In the 1982 movie ET, children learn the Alien being likes a certain candy. Then the children discovered they can get the Alien to follow a trail of the candy. Producers of the movie first approached the company that makes M&Ms about using their candy. They turned them down. The next offer went to the company that makes Reece’s Pieces and a deal was struck. It was a home run deal for Reece’s Pieces as their sales soared with the box office smash hit ET.
The science of performing multifamily acquisitions is seeing opportunity. Sometimes this opportunity is blatantly obvious, sometimes hidden. When obvious the asking price reflects this.
It’s the not-so-obvious that can provide great opportunity. For example, seeing the Resident experience in a different light. What about cutting operating cost with the implementation of professional management and technology. Or addressing deferred maintenance incrementally yet immediately.
You hope that in the crush of deal flow to see the “no-brainer’s” and allow them to bubble up to the short list for immediate consideration. Everyone has a story about the one that got away.
How did the makers of M&Ms not see the opportunity? Was it just another little movie deal with an unknown Director? Did they think the movie wasn’t a fit for their brand? Certainly, no one looking at the deal thought a movie about an Alien and some kids would still be part of the cultural conversation thirty years after its’ release. Opportunity knocked, opportunity lost.
Mr. Wilhoit is the author of two books: How To Read A Rent Roll: A Guide to Understanding Rental Income and Multifamily Insight Vol 1 – How to Acquire Wealth Through Buying the Right Multifamily Assets in the Right Markets.
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About This Blog: Multifamily Insight is dedicated to assisting current and future multifamily property owners, operators and investors in executing specific tasks that allow multifamily assets to operate at their highest level of efficiency. We discuss real world issues in multifamily property management and acquisitions. This blog is intended to be informational only and does not provide legal, financial or accounting advice. Seek professional counsel. www.MultifamilyInsight.com