Selling Multiple Properties?

Question

Hey Everyone,

My partner and I are coming up on owning about 8 units, with hopefully the 2 more on the way. I was just wondering if anyone has had any experience selling their portfolio, or at least multiple properties. I imagine you have to sell at a discount. We're getting great value out of the appraisals and are able to cash out refi, but when it comes to selling, I would imagine it's a little difficult getting the full market value of investment properties, even if they are performing.

Just wanting to see if anyone has had any experience selling off multiple properties and what type of value do you unlock in comparison to what the property is actually worth. Thanks.

Ken Naim · Answer

@John Cantu in order to get the maximum retail value i waited till the leases were up, fixed up the properties and sold them individually.

I see many portfolios for sale nowadays. They are being sold as if it was one larger multifamily property with the price being based on the NOI and a market cap rate. This could potentially yield a higher net price for you depending on the cap rates for your area. It would prevent you from selling them one by one and having to rehab the properties to retail condition. So even if the gross sales price is lower, the net may higher. You need to run the numbers both ways and factor in your time snd opportunity costs.

It took me a year to sell my portfolio individually so a lot of money was sitting on the sidelines earning nothing, as i wanted all of it to be deployed together into something larger.

If you deicde to sell as a portfolio make sure to list with a commercial broker as they will help you price it right. Residential brokers will frequently undervalue the deal.