Selling 200+ Units (by Greg [WV]) Feb 2, 2023 12:47 PM|
Selling 200+ Units (by plenty [MO]) Feb 2, 2023 12:56 PM
Selling 200+ Units (by Still Learning [NH]) Feb 2, 2023 1:11 PM
Selling 200+ Units (by Ken [NY]) Feb 2, 2023 1:27 PM
Selling 200+ Units (by myob [GA]) Feb 2, 2023 1:48 PM
Selling 200+ Units (by Ray-N-Pa [PA]) Feb 2, 2023 1:56 PM
Selling 200+ Units (by Robert J [CA]) Feb 2, 2023 2:00 PM
Selling 200+ Units (by BRAD 20,000 [IN]) Feb 2, 2023 2:12 PM
Selling 200+ Units (by Dave [MO]) Feb 2, 2023 2:44 PM
Selling 200+ Units (by S i d [MO]) Feb 2, 2023 2:46 PM
Selling 200+ Units (by RB [TN]) Feb 2, 2023 4:17 PM
Selling 200+ Units (by Ned [AL]) Feb 2, 2023 10:31 PM
Selling 200+ Units (by BRAD 20,000 [IN]) Feb 3, 2023 1:05 AM
Selling 200+ Units (by myob [GA]) Feb 3, 2023 6:39 AM
Selling 200+ Units (by Greg [WV]) Feb 3, 2023 1:30 PM
Selling 200+ Units (by tryan [MA]) Feb 4, 2023 2:47 PM
Selling 200+ Units (by tryan [MA]) Feb 4, 2023 2:49 PM
Selling 200+ Units (by myob [GA]) Feb 4, 2023 3:16 PM
Selling 200+ Units (by Jeffrey [VA]) Feb 4, 2023 4:25 PM
Selling 200+ Units (by MMIT [VA]) Feb 6, 2023 10:04 PM
Selling 200+ Units (by Rich [PA]) Feb 27, 2023 3:22 PM
Selling 200+ Units (by Greg [WV]) Posted on: Feb 2, 2023 12:47 PM
Good afternoon…seeking some “how should I sell”opinions. My wife and I are considering selling 203 units which are a mix of 12 SFH’s and many multi family duplex, triplexes, one 7 unit, one 12 unit, one 18 unit buildings etc. all located in close proximity in college town. Have had great success over the past 21 years with these properties and have onsite in-house management established. We are getting older but still relatively young and want to travel to see our kids, travel overseas, and basically hang up the responsibility of owning our business. I’m going to research cap rates but I believe I’ll be pricing the properties in the 8% Cap Rate range which around a $16 to $17 million dollar deal. Properties grossed over $2.1 million last year in revenue. We are located close to campus (Marshall University in Huntington, WV) by beautiful Ritter Park which is the #1 thing to do on Trip Advisor and have steady flow of great tenants over the years. I’m not sure if I should use a Broker or just list the deal myself on loopnet. I have the ability to market the properties. If I hire a local broker, I’m concerned I may not get a lot out of it for what it may cost. We don’t need to sell but are definitely at a point where we have achieved what we wanted to out of our business and grandkids will be in our future soon. Our kids don’t want to be a part of our business or else I wouldn’t be considering selling. Best case would be to find one investor and sell everything versus having to sell different properties to different smaller investors. There are numerous advantages to keeping the properties forever which is why selling is a difficult decision but we are only “somewhat” young once and the opportunity to sell would be worth it. Thanks for any thoughts and possible suggestions for advantages of using a local or regional broker to sell by owner etc. --73.152.xxx.xxx
Selling 200+ Units (by plenty [MO]) Posted on: Feb 2, 2023 12:56 PM
Just my two cents worth, but it would seem to me the buyer of single family homes is not the same buyer for a huge multi family. I would talk to a few agents and get some input. I'm sure others will come along here with some insights. --172.58.xxx.xxx
Selling 200+ Units (by Still Learning [NH]) Posted on: Feb 2, 2023 1:11 PM
You could also break it up into groups. We were looking at a twelve unit once but they bundled 2 other smaller/older duplex and quad into the deal. We put an offer on the 12 but someone else agreed to buy all 3 so we lost out. Look on loop net to see who is advertising and call them. Talk to several. I just went through the process in deciding if I was continuing or selling. The group I thought was buttoned up lowballed what they would list at. A similar multi to mine came on and I spoke with the listing agent, he had a much better handle on the local market compared to the other larger group. Good luck and congratulations! --174.196.xxx.xxx
