You’ve purchased an apartment, renovated units, raised rents and now you are ready to sell. It is important to make your property stand out, in order to maximize your profit upon exit. You also, need to understand what you are going to do with the sale proceeds. Let’s take a look at some key things to think about. Many of these should be done right from the start.
Property Financials and reporting
Having accurate records for your property will be important. Not only will the buyer want to see detailed records, but their lender will as well. You should have detailed 2 years of profit and loss statements, a current trailing 12 month statement (T-12) and a current rent roll. You should also have leases ready to provide a buyer, contracts for services, tax schedules, surveys, old environmental and a list of all renovations completed.
Increase Property Performance
Property owners should be doing as much as they can to maximize rents and minimize vacancies. Also, do your best to minimize expenses, without jeopardizing the future performance of the apartment. Getting an energy audit to reduce utility expenses and implementing utility bill back programs can save tons of money. Completing repairs on the property as early as possible can also help lower maintenance expenses. Make sure your management company is running efficiently or hire a new company to operate the buildings.
Make it look good from the outside
Investor’s don’t buy buildings because they are cute – or so you think! Investors are humans and are attracted to nice looking properties, so the better you can make the property look, the more money you will get (to an extent).
- Make the landscaping look good and the outside freshly painted or cleaned.
- Having a good parking lot
- Clean common spaces and fresh looking outside
- Make the office and club house shine and inviting will add plenty of value.
- Have an organized boiler/utility room
- Good signage
Market your Property
Find the right broker to list your property is important. This should be done many months in advance. If it is a hot market have the broker do a call for offers with no price. If it is a slow market, then have the broker put a price on the apartment. Having a broker that is willing to put together an offering memorandum (OM) with pro-forma projections can go a long way.
Also, be sure that your team is ready to show the apartments. Have some of your best tenants available to allow showings, along with a nice vacant unit or 2. Also, think about the person that will be opening up units for the Broker and buyers and make sure they have a personality that sells. Let the managers and maintenance know that if they are doing a good job, there will be a good chance the new owner will want to keep them employed.