There are a ton of people out looking for duplexes, triplexes and fourplexes to buy in the Kansas City area. Here's a list of the 9 Things You Can Do To Help Sell your Multi-Family Home quickly and for the best price. This also goes for apartment buildings.
1. Have ALL keys to all units, including the basement, storage & utility spaces. Buyers are going to want to examine the units and check out the furnace, A/C, plumbing, electric & structure.
If there are two buildings available in the same locale, producing about the same income, the one in the best condition is going to win. If no access is provided to see the mechanicals, it will be assumed that they are not in very good condition. If there are areas which cannot be viewed, it will be assumed that a bad problem, possibly structural, is being covered up.
2. Have the lease agreements & rent rolls available. Do this before you list the home. Buyers need to be able to compare ROI to determine which property will give them the return they're looking for.
If the numbers from MLS look good, the investor needs to be able to verify that the present owner is really getting $800/month/unit. They also need to know when the lease is up to plan for costs associated with advertising, screening & leasing the units.
3. Seller's Disclosure. Buyers want to know the age of the roof, mechanicals, plumbing, electric, etc. This goes into their computations when figuring out how much to offer.
If the seller claims not to know this information, the investor will assume either the seller is trying to hide something or did not take very good care of the property. This will effect the price they're willing to pay.
4. Updates. Cosmetic, structural, mechanical, and landscaping. Make a list of all the updates that have been done to each unit as well as the common areas.
Are the appliances under warranty? When was the furnace last serviced? How new is the roof? This helps the buyers figure out what expenses they'll need to budget for after closing. The more information the seller provides about what they've done to the property, the more valuable the property appears to the investor buyer.
5. Prepare your tenants for showings. Put it in your lease agreement. When you decide to sell, talk to each tenant. Remind them that cooperating with showings when the property is for sale is part of their lease agreement. Try to respect their needs but find a way for buyers to view the units. If needed, you can even designate specific times and days of the week for showing particular units. Consider offering incentives for tenants who keep their units in show condition.
Investors don't want to inherit problem tenants. Buyers are more likely to make an offer on a building with tenants who keep their areas clean and organized.
6. Consider leaving 1 unit vacant if possible. This makes it very easy to show. Then arrange for showings in tenant occupied units once an offer is made.
The advantage is easy showings. The disadvantage is that the investor/buyer will calculate costs of getting the unit rented to a suitable tenant. This shouldn't be a deterrent if the building is in good condition and in a desirable area.
7. Gather any historical documents or photos of the building or its' previous owners/tenants. Some buyers will appreciate knowing the history. Some future tenants may be willing to pay a little extra to live in a building whose history has meaning for them. For instance, an art student might like to live in the same building as Walt Disney did when he lived in Kansas City.
8. Do your math! Put the income, expenses, capitalization rate, and rent range in the MLS. There's a place to enter Gross Income, Expenses, Net Income, Capitalization Rate, and what expenses include.
Please note that Net Income cannot possibly be the same as Gross Income. If you only put a rent range in, the investor is going to calculate income based upon the lowest price. Agents who do not enter this information into MLS at all are doing their seller a disservice.
9. Get the seller's contact info up front, before you list the property. Explain to them that they need to be able to return your phone calls in 24 hours or less.
If the seller's agent cannot reach the seller, buyers will move onto another property. If the seller's agent is having difficulty getting the seller to produce needed information, the buyer will assume this seller will be difficult to work with and maybe not really motivated to sell.
Comments(1)