How to present this off market deal to my Buyers?

4 Replies

I am an agent in North-East Georgia and I have an off market apartment complex that a colleague of mine is trying to sell. I have a few interested buyers and the owner sent me the info about the property (rent roll, projected expenses, etc.) and I am trying to write a report of what has been done during renovations and the cap rate and all other important information that would be useful to the buyers to determine if it will be a good deal for them. Its turn key after the renovations so I want them to be able to see my report and know whats been done and what kind of returns they will get.

So my question is other that cap rate, potential cash-on-cash return and the renovations that have been done what is some other good and useful information I could provide to my buyers to make it way easier for them to evaluate this deal?

@Alexander Jenkins , hi and welcome to BP!

Okay, you said the magic word.... "agent." As you know, a real estate agent means one must, by law, act in their client's best interest in regard to this property. Is your colleague 100% certain, beyond a shadow of a doubt, that selling a property off market is in his client's best interest? Logic and economics 101 says your colleague should list the property on the MLS: more exposure almost always = higher sale price and/or better terms for the Seller.

Btw, I realize it is probably in your client's best interest to buy off market, but do you carry any responsibility for acting ethically in a deal that could come in front of a judge?  I think at minimum your colleague would have to do a full comparative market analysis, show the Sellers what their property is worth on the open market if advertised property, and have them review the paperwork with their attorney and sign off that they are willing to sell it off market.  That might be sufficient courtroom evidence to show they were fully informed of their asset's value, but they still chose to act contrary to their own best interest and against the advice of legal counsel.  In that case, at least both of you as agents would have crossed the "t's" and dotted the "i's".

You'll have to make the call, and I'm not here to accuse anyone.  But, personally I cannot see how the words "off market" and "agent" can logically exist in the same sentence.  It's one of the curses of the profession: everything has to be 100% by the book and avoid even the appearance of impropriety, much less have any actual back room dealing going on.  Sounds like a pocket listing scenario.  I know those happen.  But I doubt they fulfill the "sniff test" of fiduciary responsibility.  Just watch out for yourself and your client.  Could get messy fast if the Sellers ever decide they were not fairly represented.

I hope this helps.  Good luck!

Originally posted by @Alexander Jenkins :

I am an agent in North-East Georgia and I have an off market apartment complex that a colleague of mine is trying to sell. I have a few interested buyers and the owner sent me the info about the property (rent roll, projected expenses, etc.) and I am trying to write a report of what has been done during renovations and the cap rate and all other important information that would be useful to the buyers to determine if it will be a good deal for them. Its turn key after the renovations so I want them to be able to see my report and know whats been done and what kind of returns they will get.

So my question is other that cap rate, potential cash-on-cash return and the renovations that have been done what is some other good and useful information I could provide to my buyers to make it way easier for them to evaluate this deal?

Take a look at some Cushman & Wakefield OM for similar properties. They do a great job of putting them together.