Disposition Analysis

Before deciding to sell or exchange a multifamily property, an investor must consider multiple factors and circumstances during the sale process before deciding to sell or trade a multifamily property. Transaction variables such as the market value of a property, marketing strategy, and the objective for the sale proceeds need to be considered before the decision to sell is finalized. Southern California serves as one of the nation’s premier multifamily markets. Buyers in the marketplace are abundant and readily available. Concurrently, with the technology available to an investor today, exposure of multifamily property for sale can be done with or without a brokerage company. Our actual value to our clients is our ability to correctly price, package, and present an opportunity to the marketplace, maximizing the amount of interest and competition the sale opportunity receives from reliable buyers. Following the response from the market, we handle all phases of the deal, from the negotiation of the best possible price and terms available and the execution of a sales agreement between buyer and seller to the final transfer of the property, including all elements of the transaction such as the escrow process, property inspection, and post-close turnovers. If you are considering selling a multifamily property, please get in touch with us today for a free comprehensive analysis and discussion of the following.

Market Value Evaluation

Identifying the actual market value of a multifamily property is not a simple mathematical calculation, as some might suggest. A multifamily property’s market value can only be established after a carefully crafted message and opportunity presented to the marketplace has been created. The process of successfully drafting a story behind the sale of a property is a collaborative effort we share with our clients. Our clients have more incredible experience, knowledge, and foresight regarding their building than we, as a brokerage, can possess. We provide more unforgettable experiences, knowledge, and foresight regarding the marketplace. Through an open dialogue with our clients, we combine an understanding of their property with our understanding of crucial market metrics and trends to confidently attain the correct market value for a property. After concluding our market value analysis, we proceed with a cooperative process of discussing possible ways to increase or decrease our pricing suggestion with our clients.  

Marketing Strategy

Modern technology has significantly altered the multifamily investor marketplace. Before the multiple listing services available online today existed, a key element in need for a brokerage was simply the ability to provide proper exposure to the multifamily sale opportunity, as this was an arduous task for most multifamily investors. Technology has made getting orientation easier than ever, so an investor might think a brokerage is unnecessary. However, the opposite is true. A proper marketing strategy is critical to making a sales opportunity stand out and ensuring the best exposure to the right buyers. To create the best position for our clients, we consider and discuss other factors, such as sale confidentially, proposed transaction timing, and possible improvements to the property. Furthermore, as a response to opportunities expands, so must the Buyers' evaluation. Our role as a multifamily brokerage is to understand each inquiry, offer, question, and motivation buyers in the marketplace are directing toward selling an asset. Through controlled exposure, we first target the most probable Buyers in the market and move through a carefully structured process of adding potential Buyers to the equation, leading to a higher price and better terms for our clients.

The Objective of Sale Proceeds

Thankfully, most multifamily investors have appreciated their properties since they were initially purchased. The positive effect of appreciation on an investor’s equity is a significant benefit to owning the property, but it creates a new question for investors. Following the sale of a property, an investor must decide what will happen with the proceeds, including all the equity gains they have received since acquiring their property. Multiple options are available to investors, such as exchanges into more significant multifamily properties, commercial properties, out-of-state properties, and cash-outs, all of which are standard courses of action by multifamily investors. With our experience and knowledge of the 1031 exchange process and our partnerships with local CPAs that can answer an investor's tax questions, we are ideally suited to discuss and advise on different strategies available for the objective of the sale proceeds.

Tax and Legal Advice Disclaimer

LFA Multifamily does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on, for tax, legal, or accounting advice. You should consult your tax, legal, and accounting advisors before engaging in any transaction.