Selling 200+ Units (by Ken [NY]) Posted on: Feb 2, 2023 1:27 PM
best prices you will get it sell them individually,list a few at a time --74.77.xx.xx
Selling 200+ Units (by myob [GA]) Posted on: Feb 2, 2023 1:48 PM
Thats very impressive portfolio. I for one will tell you to stay away from anyone looking to bundle this for you. They bundle at an agreed to price and then wham you for 30% less then agreed. They aren't the purchaser mind you-- they bundle for others (like folks in NYC- 36th floor penn station building)DON'T WASTE YOUR TIME DEALING WITH THESE SCAMMERS)
I like the concept of suggestion to break them out. SFH's and then multi. You arfe more then experienced in dealing with offers from your portfolio.
Any chance you have an atty you deal with that also does closing for large purchasers? I would try to find that group of atty's who do package deals. You'll probable have to call several to find the right one to talk to or put on retainer.
Keep us informed will you?
Greg I'm sure all here would love to hear your story if you have time. How you started. How long you been doing this and some investing storys-- I'm confident you must have a bunch. --108.239.xx.xx
Selling 200+ Units (by Ray-N-Pa [PA]) Posted on: Feb 2, 2023 1:56 PM
Too bad these units are not in Northern WV. I am actively looking for a replacement property/properties for a 1031 that I have going on now. Huntington is too far away from me --24.101.xxx.xxx
Selling 200+ Units (by Robert J [CA]) Posted on: Feb 2, 2023 2:00 PM
When I was selling a bunch of SFR and a couple of apartment buildings, only around 50 apartment units total, I made a plan based on "what I wanted to do with the Money".
With my Single Family Homes, I decided to sell them and carry back the first mortgage with a pre-payment penalty of 6 month un-earned interest.
Because I sold the house myself, there was no Listing or Selling agent commissions. I simply ran an add in the local news paper (This is before the internet took off and everyone had their own computer).
In my add I said, "Seller Financing with a buyers 15% down payment. Easy to qualify. Why pay rent when you can own a home of your own"!
My phone would not stop ringing. Since I had 5 houses I wanted to sell, I used the same add to show the interested party's my other properties once one was sold.
I was asking full market price, no discounts because I did not charge points for financing the whole thing. I saved the 6% commission so I could ask for only 15% down. But I had an impound account to cover the insurance and taxes. This way I could make sure there was insurance and it was paid. I was named as the mortgage holder and a payee for any claims.
With my apartments, I got a large broker with lots of minions to do cold calling. They were wroth their commission.
Sell and carrying back the mortgage saved my for having to pay a million dollars in long term capital gains tax, state tax and the recapture right away. Since most mortgage payments for the first 10 years is mostly interest.
By carrying back the mortgage I was making interest on the 85% I carried back. If I sold the property and got cash. I'd pay around 40% in taxes and only earn a lower interest rate on 60% of the total funds. So I was earning on 25% more money by carrying the loan. --47.149.xxx.x
Selling 200+ Units (by BRAD 20,000 [IN]) Posted on: Feb 2, 2023 2:12 PM
Congrats on a great portfolio. Everyday Millionaire!
For sure look at 1031 Exchange or get killed with taxes. Sell a chunk and buy a triple net lease warehouse. Still have income but no responsibilities. Repeat.
Learn at apiexchange.com - the company I use.
I looked at buying (thru a 1031 exchange) a Home Depot and some medical buildings. I figure they will be around paying rent for a while. Nursing home biz is growing with the Silver Tsunami. MANY large, stable businesses do not own their buildings.
