Buyers should, with few exceptions, always utilize the services of a buyer's agent. There really is no downside since buyers don't pay any of the brokerage commissions, while, the measurable benefits ($) can be significant.
Listing Brokers have a fiduciary responsibility to get the best deal they can for one side of the transaction – the seller’s side.
But, when you’re a buyer, don’t you also deserve to have someone looking out for your best interests?
That’s where we come in. Our firm was founded specializing in buyer representation. We level the playing field by guiding investors through the entire process, from the initial requirements stage through identification, screening, price/terms negotiation and arranging financing.
We start by discussing your current situation, real estate investment goals, risk profile and timeline. We’ll provide an accurate overview of the current market and go through a question-and-answer session as needed/wanted.
Once we understand what you want to achieve, we work with you to formulate a realistic strategy to achieve your future goals for return on investment. This stage includes:
Once you give us the go ahead, we begin a comprehensive search for suitable properties. We not only have access to the properties listed on the open market, but also many "silent sale sources". We pre-screen candidate properties to find the best matches for your criteria.
Our pre-screening includes valuation analyses, investment/return forecasts and tax implication assessment. We investigate any potential title or transfer issues.
We inspect candidate properties to get a fix on their physical condition, review documents related to the properties and analyze comparable sales to “reality check” asking prices. We research rental rates for like-kind properties to see if a property’s rents are too low and if a seller’s rent forecasts are too high. We investigate seller motivations and interest among other buyers in the marketplace.
We access the lending options and programs available to you.
Then, we produce a written narrative for you ranking your purchase options with pros, cons and considerations specific to your comfort level.
If you decide to proceed, we formulate an acquisition strategy to see that the property is bought at the best possible price and terms. And of course, the submitted offer will include all necessary contingencies allowing time for due diligence items that may not have been completed during the pre-screening process.
Key items in the Purchase & Sale Agreement include:
The long-term success of your property investment must be maximized through proactive asset management (NOTE: asset management is not the same as property management). It’s not enough to “buy, hold and hope". Part of our complete service as your buyer’s agent is getting your new investment off on the right foot with a solid long-term asset management strategy.
The compounding effect of even modest annual net operating income growth has a dramatic effect on your property’s long-term returns and future value. But growing your net operating income is a proactive and continuing process. Sadly, far too many owners allow the long-term potential of a good purchase to erode, sometimes within a handful of years.
Our goal is to keep you from becoming one of those ill-fated buyers as part of our Post-Closing services. See Property Owner Landlord Services page.
Investor will have $800,000 - $850,000 from a cash-out refinance on another owned property to invest in an additional property
Investor is interested in either apartments or a single-tenant industrial property
Investor would prefer a turn-key property but would consider a value-add apartment property if needed only modest updates and rents could be increased to justify the cost of improvements
Investor is interested in properties located in Oregon, the Portland-metro area or a strong secondary market
Turn-key, condo quality apartment building (13 units). A performing asset that has been well-maintained. Current rents are close to market. A few rent increases are anticipated in the next few months upon lease renewal. Property is located on the Eastside of Portland, Oregon. The current owner is retiring and exiting the market.
Garden style apartment building (16 units) located in the outskirts of Portland, Oregon (Gresham). Property has been owned by a partnership for about three years. Quite a bit of deferred maintenance has now been completed. Current owners have started to increase rents that are currently low (about $75 per unit). There is some valued-add upside through these rent increases. The current owners are divesting their partnership, so have decided to sell.
Single-tenant Industrial building with a financially strong tenant and long-term lease in place with 3% annual rent increases. The lease is NNN, so the tenant pays most of the operating expenses. So, the Net Operating Income is very stable and predictable year over year. From an ownership perspective, would be a bit easier to oversee than an apartment building requiring professional property management. Current owner (seller) is doing a 1031 Exchange into a larger property.
We have pre-screened available properties on the market and have initially narrowed it down to three potential acquisitions that fit the criteria outlined by our Client.
A financial-investment analysis of these properties has been performed. Projected pre-tax and after-tax cash flow, loan impact and projected appreciation has been modeled and compared.
Download a sample of Property Valuation Return Projection Comparison Chart, which is one of the proprietary Investment Tools we utilizes when working with Clients.
Here's the step-by-step methodology and process Realty Yield encourages all sellers to follow before listing a property for sale.
Let's take the example below and apply the step-by-step methodology and process I encourage all sellers to go through before "launching" a property for-sale. Note: the data/fact-set closely aligns with an actual sale.
