How to sell inventory (multiple houses)?

4 Replies

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?

Can you empty them and list them all individually? What price range and how long are similar homes sitting on the market in your area?

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.

Owner occupied are the one who is willing to pay a higher price.

To get top dollars, like the other said, empty all rentals, sell it all separately instead of sell all 5 as a bundle to an investor.

@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.