Real Estate News and Market Moves Week 80

Unlocking a Successful Portfolio Sales Strategy

Our second post in the series features Chris DeTreville, Auben Columbia’s Market Sales Manager. Click here to read Part One of the series.

Selling a portfolio of assets in the real estate market presents a unique set of challenges and opportunities. As an investor, you need to navigate a complex landscape, where each property represents not just a financial investment but also a strategic component of your overall portfolio. Working with an experienced investor agent can be invaluable in this process. These professionals specialize in understanding the nuances of offers and negotiations, ensuring you achieve the best possible outcomes for each asset, or bundle of assets, while maintaining a cohesive strategy. From closing the sale to managing post-sale considerations, the right agent will guide you through each phase, helping you maximize value and streamline the transition. Chris DeTreville, Market Sales Manager in Auben’s Columbia market, joins us this week to share his insights as an investor himself and as an agent experienced SFR and small Multifamily portfolio sales.

The Importance of Your Network as an Investor Agent

As a fresh real estate agent just out of college, I was immediately tasked by my Broker in Charge to compile a list of at least 100 contacts. This would be my first client list that I would use to cold call, send out mailers, and track. It was no coincidence that was my very first task; your network is extremely important in sales. As my career progressed and I became more interested in the investing side of real estate, my network became increasingly beneficial. By attending local investor meetups, joining investor forums, and being involved in the sale of rental properties over the years, that list has grown to a substantial number of buyers, sellers, institutions, and fellow agents. When these contacts know that you are an investor agent, your deal flow increases and buyers monitor your activity. Having this network greatly enhances your ability to move a portfolio.

Selling Your Portfolio with an Investor Agent

Your investor agent should understand your very specific needs when it comes to selling your portfolio. Many seller clients we come across do not know exactly what they want to accomplish when they first come to us. As we discuss the history of the portfolio and the client’s future needs, we can usually help determine a path forward that attains their goals. There are many things to consider like pricing, capital gains exposure, timing, among others. But we find that there is an emotional element that has to be considered that is as important as the financial elements. For many investors that are selling, this is the culmination of their life’s work. There are long term relationships with vendors and tenants that they will be ending. We understand and help navigate these elements of the deal that a normal broker may not consider.

All of these considerations must be accounted for to successfully navigate negotiations. While a buyer may be looking at the numbers only, the seller may be concerned that the new buyer won’t use their HVAC vendor in the future. While this type of emotional response can be frustrating for everyone, a seasoned investor agent will be able to effectively deal with the situation.

Avoiding Pitfalls from Negotiation to Closing

Investor agents must recognize the various pitfalls that can emerge during the negotiation and closing phases. For example, how do we navigate due diligence for occupied units? Once due diligence is completed, are appraisals required, and what is the process for conducting them? In the case of larger portfolios, coordinating access with tenants can be particularly challenging and may lead to delays in closing. Additionally, what occurs if one or more tenants fail to pay rent in the month of closing? How should security deposits be managed? These are critical considerations, and our team has the experience necessary to effectively address each of these challenges.

At the end of the day, every seller has different needs. While many similar themes tend to rise to the surface, there are always those intricacies of the deal that an investor agent will need to navigate. Having someone like that alongside you should be a key consideration when you determine you are going to sell.