Who is my Buyer?
This simple question should be any owner’s first for any good multifamily property broker–NOT–”what will it sell for in today’s market?” The broker’s answer should be highly specific.
Any house/residential agent can do quick math and estimate a market valuation–and tell you a high market valuation number of what you want to hear. If you want to separate the wheat from the chaff, your broker must know off the top of his/her head the type of most likely buyer–professional investor or owner occupier and why. For instance, your broker/agent should be willing to insult you and tell you–”very small chance this 4 plex with these tenants in this condition will sell at a premium to an owner-occupier. Your AS-IS buyer is an investor who will want an X% cash on cash return in this submarket, thus your AS-IS market valuation is $Y. If you want to sell at a premium to an owner occupant, you need to first act on Z.”
If the property is a commercial apartment building (5+ units), the broker must be able to deliver on the spot–potential buyer’s first and last names who already own like-property and/or who are prequalified with the downpayment to buy immediately–yeah–that exact. If the broker or agent cannot answer “Who’s my Buyer?” with specifics–you are talking to the wrong agent/broker.
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-Brad Schaeppi, founder and CEO.