Make money while you vacation!
Selling 200+ Units (by Dave [MO]) Posted on: Feb 2, 2023 2:44 PM
Very impressive portfolio. Without knowing what the 12 single families properties look like or neighborhoods they are located in. I would focus on the retail home buyer with a conventional loan and letter of loan approval from a bank. More than likely you will have to spend money on updates and improvements in order to hit the retail buyer.
Your 8% cap on multis seems like a good market value with in house management.
Loopnet would be a good listing site for all multi family.
Do you belong to a local REI or a L.L. association?
Like MYOB asked. I would like to hear your story? --173.47.xxx.xxx
Selling 200+ Units (by S i d [MO]) Posted on: Feb 2, 2023 2:46 PM
As plenty says, your portfolio reminds me of my own: a weird mix of "a little of this and a bit of that."
That pretty much eliminated institution investors for the the entire package, though they might be interested in your 18 units.
The other side of the coin is few "Ma and Pa" landlords are equipped to go from a handful to 200+ in a very short timeframe.
So... this limits your options.
If I were in your shoes, I wouldn't want to make this a huge hassle. As much work as it took to BUY 200+ properties, it's going to take at least that much hassle to SELL unless we get creative with how the listings are put together to attract qualified buyers who won't nitpick you to death.
My suggestion is break them up into manageable chucks of between 10-30 properties per batch. Mix the best units in with the worst so you don't end up with someone cherry-picking out all the best ones and leaving you with the dumps that linger on the market forever. Make is a "take all or take none" deal.
The price-points of 10-30 properties should help save you from inexperienced looky loos fresh out of some guru seminar who just want to crawl through your houses and disrupt your tenants, all to find out after countless wasted hours that they want to low-ball you and demand owner financing on top of it. By that same token 10-30 properties is probably in the ball park for loose cash from other successful investors who can eyeball the package and know pretty well straight up if it's worth it or not and have access to a pool of cash.
But then again, it really depends on your goals. If you just hate day-to-day management, have you thought about keeping them and hiring a good property manager? Can't find one? Maybe train one yourself!
One trick I found is pricing packages around the 1% Rule. So $50K of rents would be priced at $5 million, etc. This should be enough to attract serious investors. They don't call it the "1% Rule" for no reason: investors know it and realize that's as fair a deal as one often finds when there's a large number of units, and they'll cash flow okay too.
What is your plan for the proceeds? 1031 into something bigger with less hassle? Maybe a triple net (NNN) lease building like a doctor's office or nation-wide chain would rent, and all you do is pick up the check each month? Cruise the world for 5 years?
We really need to know more about your goals and how much hassle you're willing to deal with. --184.4.xx.xx
Selling 200+ Units (by RB [TN]) Posted on: Feb 2, 2023 4:17 PM
Welcome to the sellers club.
Selling 200+ Units (by Ned [AL]) Posted on: Feb 2, 2023 10:31 PM
What Sid said. --70.92.xx.xx
Selling 200+ Units (by BRAD 20,000 [IN]) Posted on: Feb 3, 2023 1:05 AM
I don't know if the hedge funds are still buying but a few months ago I was contacted by 2 major buyers (45,000 homes nationwide, buying 1,000 per WEEK!). They each wanted at least 100 of my rentals.
Their quick estimate was to pay cash, use the Zillow Price minus 6% commission and a few more percentage off for volume prices.
I asked if they had the money and he replied "billions".
Selling 200+ Units (by myob [GA]) Posted on: Feb 3, 2023 6:39 AM
Greg please read my post the first paragraph.
As mentioned above these scammers are advertising buying 1000's-- there scam artists and after you spend 45 or 60 days thinking it's going through they pull the rug. There escape clause: DUE DILIGENCE allows them to get out of any offer.
