Before you get a property under contract, it’s best to see what it looks like at 11pm or midnight on a Friday or Saturday night.
Hi, this is Devin Elder, I wanted to talk in this real quick video about the Multi Family Midnight Drive. What is this? Well my company’s buying B and C class apartments, this is stuff built in the 80’s and 70’s, give or take, and usually there’s some kind of value add component. We’re not buying a brand new class A new construction building that’s got nothing wrong with it, usually the opportunity for getting investment is because there’s something wrong it, we need to replace some things, we need to freshen up the property, we need to tighten up operations. Do all these things that we do to improve the net operating income of the property.
So, what I’m getting at is before you buy property you want to see it at night, and you want to see it at night, maybe at midnight on a Friday or Saturday. So if you’re buying in a working class neighborhood, or B or C class neighborhood, it’s one thing to go to the property with a broker or the seller and get a feel for it, when you do that during the day they’re going to show you the best side of that property, the cleanest units, they’re going to walk you certain areas that present the property in it’s best light.
What you want to do is you want to go at 11 at night on a Friday or Saturday, or maybe even midnight, hence the name here, and see what the property’s really like on the weekend when nobody else is watching. So, what I do on any property that we’re targeting is just go do a drive by at night, get out, walk around, spend a little time on the property at midnight or at night on the weekend.
And it’s a good litmus test for you as an investor, if you’re buying a property you need to be comfortable with that property at that time of night on the weekend. If you’re not, then it’s probably a good idea not to buy that property. That comfort level is going to be different from everybody, I’ve been investing for a lot of years I have a high degree of comfort with a lot of sticky situations and buildings, but other investors may not. So it’s a personal preference, but before you get a property under contract and start spending a bunch of money on due diligence expenses and attorneys and all these other expenses that you incur when you pursue a property, you want to go ahead and do the Midnight Drive, take a look at it, make sure it’s something you’re going to be comfortable with in your portfolio. And that’s what I do on any project that we acquire.
So, just a little thought for you in your Multi Family investing journey.
Take care.