Here is everything you should know before you sell your Ventura County property
Planning on selling your Ventura County investment properties? Ventura County is the southernmost county found on the Central Coast in California, featuring more than 800,000 people. More than 50 percent of the land in this county is composed of forest land, and it’s considered one of the most picturesque and beautiful counties in the whole United States.
But how exactly do you put up your Ventura County property for sale? Here is everything you need to know before selling your Ventura County building.
Hire an experienced commercial real estate agent
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How do you sell your Ventura County investment properties? The best way to sell your commercial Ventura County real estate for top dollar is to find and hire an experienced commercial real estate agent with knowledge of the local and regional investment market.
Make sure to find and hire a commercial real estate agent who you can trust and who has a track record for selling commercial buildings. Owners of commercial properties often make the mistake of hiring their residential agent to sell their commercial property. While trust and familiarity are important, residential and commercial sales are tremendously different, and it’s essential to have an expert in commercial representing your best interests. Ask for references or examples of similar kinds of properties the agent has sold before. You should hire an agent with a tailored marketing package, knowledge of current CRE technologies, a renowned presence in the Ventura County community, local market research skills, experience with contract negotiation, and both a local and national presence to attract qualified real estate buyers. Once you hire an agent, make sure they attend all property viewings to answer any questions about your building and highlight all of the building’s features.
Begin with curb appeal
Regardless of how sophisticated the investor may be, the aesthetics of the building have a huge impact on the ultimate sale price. A clean, modern, well-kept property attracts buyers looking for a clean, simple, passive cash flow and price of ownership. These buyers, as you’d imagine, are the ones willing to pay the highest prices. Imagine the person who overpays for the Lamborghini and Louis Vuiton dress shoes; he’ll overpay for good-looking real estate too. Conversely, peeling paint, cracking parking lots, dying plants, and dated finishes insinuate issues in the foundation, the financials, and whatever else they can’t see on their first tour, leading to fewer and lower-priced offers. Make the investments into the curb appeal as much as you can prior to bringing it to market.
Stabilize and Maximize the Rent Roll
To maximize the sale value of your investment property, it’s essential to meticulously manage your rent roll prior, and during, the sale. If you own a multi-tenant property, odds are that you have one, if not many, tenants with leases expiring soon. While there is no one-size-fits-all solution to the process, there are two vital factors to improve the results: Optimizing the average lease term remaining, and establishing “market rent.”
The highest paying buyers, and their lenders, value stability over “upside.” Therefore, it’s essential to renew the leases of any tenants that are expiring in the next six or twelve months. This is even more important for your largest and strongest tenants. Even if these renewals require the seller to invest in the tenant with free rent or new tenant improvements (TI), the additional value created often far exceeds the costs. Conversely, if the property has predominantly below market rents and low occupancy, it may be wise to keep the leases short-term to persuade an owner user or value-add buyer.
Equally important to the lease term are the most recent rental rates in the property. The rental rate and terms of the last few leases completed at the building signal to the buyer and the lender of what is “market” rent. This market rent is then modeled into the financial analysis and cash flow projections moving forward, so it’s imperative to maximize the base rental rate of your newest leases and renewals. Again, incentivizing the tenants to increase the initial rental rate can be an extremely valuable investment.
While these two elements are of utmost importance, numerous other rent roll factors contribute to maximizing the sale value or your Ventura County commercial property, including; reimbursement type, options to renew, base rent escalations, quality of the Tenant Improvements, rent guarantees, etc. As a best practice, connect with your experienced investment sales broker well before the anticipated sale to ensure each new lease and renewal is structured in the best way possible to maximize value and buyer demand.
Get the inside of the building move-in ready
Want to sell your Ventura County investment properties? Buyers and investors are typically willing to pay more money for buildings that are move-in ready than buildings that need some repairs. If there are repairs needed at your commercial building, then consider fixing these issues before putting the building on the market. Potential buyers and investors will see these necessary repairs as a chance to talk down the price of your building. You might also want to make a few inexpensive upgrades that will make your building shine and boost the appearance of the building, like cleaning the carpets and floors and adding a new coat of neutral paint to the walls and ceilings.
Have a pricing strategy
You might overprice or underprice your commercial building without a proper pricing strategy. Start developing your pricing strategy by finding recently sold buildings in the area that are similar to your building in condition, age, size, and location. You should also look at comparable buildings that are currently on the market for sale in the Ventura County market. While this is a good start, it’s very easy to be misled by one or two outliers, so it’s best to contact your local commercial real estate broker and request a thorough, professional Broker Opinion of Value, or BOV.
For investment property, potential buyers will want to know the Cap Rate to figure out how much income the building can generate. You can get a better idea of the potential value by calculating your Net Operating Income (NOI), and dividing it by the prevailing market Cap Rate. A word of caution for all California properties: be sure to adjust your property tax expense based on the likely sale value by multiplying it by your property tax millage rate, or roughly 1.2%. You can find your exact millage rate on your tax bill, or by entering in your property’s information here.
While even the most perfect research may provide a strong conviction as to the likely sale price of your building, the value is ultimately what a buyer is actually willing and able to pay for it. The quality and skill of your commercial real estate agent can have a dramatic impact on that final price, so make sure to make the investment in a professional brokerage. In summary, the pricing strategy is just as much art as it is science, but always needs to be aligned with your end goals.
Collect all important information
Before you can complete your building sale, potential buyers and investors will conduct their own due diligence on your building, so it’s crucial to begin compiling that information early in the process. For example, you should gather any utility bills, profit and loss statements, environmental reports, property condition report, floor plans, records of recent repairs, and any other pertinent information about your building.
It’s easier to negotiate a strong price when selling your building if you have all of the right information up front. Collecting info on the Ventura County area can also help your building sale. Include information about demographic data, traffic counts, and distance to public transportation to help show why buyers and investors should buy your building.
Planning to put up your Ventura County property for sale? Reach out to the trusted Ventura County real estate agents at Cohen Debuiser Team for guidance.