As I said in my post they may be buying/stealing from mom and pops out there. --108.239.xx.xx
Selling 200+ Units (by Greg [WV]) Posted on: Feb 3, 2023 1:30 PM
Thanks for all of the great responses. I really appreciate the comments and will definitely take them into consideration. We started small when I was 31 years old and slowly grew from our initial purchase of a duplex, triplex, and SFH w/garage apartment at same time with little money down (back then I borrowed money on appraised value). Then bought 12 unit BLDG after 2 years of learning the ropes. Steadily bought more properties over the past 21 years. Never intended to reach a certain number of units. I always worked and had a 30 year military career and my wife managed the day to day activities of our business. We got a full time employee when we got to around 70 units. We now have 5 employees who help us and I retired from the military. We like to take care of the marketing and showing of the properties to ensure they get rented and our team takes care of the properties and Residents. It’s worked well for us, just have to ask yourself how long do you want to do it and think about the exit strategy which includes keeping them forever which we always kind of settle into. Interesting decision as the business remains lucrative but it would be nice to travel the world with no headaches. 1031’ing into Triple Net lease would be ideal but will take some planning and also challenges since i likely will have to sell in small chunks. Also selling in smaller chunks affects my employees if it takes several years to sell everything, I may have to lay people off along the way. Just things I’m thinking about. I think Sid provided the most likely course of action for someone like me. Would love to find that one buyer for everything but doesn’t look like that is very realistic and I’m not versed on what institutional buyers are limited to buying. Will also take a look into the Hedge Funds and investigate with caution as myob advised. Thanks to everyone again and have a great weekend! --73.152.xxx.xxx
Selling 200+ Units (by tryan [MA]) Posted on: Feb 4, 2023 2:47 PM
You take a bigger "hit" selling to one investor than a broker will charge to list them individually.
My 2 cents. --206.84.xx.xxx
Selling 200+ Units (by tryan [MA]) Posted on: Feb 4, 2023 2:49 PM
Tell the broker you're only paying a 4% commission .... only a fool would pass that up on 200+ sales. --206.84.xx.xxx
Selling 200+ Units (by myob [GA]) Posted on: Feb 4, 2023 3:16 PM
an institutional outfit will have their own closing atty. You need one on retainer to be your sounding board. --108.239.xx.xx
Selling 200+ Units (by Jeffrey [VA]) Posted on: Feb 4, 2023 4:25 PM
When you are at the point of accepting offers, require that part of the earnest money (at least a few to several thousand} be non-refundable. That will help cover your nuisance cost during due diligence period, attorney review of the offer, and most importantly, keep the looky loos, seminar graduates and non-serious buyers from wasting your time. --172.58.xxx.xx
Selling 200+ Units (by MMIT [VA]) Posted on: Feb 6, 2023 10:04 PM
The first and most important thing you need to do is talk to a good real estate tax lawyer/cpa.
We have lots of good ideas in this group, but, selling 200 doors puts you in a completely different class from most of us.
The guy doing your taxes this year might be great, but, he is not the guy you need to structure a sale of this size.
You did not work this hard to write a multimillion dollar check to the irs.
A sale like yours will involve a very specialized skill set.
A good real estate tax lawyer will structure the sale in such a way that you will pay the least amount of taxes legally possible.
They will be very expensive, but, they will literally save you millions.
I would talk to several lawyers before choosing one.
You could start with John Hyre. John is a lawyer and cpa who specializes in real estate and minimizing tax liability. He has talked at a couple of the Mr Landlord conversations.
Let me know if you want another name.
Once you figure out how to pay the least amount of taxes legally, the next part of this is figuring out what type of legacy you want to create with this wealth. Do you want to give it to your kids or do you want to set up a multi generational legacy fund/trust or create and fund your own charity?
Congratulations and enjoy your success! --70.188.xx.xxx
Selling 200+ Units (by Rich [PA]) Posted on: Feb 27, 2023 3:22 PM
I have a successful friend who made a handsome profit off of an IT business he built up and sold. When he cashed out, he gave each of his managers a million dollar "Thank You" bonus. He said he never would have made it without their help. I have always thought it was an especially classy and thoughtful move.
Have you considered selling some of your properties to your 5 employees at a price that would work for you and set them up for success? --74.98.xxx.xxx