Here’s the next podcast for making the most of your investments series!
Today Marcia and I are breaking down what it means to assess the value of your investment property. Listen in to learn how to make the most on the sale of your property!
Featuring:
René Nelson, Eugene commercial real estate broker
Marcia Edwards, Eugene residential real estate broker
Making the Most of Your Investment Properties – Part 7
Marcia Edwards: My goal today is to make sure that you understand as a seller how to sell for top dollar, even though it’s a seller’s market. That’s why we have René here to help us get there. René, we were talking about the cap rate, the market cap rate last program. Let’s just do a little nutshell on that first.
René Nelson: Okay, so the thing that I do when someone calls me and indicates that they’re interested in knowing what the value of their property is, I prepare a pinpoint price evaluation, and what I do there is I obtain a copy of their rent roll and the last three years of their profit and loss, and from there, I analyze and decipher the information and basically come up with the net operating income. Now it’s funny, Marcia, I’ve had people before say, “Oh well, my net operating income is $60.000,” but what they don’t know is I analyze their property as if I were a buyer, a lender, and a broker representing the buyer.
Marcia Edwards: Exactly. Other lenses, other than the seller’s lens, that’s critical.
René Nelson: Yes, because you have to factor in a 5% vacancy factor as an example, and sellers often miss that, they think I don’t have any vacancy, I’m 100% full.
Marcia Edwards: And it’s not going to raise the price, sales price of your property, by having the wrong numbers in the analysis. The analysis makes you successful in optimizing your investment because it will come around and bite you before closing if you don’t hit the evaluation accurately. What if the seller wants to sell but doesn’t want their property in the open market? Is there a way to do that and get the top price still?
René Nelson: Absolutely, that’s called the silent market. And the silent market is where I’ve analyzed a property, so we know what the market value is, or the most probable sales price, and then I basically reach out to other brokers that I know have similar buyers, I reach out to my own clients, and I just quietly put the word out there and say, “This property is available.” The reason that the silent market is important for sellers, a lot of times, they don’t want their tenants or their property manager to know it’s for sale.
Marcia Edwards: Exactly, and it takes the right person. I’m gonna throw this in here, it’s gotta be someone who has a pocket and an understanding in the marketplace as well as respect from their peers in the industry of residential multi-family investment sales. So René would be the right person to contact to get your name out… Your property out front without getting… Blowing your cover in the process.
If you’re looking to part with your investment property, René can help you make the most from your property’s sale. Schedule a 15-minute discovery call to better understand your investments and the market today.
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