How long does it typically take to sell a multi unit property?

8 Replies

In said example, if you're able to purchase a quadplex in upstate New York, that was under valued and under preforming; Then proceeded to substantially increase its ARV along with its monthly revenue. How long on average do you guys think such a property would remain on the market before being purchased by an investor?

Imaginary Property Details 

Property Value ($600,000)

Monthly Revenue ($5000)

If the property is priced correctly it should sell easily. However, you have not provided enuff information for us to give feedback. 

Commercial properties are priced based on NOI/Local going cap rate

Many Rochester areas stay flat in value for decades regardless of capital improvement.  Flipping / short holds only work in very select areas.  5k / month on 600k is terrible CF w our taxes... 

Mark is absolutely correct, the local buyers are not going to buy based on cap rate. You may be able to sell to an OOS investor for cap rate. It doesn't mean it isn't worth as much, it just means the volume of cheap properties available to local investors is too high for them to buy at cap rate. Mark is also right that $5k gross revenue, is bad. I think you mean a $60k NOI and then you're going to sell at a 10 cap for $600k? This isn't the market for that kind of sale unless you have a list of turn key buyers.

Look at these numbers

  • 4 Units Renting $1,250/Each
  • Gross Annual Income $60,000.00
  • $480k Mortgage.
  • $120k Down Payment.
  • 20 Year Commercial Loan at 6%.
  • $5,000 in annual taxes.
  • $2,200 in annual insurance..
  • $4,038.86 / month for mortgage, tax, insurance.
  • $6,000 / annual maintenance fees.
  • $4,800 / Property Management Fees

Net Operating Income: $ 733.68

Cash on Cash Return: 0.006% (Terrible)

@Joshua Toste . Are you selling the property yourself? Are you using a broker?

One strategy for selling properties is to ask your broker to target investors on a 1031-exchange. These investors have a deadline to acquire the new asset. Sometimes, they are willing to buy at lower cap rate, rather than pay the taxes.

Originally posted by @Henri Meli :

@Joshua Toste . Are you selling the property yourself? Are you using a broker?

One strategy for selling properties is to ask your broker to target investors on a 1031-exchange. These investors have a deadline to acquire the new asset. Sometimes, they are willing to buy at lower cap rate, rather than pay the taxes.

 What an excellent idea. Haven't heard of this yet. 

Originally posted by @Henri Meli :

@Joshua Toste . Are you selling the property yourself? Are you using a broker?

One strategy for selling properties is to ask your broker to target investors on a 1031-exchange. These investors have a deadline to acquire the new asset. Sometimes, they are willing to buy at lower cap rate, rather than pay the taxes.

 I intend on selling the property through a broker specifically specializing in selling multi unit properties; Thank you for the insight as well!