Selling a multi family property is a completely different ball game then selling a regular residential home with ‘the white picket fence.’ Multi family investing is a business (key word there), and it should be treated as such when buying or selling.
A common mistake your ‘every day Joe’ realtor fails to realize.
NEVER Hire A ‘Regular’ Realtor To Sell A Multi Family Property!
But it’s not their fault! They normally don’t play in the investor ‘sandbox.’ They also often aren’t even sophisticated investor’s themselves (BIG problem!).
They’re used to selling to typical home buyers or sellers for a living . So we can’t be too hard on them.
However, if you hire the every day realtor to sell your multi family property, you could be leaving money on the table. Here are three top reasons why you should NEVER hire a ‘regular’ realtor.
1 – You Can’t Market Multi Family Properties The Same
The most common mistake I see on MLS are when realtors try and sell a Tri-plex for example, the same way they would sell a single family home.
The end buyer doesn’t care much about the ‘nicely landscaped lawn’ and ‘neutral colours in the living room!’ All they care about first is MONEY!!
“Does this property make money? Yes or no?”
That’s the question they’re asking themselves when first looking at a listing. Remember, investor buyers rarely buy on emotions, it’s just financial business.
What’s the current and potential tenant quality? Is there room to increase rents with strategic renovations and marketing tactics for new tenants (something I help my clients with ALL the time)?
These are the questions a seasoned investor savvy realtor will be answering in their marketing to entice buyers.
It seems obvious but unless a realtor deals with investment properties regularly (preferably FULL TIME!), they won’t really understand the type of marketing that is required for multi family investment properties.
2 – They Don’t Understand Cash Flow
The second biggest mistake I see regular realtors doing on their MLS listings is NOT putting up accurate financials (or ANY at all!!). This is a HUGE no, no!
Again, savvy investor buyers are pre-screening listings in five minutes or less by running quick numbers to find out if the property will make money. This is step one before doing further due-diligence on MLS listings.
If some of the financials are missing, or not posted at all, how do you expect an interested buyer to call the listing agent to buy your multi family building?
How do you expect a buyers agent to run the numbers and send it to their clients for review?
I see multi family properties sit and sit and sit on the market for months simply because no one knows if the damn thing cash flows or not!
Again, regular realtors just don’t understand this. They think if they list the property on MLS that buyers will just come as they do on residential single family homes. This is just NOT the case!
3 – They Don’t Have A Network of Investor Buyers Ready
If you’re listing your building with a savvy investment specialized realtor, they often have a large list of investor buyers waiting to get deals from them. Remember, investor’s rarely buy just one property like their regular home buyer counterparts.
Investor’s are always ready to buy and if you list your building with an investor savvy realtor, they can send your property to their list (with all the numbers, graphs and charts that investor buyers LOVE) to get first crack at before it even hits the MLS.
It’s not rare for a specialized realtor to sell a multi family property to one of their buyers before it even hits the MLS. And it’s simply because they understand how to package a multi family deal!
I know, I know, your friend or family member is a realtor and you would just feel horrible if you didn’t hire them. I hear ya.
But you can see how important it is to hire the right realtor when selling a multi family building. It’s crucial to your profit! A lot of money and time can be lost by hiring the wrong realtor to help you, as you saw above.
But if you still don’t think it’s that important to hire a specialized realtor for the job, let me ask you something.
Would you hire a general family surgeon to perform heart surgery on you? Or would you hire a mechanic who specializes in Mercedes cars to replace the transmission on your Ford?
While it’s both ‘kind of‘ in their expertise and field, they wouldn’t be efficient for you. It would take time, there would be mistakes made and the whole process wouldn’t be smooth.
The same goes when selling real estate.
The regular realtor COULD figure it out and MAYBE do an okay job … but why settle for ‘okay’ when selling one of the largest financial assets in your life and business? It’s crazy to me, yet I see people do it all of the time.
I hope you see the importance of these tips and how it can make you money and cause less stress for you. Remember, investing (or selling) a multi family property is a business – period.
As the CEO of your business (if you’re an investor, yes, you are the CEO of your business), you need to make smart decisions. And your first one is to work with the right people!
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