Sell my Apartment Building
With all this recent uncertainty with a state wide moratorium on evictions, Covid-19 (Corona Virus) and the never ending cycles of Rent Control initiatives in California (See new 2020 rent control measure) you’ve probably thought about it long and hard,and time has come to sell your apartment building. It’s definitely not an easy decision to make. Months and even years of thought has gone into this. And the time has come to sell the building. There are many reasons why apartment building owners sell their building. Many of them are personal, it could be related to health, family issues, retirement and so forth.
Some apartment building owners want to trade up, often called an up leg , they will sell their apartment building and by another apartment building with more units, for example selling a 10 unit apartment building for 20 unit apartment building.
Trading up requires selling your current building and using a tax deferred strategy called the 1031 exchange. This can make a lot of sense, especially if there is a lot of equity sitting in the building unused that could be put to better use and higher yielding returns.
Some owners just want to trade down and get an apartment building that is smaller and easier to maintain or just sell outright and cash in.
But whatever the case is, we know that the owner has spent a lot of time thinking about this and now is looking for a commercial real estate agent to help them sell their property.
Commercial real estate agents who specialize in apartment buildings are there to ensure the successful sale of your property through a comprehensive marketing campaign by exposing your property to the right group of investors.
Selling Your Building
We start off by evaluating your property. We need to consider how much income your property generates and how much income it can generate in the near future, if rents were raised.
To determine expenses we need a list of the buildings annual expenses. Additionally we will need copies of all the tenant rental agreements, and a copy of your mortgage statement if you have a loan.
Marketing of your building, includes a placement in CoStar, MLS, Loopnet.com, and various real estate websites. All of the important data that an investor needs to evaluate your building will be readily accessible and downloadable in a customized Setup Sheet.
Selling Your Apartment Building Off Market
You also have the option of having your sold OFF MARKET. I can explain the pros and cons of doing this. As 70 % of Apartment Buildings are actually sold OFF MARKET.
Once we have offers coming in, we will review them and I will make recommendations on which ones to counter and what terms to put in the counter.
If you have further questions or would just like to have a chat, please give me a call at(310) 584-7721 or email me at email@example.com
I look forward to hearing form you.
Exit Strategies When Selling Your Apartment Building
I don’t give tax advice, so for any specific questions about your tax situation please contact your tax advisor.
Pay Your Capital Gains Taxes
You could sell your apartment building and pay your Federal, State, and Net Investment Income taxes as well as your 25% depreciation recapture. The total might be as much as 40% of your profit . This might make sense if you are financial well off and don’t want to reinvest.
This may be a good option for those sellers who want to trade up (Upleg) or are not ready to get out of the real estate game but do not wish to manage or operate residential real estate and all of the associated hassles of dealing with tenants, leaky toilets, and rent control (NNN property)
With a triple net commercial property, the tenant is responsible for the majority of expenses. The tenant pays the utilities, taxes, and insurance, and usually any repairs or maintenance.
Delaware Statutory Trust (DST)
DST Investments are offered as replacement property for accredited investors seeking to defer their capital gains taxes through the use of a 1031 tax deferred exchange and as straight cash investments for those wishing to diversify their real estate holdings.
There are many other options for deferring taxes when selling your apartment building, please call and ask me.