One of the fastest growing segments of the real estate industry today is multi-family property sales. Since surveyed agents state that 95% of their business is that of single family sales, it is easy to see why there is a wide open playing field for the multi-family market. Agents who choose to focus on this arm of the market know that it is becoming a very lucrative part of the real estate industry.
While many agents would like to build on their income by expanding their areas of expertise to include multi-family properties, several issues stand between them and the actual execution of multi-family sales. The primary reason for this is because many agents have a fear of not knowing the basics aspects of this unique niche market. Can you remember back to the days when you first received your real estate license? Think about your first week in the business. What were your fears? Did you ask yourself any of these questions? Where will I find my first customers? How will I run my new business? How will I obtain a listing? Will I be able to market and sell my listing(s)? When agents are becoming acclimated with the multi-family segment of the real estate industry, some of these same questions may become a factor. Some of the fears and questions they have are often the following:
When working with a multi-family seller:
- How do I prospect to find sellers of multi-family investment properties?
- How do I speak the "language" of the multi-family seller?
- How will I market the property?
- How do I determine if the property is truly profitable?
- Will the property "make sense" to an investor?
- How do I create a profit and loss statement?
When working with a multi-family buyer:
- How do I find buyers of multi-family investment properties?
- How do I speak the "language" of the investor?
- How do I read a profit and loss statement?
- Will the property "make sense" to an investor and how do I demonstrate this to the buyer?
- What are the mitigating factors that are important to an investor that I must know?
- How do I write a contract on a multi-family property? What are my limitations?
Read on to find out how to answer some of these questions to remove the basic fears that we all have when trying to become proficient with an unfamiliar market.
1. The first step in the process is to identify an area in your market that has an abundance of multi-family properties. Begin by targeting multi-family property owners by evaluating tax records to determine the mailing addresses of absentee owners (owners who do not reside at the dwelling). You can start by writing these owners a letter introducing yourself and detailing your real estate experience. Try to obtain a contact telephone number and begin prospecting the owner by phone also. Be sure to cross reference the phone number with the "do not call list".
2. Upon obtaining a listing, be certain to recognize quickly that your marketing strategy must be different from that of your single family properties. Start here by creating a profit and loss statement. Also known as an income statement or net sheet, this document demonstrates the income in comparison to the expenses on the property. It acts as a vehicle for an investor to determine the true profitability of a property. Post this document as a document link on your MLS (if applicable) and have it available for serious investors and their agents. This is crucial to have in order to illustrate to investors and agents alike the ability of the property to be a great investment vehicle.
3. Increase your education in the field of multi-family properties. You can do this by reading books regarding multi-family investing or finding a mentor that is a top producing multi-family agent. Perhaps one of the most impactful ways to become informed on multi-family properties is to earn the "Multi-Family Specialist®" (MFS®) designation.
Multi-Family Specialist® Multi-Family Specialist® (MFS®) is the only certification and designation available to real estate agents which is specifically geared toward multi-family properties. Multi-Family Specialist designees have the ability to differentiate themselves in this very competitive market. This is due to the fact that agents who previously only focused on single family sales can now confidently approach and target multi-family property owners and display the array of knowledge that they have in this specialized field. Additionally, MFS members can effectively demonstrate to investor purchasers their ability to translate facts and figures from an investment property to determine the true appeal of the subject property. Only until the introduction of this informative designation, many agents have avoided the multi-family market. By earning the MFS designation and adding this additional niche to their sales portfolio, agents are increasing their income dramatically. Earn the MFS designation today by logging onto www.MFSpecialist.com and begin to tackle this untapped market today!