Ever try to find a needle in a haystack? Well, that’s what it feels like sometimes if you’re a Florida Private Equity Firm trying to find multifamily investment opportunities in Florida!
Multifamily real estate deal sourcing in highly competitive markets, like Florida, is definitely a challenge. In fact, sadly, I talk to investors every day who begin their search in earnest only to rethink their plan after striking out repeatedly. Many get frustrated and move on to less competitive markets and are forced to accept lower returns as a result.
So, how do we find deals? We are able to source deals because we have extremely well-developed networks, we have developed a solid reputation in the market, and we offer sellers a fair price for their property and close efficiently.
The Florida Private Equity Deal Sourcing World
So, what is the Florida private equity deal sourcing world really like? Well, it’s highly competitive and a place where being inexperienced can make it very difficult for you to make money.
Generally, there are four types of buyers and sellers – Institutions, fund managers (like KRI), syndicators, and individual buyers. Each of these has their own preferred deal type and size. One thing they all have in common is that they are all pursuing multifamily investment opportunities and they are all there to make money, and a lot of it.
Interestingly, of all the groups I listed above, the group that has the most difficulty finding deals is the syndicator. The reason for this is the fact that they have to convince a seller to allow them to “tie up” their property while the syndicator completes their due diligence AND they try to raise the funds necessary to close the deal. When sellers work with syndicators as buyers, they not only have to worry about being re-traded for something found during the due diligence period, but they also have to contend with the risk that the syndicator can’t raise the funds necessary to close the deal. These risks put syndicators at a distinct disadvantage.
Equally important, and regardless of which of the above groups a buyer is associated, is the issue of experience. Sellers care a lot about the level of experience a buyer has. First, they care because of the obvious – their ability to close. But a more subtle concern sellers sometimes have with inexperienced buyers is the way an inexperienced buyer approaches the due diligence process and all other aspects of taking a deal from contract to close. For example, inexperienced buyers are more apt to try to re-trade a deal because of issues that don’t really impact the deal. This causes unnecessary stress for sellers and the increased risk that they will have their deal cancelled and the property will have to go back out to market. These are all very legitimate concerns and as a result, make sellers more reluctant to do deals with inexperienced buyers.
KRI’s Multifamily Investment Opportunities
Multifamily real estate deal sourcing is, as I have pointed out, a challenge for anyone looking for multifamily investment opportunities. It is one of the many reasons investors who would like to invest in Florida multifamily real estate invest with KRI in our Multifamily Real Estate Fund.
We are deeply entrenched in our target markets, have tons of experience investing and managing the execution of value-add business plans, and have done very well for our investors in the past. The market trusts us as buyers and the brokers know that if we make an offer on a property, we WILL get the deal done.
So, if you are an investor looking to invest in Florida multifamily real estate, be sure to consider investing in a Florida Real Estate Private Equity Fund like KRI’s. You will get the benefits of owning real estate without all the challenges and frustrations associated with sifting through dozens of multifamily investment opportunities and coming up empty!
