How to Sell a Multifamily Property for Top Dollar

As a multifamily property broker in Southern California and Orange County for the last 15 years, not only will the five recommendations below help you maximize the value of your property when it is time to sell, you will also achieve a smoother transaction process, from start to finish.

Prepare Property Financials

Do you have a clean set of books and records?  Apartment owners should start thinking about the building’s financials before putting the property on the market for sale.  In order to analyze the property, potential buyers and banks will need to review the property’s current rent roll along with the profit and loss statements.  Landlords should have their numbers represent an upward trend as it relates to their rents and net operating income.  Stabilize the rent roll with rent increases, market level rents, and cost cutting strategies that drive the buildings operating expenses down, will add value.  

Lastly, upward trending financials should be coupled with diligent and accurate accounting of all extra income and capital expenditures.  For example, having capital expenditures excluded from reoccurring repairs and maintenance in the profit and loss statement. Clean and accurate financials make underwriting the building straightforward for both investors and banks, creating a seamless sale transaction.

Address Deferred Maintenance and Building Appearance

Conduct an exterior and interior inspection of the building to identify any repairs that can be completed to present the property in its best possible light.  There is a number of items to consider, the following are a few of the most common:

■ Health and safety issues, for example, make sure all smoke and carbon monoxide detectors are installed and water heaters are strapped for earthquake safety. 

■ Roof leaks, active plumbing leaks, including stains from old leaks.

■ Clean up hallways, laundry rooms, common areas, and trash areas.

■ Landscaping, ensure these areas are well manicured.

■ Termite or dry rot damage repairs.

■ Seal coat and striping a parking lot can really boost the curb appeal.

■ Complete exterior re-painting or simple touch ups of chipping or peeling paint

Not only will addressing these repairs before listing your property attract more buyers, it will lower the probability of the deal falling apart once in escrow, or the buyer re-trading and asking for credits or a price reduction.

Request a Broker Opinion of Value

Apartment owners need to evaluation the market where their property is located prior to listing the property for sale.  It is important to request a complete property valuation from a multifamily real estate broker to learn the highest and most recent sales prices in the area.  The valuation should include a rent survey of the immediate area to determine how your rents compare to the market. 

In addition, an experienced real estate broker should be able to advise on any property financials and recommend repairs to enhance the value of the property.  Knowing the current and potential value of your property in the market will assure you don’t leave any money on the table.   

Hire a Qualified Broker

Selling a multifamily building is different than selling a home and owners should hire a broker who specializes in the sale of multifamily, apartment buildings to represent them in the sale.  When choosing the right broker, owners want to make sure that the broker knows the property and surrounding location, has sales experience, is someone they trust, and is a broker who has a strong track record in achieving the highest sale price for their clients. 

The right broker should be one that is committed to exposing your property to the entire marketplace to achieve multiple offers, not one that just wants to shop your property to their own buyer’s to achieve maximum commissions.     

Contact Investment Capital Real Estate Today

With over 15 years of experience in the multifamily brokerage industry, our commitment to quality, professionalism, and integrity, enhances the value of each sale transaction.  We provide clients with executable advice, multi-level marketing strategies, closing leverage, and market knowledge to navigate through the challenges presented in any transaction.  Our fiduciary duties to you are held at the highest regard throughout the entire sales process.  Contact us today to schedule a consultation.