Selling

Question 1

Return on Equity

Answer 1

ROE = Cash Flow after Tax / Current Equity in Property

Question 2

How long to plan ahead before selling?

Answer 2

Best to have plan in place 6 months earlier when wanting to sell, so that you can make your financial reports look the best they can

Question 3

How to make it shine physically for selling?

Answer 3

• Make it shine physically. Key items:
  
  • Is interior and exterior paint in good shape?
  • Is siding intact or in need of repair?
  • Is woodwork solid throughout property?
  • Does roofing need to be repaired or replaced?
  • Can landscaping be upgraded or trimmed back?
  • Laundry room clean and everything in good working condition?
  • Windows and screens in tact with no cracks/holes
  • Is parking lot in good shape?
  • all doors on apts the same color and good shape?
  • Every exterior light functional and light-sensitive?
  • Mailbox area neat, clean, uniform?
  • Common area hallways looking good?
  • Basement clean?
  • Fencing and metal work in good shape?
  • electrical, plumbing, septic issues?
  • Balcony in good shape
  • Pool area neat, clean, inviting?
  • Leasing office look nice?
  • Maintenance shed organized, neat, clean?

Question 4

MM author’s rule of thumb when listing property:

Answer 4

If a broker sold it to you, let them get the listing/commission on the sale. This is a relationship business and you want more deals.

Question 5

How good broker’s should list:

Answer 5

They should create a “Call to Offer” that includes a property package that is sent to their entire list with deadline date for offers, but no price listed. By not putting price, brokers are asking for highest bid and allowing market to set price. Broker then takes 5 best offers, asking for best and final offer, then final offer. This usually brings highest price.

Question 6

Selling on Loopnet:

Answer 6

Occasionally author sells on Loopnet if he’s not looking to nurture a broker relationship in that area. If you’re going to sell it on LoopNet make sure you prioritize experienced buyers. Always require proof of funds and get written permission to contact their lender to be able to track funding progress.

Question 7

Your obligations as a seller:

Answer 7

Last 2 years of P and L
- YTD and monthly operating Statements
- Current Rent Roll
- Current Mortgage Note
- A copy of the Survey