Even though investing in an apartment is a long-term commitment, certain strategies and habits are implemented by successful apartment owners that have literally meant thousands of dollars more in income at the closing table.
1. THEY DEVELOP AN EXIT STRATEGY - BEFORE THEY DECIDE TO SELL!
Every real estate asset must have an exit strategy. Ideally, you need to devise a plan BEFORE YOU DECIDE TO SELL. Most owners know what they plan on doing when putting the property on the market, but tend to take a "wait and see" attitude toward the process. This often costs you money. Smart owners have a plan when they sell, including price, terms, possession dates, tax pro-rations, maximum contingencies, closing dates, and consideration of a tax deferred exchange. Owners who do not have this kind of plan, and the resolve to stick to it, are asking for trouble.
2. ACT GREEDY
The owners that I have worked with that have gotten thousands more for their apartments, have had an attitude of "if it sells, fine, if not, no big deal". But, before you put a price on your property that is twice and much as it's worth, reconsider. The key is pricing the property right in the first place. What this tactic can do, when used correctly, is generate multiple offers for your property. With this kind of attitude, you can be coy and let the buyers battle it out for your property, while letting the price obtained go up in the process. Acting as if your property is the best deal out there frequently convinces buyers to believe this as well. Critical to this kind of strategy is to price the property right, and have the property in very saleable condition. Also, and this can be VERY important, smart sellers find out why the buyer is buying in the first place. Some buyers or their representatives make a huge mistake by saying that the reason they are buying is to complete a 1031 tax deferred exchange, and disclose that they have 14 days to identify a property. What great leverage for the seller! If you have a buyer who has to buy when making an offer on your property, you can frequently get a lot more in the negotiations.
3. MARKET THE PROPERTY AT THE RIGHT TIME.
This is Key! Would you prefer one offer, or three or four different buyers competing for your property. If you can set the tone and create an auction atmosphere, you will make more money. The objective is to get the property in front of the hottest buyers at the same time. Today's buyer may be out of the market tomorrow. Knowing when buyers are "hot" can be very useful information.
4. USE SPECIALIZED PROFESSIONALS
As a rule, effective apartment investors use Realtors for advice and assistance in buying and selling their projects. Effective owners realize that Realtors, specializing in apartment transactions, bring value to the table and enhance the bottom line. A Realtor who is showing single-family houses on Sunday does not offer the same service needed to buy a 100-unit project on Monday. The best Brokers for apartment owners are those who specialize in apartments, and ideally have some certified proof of competence like an MBA or CCIM designation. They should also have completed numerous deals and done exchanges. The same concept applies to attorneys and tax advisors. The up-front costs may seem more, but the long-term wealth
benefits they add far outweigh these costs. (continued on next page)