How to sell inventory (multiple houses)?

Question

Last month, I sold an empty SFR pretty easily. I actually posted in my local REIA facebook page and an international investor and I made a deal. This investor has expressed interest in any other properties I may have.

I've got 5 SFRs that are all leveraged by a single commercial mortgage, so I'd like to sell them all together. All 5 are rented, but with two are on month-to-month leases, so I could feasibly get those empty pretty easily prior to selling if that's what the investor wants (I know inheriting tenants is a very opinionated topic).

What are some good tips for presenting my inventory to help me get the best price? I know I need to provide rent roll and such, anything else? Should I include any specific numbers/values up front to make it easier for them to see their bottom line? Should I offer to empty the the month-to-month houses or wait for them to ask?

Dave Foster · Answer

@Amy E. You may not have to let the blanket mortgage tail wag the dog. Most portfolio loans will contain a partial release mechanism so you can sell one at a time and keep most of the loan in place.

From a 1031 perspective. Selling individually means more exchanges, calendars, and moving parts ( but still very manageable). Selling a group of properties on one contract to one buyer can be treated as one exchange. So fewer moving parts but less flexibility.

Steve Vaughan · Answer

I sold 3 empty over the last 10 months to owner-occs. I delayed the 3rd closing until 2018 so taxes didn't kill me.

I wouldn't give more than market rent numbers to get the best price. Investors don't pay more unless it's a huge portfolio usually. If you aren't going to 1031 and bought a while ago, sell only a couple per year or stroke a large check to your state and Uncle Sam.

The commercial loan may be a factor. I hate those things. Will they let you separate? Doubtful unless you give them both arms and 1 leg.

How to sell inventory (multiple houses)?

How to sell inventory (multiple houses)?

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