Have you invested in multifamily deals in the past that turned out to be either a complete waste of time, money or both? If so, the reality is that having the best data possible is the key to success with every multi-family transaction that you invest in.
In this article, we will offer you tips on how to find the best data for multifamily properties and how to use that data to your advantage.
Why You Must Become an Expert at Using Data
If you want to truly become a successful multifamily real estate investor in the 2020s, one of the most important things that you absolutely have to do is become an expert at mining, analyzing, and using data to your advantage.
In today’s multifamily real estate market, there are more challenges that investors have to face than ever before.
Thankfully, having access to the right data will provide you with an advantage over other multifamily Real Estate Investors because, you will know which properties to go after, properties that don’t quite fit your investing criteria and which properties don’t have equity.
When you’re able to analyze the right data, you’re also going to be able to have information at your fingertips regarding the property owner, their net worth, the language that they speak and a wide variety of other factors that will help you to the deal.
Even if you hate using computers, or doing online research yourself, it’s easier than ever before to find data on virtually anyone using a wide variety of free data sources online or paying a company to assist you with compiling the data that you need before investing in a multi-family property.
What Are the Types of Real Estate Data That You Need to Have Access To?
In today’s world, every multifamily real estate investor can have access to a large amount of data in a very quick period of time thanks to websites like Zillow, relator.com, and the MLS.
When you’re pulling data from these websites, it’s important that you know specifically what you should be looking for because the key to success as a multi-family real estate investor is first being able to find the data that you need and then second being able to utilize it.
Here are the things that you should be looking for when analyzing multifamily data:
Physical Details About A Property
The first thing that you want to analyze when reviewing a multi-family property is the physical details about the property itself. You want to know exactly how many units the multifamily property has including the number of bedrooms and bathrooms in each unit.
Besides knowing things like how many units are in the property, and the number of bedrooms and bathrooms per unit, you should also become an expert in regards to other details of the property like its location, things to do in the area, proximity to public transportation, shops, and stores nearby.
Knowing all of the physical details about the multifamily property will help the owner to see that you are not just another investor who wants to waste their time.
Many owners actually hate having to provide investors with physical details about their properties during initial phone conversations when all of those details can be found online.
Your goal should be to establish an immediate rapport with the owner of the multifamily property because that rapport will provide you with an advantage over other investors who are not going to take the time to research the physical details about a property before they contact the owner.
Let’s say that you’re interested in purchasing a multi-family property but you’re unable to find more information about the property or the area online before contacting an owner.
The good news is that besides the basic information about a property that you’ll find on a website like Zillow, there are other ways to find useful data about a property including resources like the Realtors Property Resource database, Insurance databases, and title companies.
Financial Details About the Property
Besides taking the time to understand the physical details about a multi-family property before you invest in it, you must also devote time to learning more about the financial details of the property. This includes finding out details by who is the holder of the real estate note, what’s the monthly note payment, interest rate, and you should also verify if the multifamily property is on an amortization schedule as well.
If you haven’t pulled this data in the past, no problem, you can easily access the financial data for a property by visiting the local County Deeds Records Office or you can contact a data aggregator to assist you with compiling the data for a multifamily property that you need before you make contact with the owner.
Details About Who Owns the Property
Once you take the time to learn the physical and financial details about a multi-family property, the next thing to do is to learn more about the seller before contacting them.
Learning more about a seller is an important part of the process before investigating in a multi-family property that you want to purchase. You want to know specifically who the seller is, what do they do for work, how much money they make in their current business or job, but most important of all you want to find out why they’re selling the property.
Digging deep into the details of the seller will enable you to tailor your marketing efforts to your advantage and potentially tap into any hot cut in detail which may be the main motivating reasons why the owner of the property has the desire to sell it.
Understanding the seller, including their potential pain points, is part of sales 101 because, if you can show that you’re a solution to their problem, they may be more inclined to accept your offer over another investor.
A good example of a pain point that you want to bring up when communicating with a seller is to find out if the seller is using a ton of credit because if you’re able to pay cash for the multifamily property you shouldn’t hesitate to emphasize this because it may make your offer stand out over another investor.
There’s no doubt that it’s going to take some time to find all the financial details that you need about a seller before contacting them so if you don’t want to take the time digging into this data yourself it’s best to consider hiring a data aggregator to assist you with this process
Owner Contact Information
Last of all, but most importantly, you’re going I want to find the contact information about the owner. This includes the owner’s phone numbers and or email addresses.
You may be asking yourself how in the world am I going to find this information? The answer to this question is simple, you can find personal information about anyone, including owners of multifamily rental properties by utilizing a skip tracing service.
Thankfully, there are a wide variety of companies out there that offer skip tracing Services. Before choosing a company to assist you with Skip tracing, it’s best to thoroughly research them online including reading all reviews about the services that they have to offer for you before you pay your hard-earned money to hire them with assisting you in your skip tracing needs.
What is skip tracing? It’s a process of collecting information on an individual. All information selected is verified and analyzed to determine the location of the individual in question so that before the information is given to the skip tracers client, they can have every confidence that they’re presenting the most accurate information possible.
Although many skip tracers utilize the internet to track down people and find information, the most experienced skip tracers in 2020 utilize time-tested social engineering tactics including calling friends and family members of their query as well as accessing as much data about the person they are researching including phone number databases, credit reports, credit card applications, criminal background checks, loan applications and much more.
In many cases, it may be best to pay a skip tracing company a little more money upfront if you can be guaranteed higher-quality data than other skip tracing companies.
Tips for Using Online Sources for Finding Multifamily Data
As we mentioned throughout this article, there are a wide variety of online sources that you can use for finding data on multifamily properties in 2020. The key to success with choosing a website to help you with finding multifamily properties is to make sure that it has a good property finder tool.
With a property finder tool, you should be able to view multi-family properties in a specific city, town, or location.
Besides being able to search for multi-family properties based on the physical location, you should also be able to use a property finder tool to find multifamily properties for sale based upon those units in the property, bedrooms, bathrooms, and amenities.
Having a reliable property finder tool is important but, you should also choose a website that has a heat map analysis tool.
Heat maps are important because they will enable you to analyze multi-family properties more easily since they will specifically show you properties in your area that match your criteria in terms of red, yellow and green colors.
These visual indicators will also enable you to more easily filter properties based on criteria like cash on cash return, occupancy rate and more!
In 2020, the biggest thing that you have to do as a real estate investor, especially in a competitive market is to become an expert at finding, understanding and working with multi-family property data.
As you move forward with building a portfolio of multifamily properties it’s best to create a file with a list of data sources that you could tap into for future deals. This file should also include a list of data aggregators and skip tracers that you can use to assist you with finding the data that you need for a multi-family investment property.
Yes, having the right data is the key to success with investing in a multi-family property. You have to have the right data going in because if you don’t have the right data, you may never get to the closing table in the first place so it’s best to really focus on streamlining this aspect of your business.
Partner with Me
Are you an accredited investor who is interested in getting started with investing in multifamily properties but you just don’t have the time to do it yourself? If so, I invite you to contact me!
I currently manage close to $80 million in projects across the United States and I’m looking for accredited investors who are serious about building their investment portfolios.
To learn more about partnering with me I invite you to contact me by clicking here.