WHY DO OWNERS SELL?
There are many different reasons why people decide to sell their investment properties. Each person comes to that decision after careful thought. From my experience, here is a list of some of the reasons why people decide to sell.
1. Need money – Owners may need the equity for another purpose.
2. Take profit – Owners decide to sell because the real estate market favors a sale now vs in a year or two. Interest rates, which have a converse effect on cap rates/values, have been rising quickly over the last year. There is speculation that the rates will rise some more before they stabilize for a period. It may be a good idea to sell now.
3. Loan is coming due – Owners with cash flow issues will have to contend with maturing loans which will get set with higher interest rates.
4. Too much work involved – Owner who are tired of dealing with tenant issues.
5. Dissolution of a partnership – Owners may find it is time to end a partnership with others.
6. Rebalancing of portfolio – Owners may want to sell one asset in order to reallocate the resources to another asset.
7. Violations – Owners may be dealing with numerous building and safety violations which need to be addressed.
8. Major upgrades – Owners may realize that major renovations are due (i.e. roof, common areas, etc.) but they are unwilling to do them. A sale is preferred.
As you can see, there are many different reasons people decide to sell. No matter the reason, it is important to have an expert working for you to make sure your interests are protected. Feel free to send an email to alen@cmreg.com for a confidential analysis on the value of your property or any with any other questions.