1. Get all your financials documents updated and organized.
Smart and Savvy buyers assume the worst from a Seller or Property. Sellers must have updated and detailed Rent Rolls, Tenant Ledgers, P&Ls, and list of work and dates of capital expenditures.
2. Notice to vacate problem tenants.
If tenants are committing any lease violation–be it behind in rent, too many occupants, not picking up their unit, produce and deliver a written to vacate (if on month to month or 2 months prior to lease termination). Even that small step will alert Buyers to the fact that by the time closing rolls around, they likely won’t have to deal with a bad apple left over from the Seller.
3. Re-tenant any vacant units at higher rent (if at all possible).
Even 1 or 2 leases with a higher monthly rent alert the Buyer that they can pro-forma or assume the market rent is higher than what maybe the case in a majority of the units at the Property. Talk is cheap “I know the market rent is higher.” Buyers trust in-place rent. Their quick rebuttal to higher market rent is simply–“Well, why hasn’t the Seller done that himself/herself?”
4. Clean Up the basement and outside.
Yeah, I know. This sounds obvious and simple. That said–you need to first notice tenants that all non-claimed/removed items from the interior and common exterior will be thrown away as of an effective date (say 1 week from posting in common area). What you think is trash–might actually be something not abandoned and valued by a tenant. The Buyer does not want to pay hundreds for labor and haul off costs of basements and garages full of abandoned stuff. Save yourself money and have tenants clean up on their dime.
5. Be honest and disclose any material/major deferred maintenance item.
I’ve found through experience it is better to “draw the poison” or hit the issue that can kill a deal at the last minute ahead of time. A Buyer is either going to inspect the property himself/herself, have someone else do it, or sue you for not disclosing a material fact about a property. Just put the issue on the table (leaky roof, etc.), allow the broker to get ahead of the issue with some estimates, and disclose it to the Buyer. You want to enjoy your gain after closing, not get a call or a summons from an unhappy Buyer.
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-Brad Schaeppi, founder and CEO.