When you are preparing to sell a MultiFamily, Here are 8 things you should do to ensure a smooth transition and to limit surprises.
- Hire a Certified Professional Accountant (CPA) who is well versed in real estate. You want to know what your tax consequences are when you sell. There are capital gains taxes associated and you want to know next steps before you begin the process.
- Talk to a Realtor who is familiar with your area and multi-family homes. It is not just about listing your home, they need to understand the intricacies of a multi-family and how rent, condition, location etc affects the value. Is it a buyer's market or a seller's market?
- Does it make sense to sell as condos? Boston is experiencing a real estate boom and oftentimes in some neighborhoods, it is more profitable to divide the property and sell as condos as opposed to selling as a multi-family.
- Informing tenants of the sale. You want to inform them as early as possible. You want to be respectful of your relationship because a disgruntled tenant can hinder the sale of your property. You want their cooperation in coordinating showings, assist them in providing information for relocating.
- Gather property Financials. Buyers want to know the additional cost associated with the property so they know if the numbers make sense
- Gather tenant lease information. The buyer will want to see the lease agreements. When do leases expire? Are they market rent rates or below market rents?
- Fix any major and minor repairs in the home. You want the building in the best shape possible as first impressions are lasting. Also, home inspections are a time to renegotiate the price. If you do not want to renegotiate the price, repair as much as you can that makes sense (discuss with a realtor) so that you get the strongest offers.
- Connect with a real estate attorney. You want to ensure your best interests are protected.