Understanding How & Why Buildings Are Categorized
Updated: Mar 10
Below are common categories used to distinguish multifamily buildings. Buyers are often looking to purchase a specific type of property, and care more about the type of deal than the location or price. Understanding what type of building you own allows us to anticipate the probable Buyer profile, know where to focus marketing efforts, and how to structure the sale. The saying "one man's trash is another man's treasure" reminds us of the power of strategic marketing - one of my strengths.
I know how to effectively market all types of buildings in a way that speaks to the likely Buyer profile and conveys why they can't afford to pass up buying your building. My tailored marketing plans create competition among top Buyers and generate multiple offers when priced correctly. This positions my Sellers to command a higher price and more favorable terms. It pays to hire me to sell your property!
"PRIDE OF OWNERSHIP"
Property is extensively remodeled or new construction and appears pristine. Rents are at or near market. Location is highly desirable. Usually easy to finance.
Probable Buyers: 1031 Buyers, first time investors, Buyers (often retirees or those that work full time) looking for an "easy" property, and high net worth families hedging against inflation.
(Photo is 1306 Waterloo St, Los Angeles, CA 90026. Sold in March 2020 by Dana Coronado)
Property is in above average condition, fully leased, no tenant or management issues, no significant deferred maintenance. Usually easy to finance.
Probable Buyers: Same as pride of ownership, plus nearby owners building their portfolio.
(Photo is 1167 Bellevue Ave, Los Angeles, CA 90012. Sold in June 2017 by Dana Coronado)
Property usually has low rents and/or deferred maintenance. Usually owned 20+ years and loosely managed. Often missing leases, P&L, etc. Might have higher than average vacancy, and tenants don't always pay on time. Cash and bridge loans are common.
Probable Buyers: Young, aggressive and well capitalized individuals, families and funds, 1031 Buyers, nearby owners.
(Photo is 2135 Bellevue Ave, Los Angeles, CA 90026. Sold in May 2019 by Dana Coronado)
Property requires a full rehab (down to the studs) and may have significant issues such as foundation, structural, non-conforming units, REAP, hostile tenants, legal or title issues. Cannot be financed with a traditional loan, so cash and bridge loans are common.
Probable Buyers: Experienced rehabbers, 1031 Buyers, well capitalized individuals, families, and funds.
(Photo is 370 Patton St, Los Angeles, CA 90026. Sold in April 2020 by Dana Coronado)
Have questions? Not sure where your building falls or what type of property is right for your next acquisition? I'd love to chat with you in depth about it. Give me a call at 310-562-9630.