01 · 2017
Rents tripled, NOI roughly quadrupled, building still held
Four-unit apartment building, Washington DC. Owner met through a mailed package, about nine years ago.
- The situation
- The owner had bought the building off-market from a colleague, with no broker on either side, and planned to hold it for retirement. She described it as doing well and needing some TLC. Rents were at about a third of what the market could bear.
- What I advised
- Tour the building, go through the planned renovations and the rents, then renovate strategically and turn units over as leases came up, with a tighter tenant screening process.
- The outcome
- Rents tripled and NOI roughly quadrupled. She still owns the building.
"Doing well" and "performing to potential" are two different things.
The work behind it: NOI Optimization and Expense Review02
Five offers at one open house, sold at $2.2M with minimal contingencies
Two connected brownstones a block from Dupont Circle, Washington DC, run for years as a bed-and-breakfast.
- The situation
- Revenue was down and expenses were up. The owners disagreed about selling and needed proceeds for the family. One building already worked as a four-bedroom home with two rental units; the other suited eight studio units plus a den.
- What I advised
- Minor renovations on the first building, kitchen and paint. Position the second for short-term rental. List both, individually or together, at $2M each.
- The outcome
- The open house produced five offers on the three-unit building around $2.1M and one offer on the pair at $4M. The three-unit closed at $2.2M with minimal contingencies, the highest price in the area per square foot and per unit. The second building went to short-term rental.
Price the outcome the owners need, not the building they happen to own.
The work behind it: Sale Readiness and Disposition Advisory03
Six offers in seven days, above the seller’s own expectation, no contingencies
Four-unit apartment building, Dupont, Washington DC. Owner met through a mailed package.
- The situation
- The owner was moving out of town and needed to sell. He lived in one unit and a second was empty, so two of four units would be vacant at sale. Other agents had told him to leave both empty so the new owner would have flexibility.
- What I advised
- Refresh both vacant units and place new tenants at higher rents than before, then clear the deferred maintenance before the building goes to market. Most buyers of a four-unit building want cash flow, not flexibility.
- The outcome
- One open house produced six offers within seven days. The building sold above the price the seller expected, with no contingencies.
A buyer pays for income he can see, not for flexibility he has to imagine.
The work behind it: Sale Readiness and Disposition Advisory