Over the last several years as a multifamily broker, I’ve learned many lessons.

Early in my brokerage career, I observed that many sellers don’t appropriately prepare their property for the market. Then when they engage buyers, either off-market or with a broker, they struggle to sell the property for its fullest potential.

I asked myself why this phenomenon exists. Do these sellers not know what steps to take to make their assets more saleable? Maybe they think it would be too much work or cost too much money to get the property sale-ready.

It occurred to me that many multifamily owners are not active in buying and selling real estate. Many have owned their property for years without going through a real estate transaction. It’s possible these owners don’t know what buyers look for in an investment and how to position their assets to attract attention from investors.

So I started giving guidance to sellers on what steps they can take in the 6-12 months leading up to a sale to ensure their property is marketable.

Today, I want to share a success story about how we helped an apartment owner sell her property for its highest potential, without doing an expensive renovation project.

In the end, we helped her sell for $350K more than she would have achieved if we had listed the property 9 months earlier.

Success Story

A few years back, I connected with the owner of a 26-unit apartment building.

She had owned the property for over a decade and it was in excellent condition. But she had reached a point in life where it was finally time to consider a sale.

So I started gathering information about the asset to prepare a market valuation and listing proposal.

She didn’t have a detailed rent roll, so she just typed a list of rents from each unit into an email.

She didn’t have a professional profit & loss statement, so she estimated revenue and expenses from memory.

Five of the twenty-six units were vacant and it appeared her annual vacancy rate exceeded 12%.

I studied rent comps in the area and realized her rents were 15% below market.

She managed the property herself, and it had not been a priority in her life. Operations had not been optimized for a sale.

I told her, I could sell the property now, but only at a discount to its potential. With unclear documentation, below-market rents, a high vacancy rate, and unchecked operating expenses, we could sell the property for only $950K.

I also explained how she could get up as much as $1.25M ($300K more) by implementing a few operational improvements.

To get top-dollar she would need to:

Fill vacant units at market rates. I told her exactly what she could rent her units for based on comparable rents in the area.
Increase rents as leases turnover and ask for rent increases from tenants currently on a month-to-month lease.
Improve occupancy by advertising vacant units as soon as they become available.
Stick to a budget with operating expenses. The property was already in excellent condition so no major maintenance needed to be addressed.

Then I suggested she document all these changes by creating proper financial statements including a rent roll and P&L statement to track her operational improvements.

In the end, she decided not to sell right away and instead put my recommendation into action.

Nine months later I received a call.

“We did what you suggested. I’m sending you my rent roll and P&L. When can we meet to gameplan a sale?”

Sure enough, the new rent roll showed market rents for most units and the property was 100% occupied. Her profit & loss statement had a detailed breakout of her operating income and expenses which had been in line with my estimate nine months earlier.

Her preparation paid off.

We listed the property and through an organized sale process, we sourced 7 tours with qualified buyers. We then facilitated a call-for-offers deadline which we received 5 offers. We countered 4 of the offers in a best-and-final round in which we saw 2 buyers increase their offer.

In the end, we closed the deal at $1.30M, which was $50K more than our listing price, and $350K more than would have been possible 9 months earlier.

I wrote an ebook for apartment owners who are considering a sale and want to take action in the months ahead to ensure they maximize the value of their investment.

By following these guidelines, you will position your property to capture the attention of buyers and mitigate common objections that lead to discounted offers. You will gain leverage in the negotiation and secure the best possible deal for your asset.

You can download your free copy by clicking the link below.