I spent one morning last week at my old stomping grounds, the 10th floor of NYU Schack, where I attended a lively boutique entrepreneurs panel. The panel featured four successful real estate entrepreneurs and the conversation centered around how they got started, how they decided to go out own their own, how they source capital and deals, and opportunities they see in the market.
While there were a lot of good takeaways, what really stood out to me was how they went about finding deals. I’m excited to share their secret with you. I know this may be a shocker, but they don’t find deals through broker contacts. Ready?….deals come from anywhere and everywhere including unlikely sources such as a high-talker on a train to a stranger on a chairlift in Vermont.
Real estate is all about relationships and reputation. One of my favorite quotes that reflects this comes from Peter Linneman:
Always do the very best you can to fulfill what you said you would do, help others simply because you can rather than because you believe it would indirectly benefit you, and do this for the next thirty years, and you will have a great reputation and network.
– Peter Linneman
Simply put, you have no idea here your next deal may come from. Meet with every single person you can, there’s no one who’s not worth your time, because they may have a rich uncle, know someone looking to sell a property or have an investor who fits perfectly in that deal you have under contract. They may have some good insight into your investment platform or who knows, they may even run a fund one day.
When you take the meeting don’t just talk about what you’ve been doing, but figure out how you can help them. It doesn’t stop there. After the meeting, add them to your relationship management program (I recommend Highrise) with a few notes and a reminder to follow-up in a month. Continue to build trust and establish a relationship with as many people as humanly possible.
Here’s a real life example of how my firm found a deal:
We met with a contact in New York →after a few weeks he referred us to a friend → that friend was doing deals in Texas → he referred us to a person he had bought a few properties from in Texas → the guy from Texas found us a few deals and now partners with us on all out Texas acquisitions.
The point is that there is no secret to sourcing deals. Hustle, do what you say, help others and good things will happen.
What do you think?