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December 2, 2019

Maple Manor Apartments Sold in Walled Lake.

Yes, apartment sales are hot right now. But that doesn’t mean multi-family properties sell themselves. They need smart marketing to realize their full sale potential.

Maple Manor in Walled Lake had a very stable history of occupancy. Some tenants had lived there for as long as 20 years. For quite some time the owners of the 32-unit complex had not raised rents to market levels. As a result, the valuation of the property was tricky. The price per unit was in line with the local multi-family market, but based on comparable sales data, the capitalization rate was low.

The “cap rate”—the property’s net operating income divided by the purchase price to give a percentage return on investment—is generally the first metric buyers use to decide if their investment makes sense. It only works with cash purchases, so it’s not the best valuation method, but investors refer to it nonetheless.

With a significant gap between the realized rental income and what the market would command, Eric Szerlag saw that the smart way to market Maple Manor was as a “value add” opportunity. As his main sales pitch he pointed to the large gains to be made if rents were brought to market value.

Eric’s pitch hit the market pulse. Within the first three weeks, 27 potential purchasers made offers. Eric and the owner chose a local investor who could reliably come to a smooth close.

Even in a hot market, a sale doesn’t maximize itself. That takes tools, like the Duke Company’s database of more than 2350 apartment owners and investors, and the focused hard work and insight of brokers like Eric Szerlag. Call us today. We’ll help you realize your property’s sale potential.

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