Appropriate Prep for Selling A Portfolio

6 Replies

I have several residential multis and a few SFRs that I would like to sell as a total portfolio. How do I create a sales document  and with what information?  It isn't commercial property. Can it be advertised on this or other websites like Loopnet? 

 I would like to invest closer to home and to consolidate. The properties are in upstate NY and have been a good investment. 

Thank you 

It doesn't need to be fancy.  You can simply put them all in an excel spread sheet and also have a separate file with photos, and most investors will also want to see the full financials.

Minimum information on each should include: (You can make these the columns on spread sheet)















Are you planning on hiring an agent? If so, it would be their job to gather and organize this info for buyers to look at. 

Hiring an agent is a tough decision bc, even though I love my agent in this town, they are not computer media  savvy and I am proposing something out of the box for this area. Most people would market one building at a time but I am looking to sell the NY portfolio and to get fewer properties closer to CA bc of my age.   It may end up a 1031 too. 

@Deanne Bourne , There are two challenges you will face with selling a portfolio in a smaller/non-portfolio type market. The first as you recognized is going to be marketing. It's not just that normally these properties would be sold one at a time. It's also that the scope and composition makes it more of a quasi commercial product. And 99% of MLS traffic a traditional agent would give you are going to be one unit buyers. You can counter this by doing some marketing of your own. Start here. Search out the investor groups and probe clubs and find other investors with multiple units before you sign any listing agreement. This could shake out a buyer without need to list.

Your second challenge is that a portfolio (especially when it's an unusual critter in a market) could command a steep discount to sell as a group.  You can overcome this in part as mentioned above - market some yourself nationally (there are tons of folks actually in your backyard who are longing to take their money from CA and put it into turn key products elsewhere.)  You're basically offering a turn key portfolio in one swoop.  That's attractive.

A cleverly structured 1031 can also help on this front in a couple of ways.  If you want to maximize the sales price of each unit you will need to sell them as individual units.  A reverse 1031 would allow you to purchase the perfect CA asset and then back fill into it with sales of your portfolio as they happen.  This process in a safe harbor mode will give you 180 days from the day you take control of your new property to sell all of the old properties.  Time the seasons and you could do this quite nicely.

Or you can simply pursue a course of regular exchanges on each sale but using them to consolidate into fewer replacement properties.  Your critical time path will be the calendar for the sale of your first property.  But as long as you keep that in sight you may sell 3-4 in a proper time frame and purchase one larger CA asset.  Then sell 3-4 more and repeat until your portfolio is now fewer and located near you.

@Deanne Bourne we broker portfolios all over the country. I'm happy to refer you to our residential portfolio expert in NY. I just closed 42 units in a small Wisconsin town and 96 homes in Chicago. Obviously a very complex sale to knock out in one transaction and you should rely on an expert to value and market this portfolio nationwide.

I'll get back shortly with more  questions.  Thank you to those that have responded. It gave me more to organize and to think  through. 

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