How to Sell Apartments
With strategic marketing, you can sell your own apartment building.
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Selling an apartment yourself follows a different process than doing a "for sale by owner" (FSBO) transaction on a house. Yard signs and the multiple listing service (MLS) are two tools that attract buyers to houses on the market. With an apartment building that's for sale, the owner may want to keep such news private so as to not scare away current tenants. In order to sell your apartment building, you'll have to create the marketing material, find potential buyers, and sell them on the positives of your property directly.
Locate potential buyers by identifying owners of similar apartments in a reasonable radius around your building. For a smaller building of 10 or fewer units, look in a 1- or 2-mile radius, and for 11 to 30 unit buildings look in a 2- to 4-mile radius. Contact your city's assessor to obtain a list of rental licenses, which will have the names and addresses of property owners. In certain cases, this type of information may be found online.
Spruce up your property for better curb appeal. At the very least, make cosmetic repairs to areas that experienced problems in the past. For example, paint over ceiling stains that formed as a result of a leaking roof that you have since fixed. Leaving such a stain will lead buyers to assume that you still have a leaky roof.
Create a marketing package and flyer for your property. The package must contain a description of the property, interior and exterior photos, a description of the area, and a description of the neighborhood's demographics. In addition, your package must contain a full underwriting of your property, including income and expenses that reflect an accurate capitalization rate.
Prevent your tenants from finding out that you're listing your building for sale. If they learn about your plans, they may assume a new landlord might raise rents, and you could face multiple vacancies before your building actually sells. Do not put a "For Sale" sign on your building's property, which will help keep your plans private.
Call prospective buyers from your database, and let them know that you're selling your building. Work with any interested buyer to consummate a sale. Ask uninterested buyers if they know someone who might want to buy your building.
Post your property on appropriate real estate websites once you have exhausted your buyer database. List your building's details on sites such as LoopNet, CityFeet and the CoStar Group. Craigslist is also a useful tool for selling small apartments in certain markets, but using it increases the risk that tenants will learn about the pending sale.
Take calls from brokers. When you list your property on the Internet, expect to receive multiple calls. While you may not want to list your property in such a public manner, the odds are that outside brokers will bring in additional buyers. Work with brokers, and pay them a commission if a sale results from one of their buyers. If you don't pay a commission, a broker will have the buyer pay him, which could lead to a reduction in the final sale price.
- Getting outside advice will help you properly underwrite and price your property. Buyers typically don't pay the asking price; they pay the price that the market dictates.
- If you need help during the final phases of the selling process, consult with a real estate attorney, who will protect your interests, write your contract, and work with the title company.
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About the Author
Solomon Poretsky has been writing since 1996 and has been published in a number of trade publications including the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." He holds a Bachelor of Arts, cum laude, from Columbia University and has extensive experience in the fields of financial services, real estate and technology.
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