‘Hot market’ may be an understatement when describing the current demand for multifamily apartment buildings in Ontario. The market is characterized by bidding wars and price inflation, leaving many investors scratching their heads as to how they are going to get into an asset class that has been long known for stable and secure wealth creation.
In this article, I outline some of the ways we are strengthening our position to acquire more income-producing assets.
For more insights into why the multifamily asset class is experiencing record-breaking sales and demand from the investor community, read our blog Multifamily Is A Hot Commodity For Investors.
Three Easy Ways to Improve Your Chances of Buying in Hot Market
1. Surround Yourself With a Team of Commercial Residential/Multifamily Professionals
I cannot state this enough. If you want to be able to compete, surround yourself with the best team possible. The commercial real estate transactions are different from residential real estate transactions in a number of ways, primarily in how they get valued and the process by which transactions typically occur. By collaborating with real estate sales people and mortgage brokers that are experienced in the space, you will have the proper guidance that may give you an edge over competing buyers.
One of the things buyers need to remember is that sellers want to deal with buyers that are going to be able to close. If you are competing against an experienced buyer, you need to be perceived on the same playing field at the very least. If you submit an offer that is inconsistent with what is typically included in commercial real estate deals, your submission will be overlooked for more ‘serious’ offer presentations.
2. Don’t Over-Complicate Your Offer
This piece of advice goes hand-in-hand with #1. A team of commercial real estate representatives will know exactly what to include in an offer to help you achieve your objectives while ensuring your interests are protected.
Offers with overly-complicated conditions and multiple pages included in the schedule tend to be overlooked when competing against simpler and straight-forward offers. This is not to suggest that you should trade-off protective clauses for simplicity. You will be better served by finding clauses that protect you, communicated in a simple way.
Also, the more due diligence and homework you can do on a property before submitting an offer, the fewer due diligence requirements you need to add to the offer, increasing its perceived complexity.
3. It’s Not Who You Know—But Who Knows You
You have likely heard the saying “it’s not who you know, but who knows you.” While I believe that you need to excel at both parts of this dynamic, it may be more important in hot markets for commercial brokers and sellers to know you and be aware that you are in the market to buy.
There are two important aspects to being known:
2) Positioning (Personal Brand Positioning)
It’s not enough for buyers and sellers to know who you are by name; they need to perceive you as a serious buyer of multifamily apartment buildings. With our one-on-one coaching clients and through our Online Masterclass: 10-Steps to Buying Your First Apartment Building, we spend a considerable amount of time helping people looking to become buyers develop their personal brand. Personal branding isn’t just about setting up a website and creating a logo (although these help), it’s about clearly defining your goals as an investor and taking consistent actions that show the world (and sellers and their agents) that you are a serious buyer.
Need Help Acquiring Buildings or Analyzing Deals?
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About the Author:
Mark Baltazar, Co-Founder of Peak Multifamily Investments
With 18 years of experience in business strategy and corporate consulting on the global stage, Mark brings a wealth of business management and operational expertise to real estate investing. Winner of the Real Estate Investment Network’s Top Player Award in 2017, Mark continues to build strong momentum in growing his real estate portfolio.
His strong analytical background enables him to bring a strategic rigour to portfolio expansion and the assessment of investment opportunities.
With five years of real estate investing experience across various strategies, Mark oversees Peak’s capital raising, client acquisition, partner relations, educational content development while ensuring the company delivers on its promise of helping others build generational wealth through apartment building investing.