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A sales process that uses modern, focused communications and marketing techniques separates buyers with track records from those who kick tires

By Derek Lobo

Selling an apartment building can be just as challenging as buying an apartment building. But selling an apartment building is not simply an issue of good due diligence -- property condition, revenue flows, turnover, and property management -- it’s also an issue of identifying and reaching the best buyers. At Rock Advisors we believe that if you want to sell your apartment building at the highest price possible then you have to expose it widely to a qualified pool of buyers across the country.

This can only be achieved with a sales process that uses modern, focused communications and marketing techniques to separate buyers with track records from those who kick tires. Reaching out to the right buyers is the only way to get the right price as a seller.

The sales process

Rock Advisors has three important tools which we use to help you sell your apartment building.

First, we have a database of every apartment building and owner in the province. This detailed database allows us to directly market to potential buyers sorted by geographic location, buying capacity, and track record.

Second, we have 30 highly ranked web pages that rank high in Google internet searches to help expose your buildings on the internet to other apartment buyers and real estate agents across the country. Maximum exposure will ensure the highest price for your building.

Third, we have a strong back room support group to prepare all your brochures, market research, and marketing tools and materials.

Within a few days of signing a listing agreement we have your building in front of qualified buyers. We produce marketing materials and post the information on our multiple web pages to use the power of the internet to find and engage qualified buyers for your building. Once potential purchasers get our email flyers they can link directly to the Rock website where they sign a confidentiality agreement. Once we have qualified the buyer, we send them a password allowing them to download the marketing package and high level financial data.

Now the potential purchaser has all the information they need to make an informed decision to proceed further. Before they put in an offer we give them a second password that allows them to download detailed documentation on rent rolls, utilities, financing, market surveys, building condition reports, etc.

By using a second level of restricted access we ensure only the most qualified buyers get the detailed information needed for due diligence. We find that once a building is under contract, due diligence goes smoothly and deal negotiations can proceed with confidence that everyone involved is professional, serious, and genuinely interested.

How the process works

Let me give you an example of how this sales process works in practice. Recently Rock Advisors had the opportunity to sell a lovely, well-maintained 100-unit apartment building in London, Ontario.

To get the best deal for our seller, we marketed the building across the country and thousands of buyers received an email promoting this opportunity. However, we could not contact every buyer in Canada so it made sense to focus our efforts on buyers who already owned buildings in London.

From our database we found there were 224 buildings in London with more than 50 units -- these buildings were owned by 77 different owners, of which 24 owned multiple buildings in London. These 77 owners were our primary buyers and we aggressively marketed the building to them.

We contacted all of these owners via telephone, mail, fax, and e-mail. Within two weeks our marketing campaign produced 14 signed confidentiality agreements and four offers to purchase the building.

We went back to our database and found one of the four potential purchasers had just bought two buildings in London in the last year. We called the brokers who sold the purchaser these buildings and asked how the purchaser behaved during due diligence. They answered “firm but fair.” This purchaser made the offer with the highest price and the least conditions. Because of the information we gathered, we were satisfied with this purchaser and we therefore chose this offer, negotiated the deal, and successfully closed the sale.

Derek Lobo is the CEO and Sales Representative for Rock Advisors Inc., a boutique apartment brokerage. Contact Derek at dlobo@rockaptadvisors.ca and view current listings at www.rockaptadvisors.ca.