Best way to sell a portfolio

[Ryan Dunn]

I have a Portfolio in the Troy, Sidney, Piqua Ohio area. Its a total of 7 SFH one is a tri plex and one is a duplex. So a total of 10 doors. They are all long term rentals with property management set up. Total value is around $1 million and rents are also around the 1% rule.

What is the best way to market or sell them? 

One at a time would be a long time and a ton of 1031s. So the hope would be to sell to one group the full portfolio.

Open to all ideas or input. Thanks 

[Kerlous Tadres]

Quote from @Ryan Dunn:

I have a Portfolio in the Troy, Sidney, Piqua Ohio area. Its a total of 7 SFH one is a tri plex and one is a duplex. So a total of 10 doors. They are all long term rentals with property management set up. Total value is around $1 million and rents are also around the 1% rule.

What is the best way to market or sell them? 

One at a time would be a long time and a ton of 1031s. So the hope would be to sell to one group the full portfolio.

Open to all ideas or input. Thanks 

Hey Troy, 
I would say the best bet is for you to try to sell it as a package deal and get a seasoned investor-agent to try to get you some action on it. Let me know if you have any questions

[Michael Smythe]

@Ryan Dunn selling in bulk will lead to buyers expecting bulk pricing.

Be aware of this...

[Bill B.]

You will get less than market because they are occupied. 
You will get even less if you yr to sell them in bulk. 

I’m not saying don’t do it. I’m just reminding you that you are probably taking a 10-20% haircut selling them in bulk and occupied. You might lose more than the taxes if you’re in the 15% capital gains bracket. 

Personally I would try to sell them all individually, as many unoccupied as possible. If some happen to line up and you can do a 1031 great. If not, then just do the 2-3 that have the highest gain. 

Imagine taking the 20% loss for selling as a portfolio and then the 1031 fails for some reason. Not good. 

Good luck. 

[Dave Foster]

@Ryan Dunn. Im right there with @Bill B. those are some good things to consider when selling your properties. The benefits of selling as a portfolio is that when you do a 1031 exchange, you won't have to coordinate the sales of multiple properties, And this would minimize the amount of individual exchange fees. 

Another option if you're concerned about not being able to sell as a portfolio, or individually. You might want to look into doing a reverse exchange. A reverse exchange is where the intermediary creates an entity to take title of  your replacement property before you close on your relinquished property. And have 180 days to have sold your properties you want to sell and take title to your replacement. 

Or you could slowly consolidate the properties together to purchase a larger property. So if you had eight properties and could only cluster four of them to meet the timelines of an exchange to a larger property and did the same with the other four. 

[Ryan Dunn]

@Dave Foster Thanks for the idea on reverse exchange. I will look into that also.

And thanks everyone else. I knew a bulk deal would net something less. Just not know if there was a rule of thumb on the amount. Thanks

[David McNeely]

If you'd be interested in seller-financing, I'd be open to discussing that. I'm from Dayton, but live and work in DC now. Looking to begin investing in the Dayton area.