#235: Organically Growing a 200+ Unit Portfolio, Direct-To-Seller Strategies, and Focusing on Tertiary Markets with Zach Hoereth
May 28, 2024
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Zach Hoereth, an investor specialized in small to midsize multifamily deals in the Midwest, shares his journey to building a 200+ unit portfolio. He discusses effective direct-to-seller strategies, emphasizing the power of persistent follow-up. With anecdotes about navigating market challenges and leveraging single-family homes for wealth, Zach offers insights on conducting due diligence from afar. He also reveals his future goals, including a focus on self-storage facilities, and highlights the importance of collaboration and relationship-building in the industry.
Investors can capitalize on disorganized bookkeeping by enhancing property management efficiency, transforming poorly managed assets into profitable investments.
Direct-to-seller strategies, including targeted marketing and persistent follow-ups, are crucial for securing real estate deals in competitive markets.
Building strong relationships with local lenders can provide investors with better financing options and streamline the acquisition of smaller properties.
Deep dives
Opportunities in Disorganized Operations
The discussion emphasizes that disorganized bookkeeping and operations present valuable opportunities for investors who can streamline and enhance efficiency. Many property owners may struggle with managing their real estate assets effectively, creating a gap where skilled investors can step in and capitalize on improvements. For instance, the podcast highlights how successful investors can optimize a poorly managed property to significantly increase its value. This reflects a broader trend in real estate where adept management can transform chaotic situations into profitable investments.
The Value of Direct Seller Strategies
Direct-to-seller strategies have proven to be essential for finding potential real estate deals, especially in the Midwest. The hosts discuss their use of targeted marketing techniques such as mail campaigns and focused cold calling to engage property owners. Through consistent follow-ups, investors can build relationships and eventually lead to successful transactions, even if it takes several years. Personal anecdotes illustrate how patience and persistence in reaching out to sellers can yield fruitful results in a competitive market.
Navigating Market Challenges in Florida
Investors face unique challenges when transitioning into new markets, particularly in competitive areas like Florida. The conversation reveals that high prices and robust competition can create barriers for investors looking to acquire properties in hot markets. For example, difficulties such as skyrocketing insurance costs and the residual effects of natural disasters complicate investment decisions. As a result, some investors opt to maintain their investment focus in more familiar and stable markets, such as the Midwest, where they can leverage existing knowledge and networks.
Building Relationships with Local Banks
Strong relationships with local banks and credit unions can facilitate smoother financing processes for real estate investors. The hosts discuss their experiences in securing loans for their properties, emphasizing that local lenders are often more accessible and willing to work with investors directly. By establishing trust and credibility, investors can find better financing options that suit their specific needs. This strategic partnership is particularly beneficial when dealing with smaller, less conventional property deals that may not attract larger institutional lenders.
The Shift Towards Self-Storage Investments
The conversation highlights a strategic shift towards investing in self-storage facilities due to their operational advantages. Investors express a preference for storage units, as they typically require less hands-on management compared to residential properties, allowing for greater control over operations. This pivot is also driven by a perception that the self-storage sector can provide lucrative opportunities with less competition. The advantages of directly managing storage assets, combined with increasing demand, make this strategy appealing to many investors seeking efficiency and profitability.
What's the key to success in direct-to-seller real estate deals? This week, Zach Hoereth shares his journey as an investor focusing on small to midsize multifamily deals in the Midwest, primarily in Indiana. He has a portfolio consisting of several hundred units across single-family homes, small apartments, and self-storage facilities.
In this episode, Zach and I dive into the world of direct-to-seller deals, discussing his strategies for finding deals, the power of follow-up, and some fun stories from his real estate journey. We touch on the challenges and rewards of going direct-to-seller and the importance of building relationships in the industry.
Here are some highlights from the episode:
- How does Zach find deals in the Midwest and what is his marketing strategy? - What are some fun stories Zach shares about his deals, including one involving persistent follow-up with a seller? - How does Zach manage the dynamic of investing in markets where he doesn't live, and what is his approach to due diligence in those situations? - What is Zach's strategy for leveraging single-family homes in his portfolio and how does he use them to build wealth and cash flow? - What are Zach's goals for the future in terms of building his real estate portfolio, including a focus on self-storage facilities?
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