It’s Economics 101, a simple case of supply and demand. But a lot of apartment building owners are missing the lesson—and the windfall that could be theirs.
Here are the basics: near-record-low interest rates, a dearth of multifamily properties on the market, and a red-hot demand for them. As we’ve been telling our clients who own multifamily buildings for months, that’s the perfect set-up to score an impressive profit.
One client did take our advice, and it paid off in a big way!
In the spring of 2016 we at the Thomas Duke Company put our marketing experience to work to sell this 36-unit apartment property in Oxford, MI, an area near the metro Detroit hotbed. When we asked over $51,000 per unit we knew we were pushing market rates. But we also knew where this market was trending, and we had confidence in our experience and marketing skills.
And we were right! Our marketing brought in hundreds of investor leads and more than a dozen offers. Not only that. Just as we anticipated, the market kept trending upward, allowing us to negotiate a strong offer with a highly qualified investor willing to pay over $49,000 per unit. This price ranks as one of the highest ever paid for a comparable apartment building in northern Oakland County.
Since closing this transaction, we’ve had numerous phone calls from investors who showed an early interest in the property. They walked away because they thought the building was overpriced. Now they’re telling us they wish they’d bought it when they had the chance!
Lender interest rates are creeping up—meaning the perfect conditions for scoring big profits on multifamily property sales won’t last. We hope you’ll take our advice too. The time to sell is now! If you would like to know more about this transaction or sit down for a free consultation about your property, call us today.