Contemplating Sale of Family's Northern CA Apartment Building

[Eric Phillips]

Hello.  Hoping for some advice.  An elderly member of my family is contemplating selling his apartment building in the Redding, CA area (couple hours north of Sacramento) and has asked for my advice. I've owned a couple rental condos that I sold in years past, but I've never dealt with the sale of an apartment building so I'm pretty new to this.

  Are there any key factors to look for in selecting a good commercial property real estate agent? What services do good agents provide (marketing, negotiations, etc.)?  What is a fair commission rate to agree upon in Northern CA?  Would 5% commission for the first $1 million and 4% for anything above that amount be reasonable?  My family member does have an agent in mind but nothing is locked in yet so I want to help him with his due diligence. I estimate that the apartment building is worth in the realm of $1.8-2.3 million.  I believe all of the 10 or so units are all rented out at the moment. My family member owner regularly receives (non-specific) offers to buy the apartment building so I definitely think the buyers are out there for something like this.

Any thoughts about apartment building sales would be appreciated! Thanks.

[Noah Laker]

Hey Eric, I'm a broker and investor here in Norcal, and manage 100+ rental units. A great broker should be able to price this building more precisely, and not only take photos but actually help prepare it for market. When I list a property I spend a lot of time ensuring that it's as attractive as possible in the eyes of investors. After that, make sure your broker is advertising the building where commercial investors are looking, not just on the MLS.