Whether you’re looking to free up capital, ready to make a profit on your investment, or simply planning on the next chapter of your life, there are many moving parts that go into selling apartment buildings or multifamily properties. Taking steps to prepare for this sale could be the secret to a successful, seamless transaction.

Crank Up Curb Appeal

Fixing up the aesthetic appeal of your multifamily property doesn’t just make it look good, it can also go towards increasing the overall value. New paint, well-maintained landscaping, privacy fencing, and updated signage are all inexpensive yet impactful methods of adding curb appeal. However, think carefully about the time and money you invest in this — there could be something to be said about offering apartment buildings and complexes in as-is condition depending on the market conditions.

Get the Books in Order

This sounds like a no-brainer, but beyond curb appeal, your accounting is one of the first things potential buyers look at. If you don’t already have the following documentation on hand, make sure you get it together ASAP.

Profit and loss statements (2-3 years)
Rent roll
Leases
Recent upgrades and improvements (2 years)
Preliminary title report
Environmental reports (if available)
3 months of utility bills
Termite report
Property inspection report
Natural hazard disclosure report
Estoppel Certificates (if applicable)
List of vendors
Any material issues with respect to tenancy
Pictures of interior and exterior
Any as-built drawings or plans

These files help to identify any issues (on either side) before sales contracts are signed. The last thing anyone wants is surprises during escrow.

Max Out Maintenance

Major structural repairs to the property need to be prioritized, and if there’s still room in the budget, it’s a smart idea to take care of deferred maintenance you may have been putting off. Leaking roofs or plumbing, damaged siding, peeling paint, and safety hazards all need to be fixed so as not to scare off potential buyers. This is a great time to add any amenities or optional property features that could help the new owners increase occupancy or even rent prices.

Resolve Title Issues

Best-case scenario? You can easily resolve title issues should they exist without delaying or preventing the sale. The worst-case scenario is that you won’t be able to sell the apartment building property at all. Make sure that mortgage liens are fully removed, you’ve accounted for any prepay penalties, and cleared up judgments on the title. Consult with a property management and investment professional to help answer any questions you may have about the property title so that it’s clean heading into a sale.

Expound on an Exit Strategy

What are you planning to do with the proceeds of your multifamily or apartment property sale? Depending on the answer, you could choose a number of exit strategies. Think about your goals and priorities in life, in investing, and in your overall financial growth. Pick the exit planning strategy that works to meet and exceed those goals now and for years into the future. A few common options include:

Cash-out: Receive all proceeds from the sale as “free and clear” cash that you can then use towards another investment.
Seller financing: Owners are sometimes in the position to finance the property purchase on their own, allowing buyers a flexible payment plan.
Trust: If you’re looking to hold on to proceeds in a way that minimizes tax obligations, there are a variety of trusts that you can create after the sale.
Real estate exchanges: This involves taking your sales proceeds and reinvesting it into a bigger, more complex real estate investment.

Work With Experts

Even if you have experience selling property before, multifamily and apartment building sales can be a bit complicated and daunting. The best way to truly know how to navigate the system is by teaming up with a professional property management firm that has experience buying, selling, and managing these types of properties.

We are a commercial real estate investment firm specializing in buying, renovating, maintaining, and selling greatly improved multi-family properties. We seek multi-family properties for our investment portfolio, specifically affordable, mid-density, and high-density developments as well as government-subsidized projects working with local, state, and federal financing. Tell us your financial goals and we can help optimize the sales process for all parties involved — let’s talk more.