIn and then finally this broker, Adam called Brian up and said, Hey, listen, I have an off market deal. It's a 56 unit deal I'm bringing to market in about a month. And it's any area you're focusing on, right? Remember being that very specific and I thought she might be interested. So he sent over the offering materials to him. Brian asked the pricing guidance. It was$5.4 million was the pricing guidance. And in a 56 unit deal, older product like this was charming, but older product. Brian was like, oh my God, this thing is just way overpriced. I was like, Brian, is it in a location that you like? Yes. Is it a deal size you'd be interested in? Yes. Is it something you could feasibly raise the, raise the funds for and take down? Yes. Okay. You want to make an offer, let's underwrite it together. So we did that. Went through all the permutations of different types of value add strategies on this property, from reducing expenses due to the abnormally high utility costs. This is a shared utility building. And we got the story on the property. We knew the owner was doing historic tax credit projects. This stuff was like passe old news for them. They were focused on redevelopment projects so that, didn't align with their business model anymore. And so we knew that there was amount of motivation with the seller on this deal. So we ended up underwriting it. We like Brian, I. 3.2 million is the deal, right? And propose it with a little bit of seller financing. I think he got about a hundred thousand dollars or he was asking for about a hundred thousand dollars to$200,000 in seller financing, which allowed him to blend his cost of capital down, being though it was a higher interest rate environment. And then also being able to bring less money to the closing table too. Brian was scared as hell to make this offer. That was almost a$2 million difference from what the seller's expectation was, and I had to coach him through it. I was like, listen, you're not gonna hurt anybody's feelings. This is what it is. If you are providing a. Clear, articulate reason as to why you are offering this price and why it needs to work for you at this price. Then there's no need for emotions to get involved to make an offer, basically to say, Hey, 3.2 million, take it or leave it. That's the best method to get an fu. So being thoughtful about it. They counter back in the high threes, they settled at$3.3 million. Okay. And the other thing that we negotiated in the actual person sale agreement was that my client, Brian, because these rents were below market, and it was at a point in time with closing that there was a lot of lease renewals coming up. So my client actually asked for, in the person sale agreement that he had the right to negotiate the lease renewal rates and also what the street rent were gonna be on any vacant units that did come up. And the seller was fine with that because Brian wasn't asking for full market rent. He was just asking for a little bit increase to that. So between contract and close, he was actually, and I detailed this in the long form case study I did, he was a able to actually increase the value of the property by about five to$600,000 between contract and closing on the property just through this alone. And so he was able to increase the cash flow on the property from what it was before. And also the valuation almost to the point of, I got my equity back already and I don't even own the building yet. Alright, this allowed him to increase the value. He closed the deal. And then he was able to take the reins on implementing the value add strategy from there. So he's able to actually through, organically increasing rents on there. We talked about the actual renovation, specification being a very light like lipstick, paint caulk everywhere. A new appliance package was able to increase the value of this property by$1.8 million now, and also$200,000 a year in cash flow. Imagine what you could do with that. This is one deal in one year. Are you gonna let that prevent you from achieving your dreams because you're afraid of hurting somebody's feelings by submitting a low ball offer? This offer was reasonable. it was perfectly in alignment with market conditions and also the condition of this asset. So let that sink in Just grab yourself by the balls and make those offers because you have no idea what that can do for you. All right, so now I'm gonna wrap this up with some actionable things you can do right now today, this week, this month, to start getting your deal flow primed up. So remember the band method, deals just don't fall into inboxes, right? They're earned through credibility, specificity, and persistence. So my homework for you this week is to reach out to two brokers this week with your buy box. With that criteria that we outlined follow up with one old contact who might know a broker, so an investor that you've met at an investing event and getting a referral, a banker that you've built a relationship with. Get some referrals so then you can follow up and get some meetings on the calendar. And then just a reminder, this is a slow process, painfully slow. This is the reason why it is important and incumbent upon you to take action today. Persistent, violent, imperfect action is what is going to be the keys to your success. I hope you've enjoyed this journey that you've been on with me over the past couple years with the Go Big Live Real Estate Investors podcast. I am not going away. We're just not releasing their weekly podcast, so make sure to subscribe and turn your notifications on my YouTube channel because we're gonna migrate everything over to there. These podcasts are gonna disappear off of the actual, audio podcast platform so that I can give you dynamic content when I feel that I have something new to share with you. So let's stay connected there. And also the whole reason I do this right is to demonstrate. That, my experience, my capability, my track record with helping people that may be just like you, there are residential real estate investors are looking to scale up into bigger deals and replace their income in less than two years. This is my advisory business. I help clients do this all the time. So if you want to hear about how I can help you specifically earn the lifestyle of your dreams through commercial income property, make sure to find the link below in the description on YouTube and book in a call with me. It is absolutely free non-committal. You are gonna get a ton of value out of it. This is not for everybody either, right? For of the 10 people I get on sales calls, with, there's only two of them that end up taking me up my on my offer. The other eight just get value and they go on their own journey, right? So not everybody needs help. Sometimes people are just hardheaded like myself. They need to. Learn the mistakes the hard way, but if you want to be able to avoid those mistakes that cost me several hundreds of thousands of dollars in cash that I just set on fire, and also millions of dollars, several seven figures. Based upon just the doubt and uncertainty because I wasn't confident in what I was doing. I can become your partner without being your partner, being able to guide you along every step of the way throughout the this process, in this incredibly hard journey because the first larger deal is the hardest, and each one after that is easier. So that's what I help you with. So make sure to book in a call. And peace. God bless, and we'll see you soon.