Our experience has shown over many years that very few owners (even highly experienced private owner-investors) truly understand the impact of even a “few thousand dollars” of supported Net Operating Income on income-property valuation at selling time. Let's take the below example and apply the step-by-step methodology and process I encourage all sellers to go through before "launching" a property for sale.
This includes both the financial and physical components.
Hence, current Net Operating Income = $135,000 ($252,000 + $3,000 (-) $120,000)
Assuming a market capitalization rate of 6.75%, this equates to a current value of ~$2,000,000
This includes both the financial and physical components.
The financial factors include: current rents versus market/full rents, current other income versus potential, the current operating expense load versus optimal and any “easy/near-term” added-value opportunities that could be implemented before sale.
The physical components would include all “lower cost” aesthetic items (paint, landscaping, minor repairs, signage, lighting (exterior), litter & debris (exterior) and all/most minor unit deficiencies (worn out floor coverings, failing appliances, paint, etc.).
More often than not (unless the owner is a full-time professional investor and active asset manager), there is a list of both “financial” and “physical” items that a prudent owner should address PRIOR to advertising on the open market. Furthermore, many of these items often can take months to correct/implement.
Unfortunately, too many sellers don't get the benefit of an analysis before they decide to sell.
Continuing with our 30-unit example case study above, Realty Yield’s assessment and analysis has determined:
The financial ramifications of the above, to a selling owner, cannot be overstated. The projected increase in likely sale price by acting on the above is/was as follows:
Assuming the same market capitalization rate of 6.75%, this equates to a new/projected value of ~$2,325,925. Most owners would make the choice of waiting a few months before selling if this eye-opening analysis was simply communicated by a seller's adviser/listing broker.
The reality is that initiating a rent bump, implementing a utility bill-back program, collecting parking space income, transitioning to third party R&M vendors and fixing a laundry list of repairs is going to take some period of time before the improved financial results are reflected on an operating statement.
Realty Yield will work with you to draft a written plan and timeline as well as participate in the execution and management of this process. We do it all the time.
Realty Yield is not one of those brokers that will hurry you to market just to close a sale and make a commission. In fact, in many cases I strongly recommend just the opposite. Ask my clients directly -- they will confirm this is true.
In order to price a property properly we will compile a list of like-kind comparable sales, perform our own valuation analysis, review recent appraisals of similar properties, review current for-sale competition and factor any value-add/upside opportunities, which the subject property would afford a buyer.
Pricing should be done right from the get-go. We don’t "buy" listings; in other words we won’t tell you your property is worth more than it really is just to get a listing, then later ask you to lower the price because the “market has changed.”
You will get an honest opinion-of-value for your property from the beginning. We encourage sellers to think like buyers. If you wouldn’t buy your own property based on what is being presented, why would someone else? Again, top-of-market but realistic initial pricing is required if you want to work with us.
Realty Yield will then prepare the Offering Memorandum (marketing packages). Our marketing materials are the culmination of many years of experience in knowing what gets results for our sellers and what doesn’t. But again, don’t take our word for it. According to the analytics from LoopNet (the #1 commercial-investment real estate listing site on the Internet), our listings are consistently in the top 5% of most accessed (clicked-on). The numbers don’t lie.
Our materials work because we don’t rely on generic, regurgitated data points. The emphasis is on the numbers (likely investment returns for a new owner/buyer). After all, isn’t the bottom-line about making money? Yes, we also appropriately feature a representative sample of quality photos, rent comparables, sales comparables, market/sub-market and demographic information, maps, etc.
Our marketing packages are very focused on clearly differentiating your property (why a buyer should invest in it) supported by objective, compelling financial/investment return metrics.
All sellers should ask to see samples of a broker’s marketing materials before retaining them. I look forward to sharing mine with you.
There is no downside to maximizing exposure. Obviously, the more qualified prospective buyers the offering gets in front of, the better. We utilize all the following channels:
Not all buyers/investors are created equal. Circumstances, motivation, buyer experience, and selling broker's expertise all factor in on “selecting” the right buyer. Our experience will pay big dividends here and all but eliminate false starts.
Negotiating/maintaining a final agreed upon sale price, which is at/close to the full listing price is much easier when the groundwork has been properly laid. Since we support our listings and pricing with objective, verifiable data, big price concessions are not something our clients/sellers have to deal with.
Having said that, negotiations are part of every deal. I have directly brokered more than $200,000,000 worth of investment real estate deals. There is no substitute for experience. I know all brokers/sales people say they are expert negotiators, but if you ask my clients they will confirm that claim with their real world results.
One other key added-value component we bring to our listing agent services is that we also broker commercial mortgages (the financing most buyers need/want). Deals fail for financing reasons more than anything else. This won’t happen with us. We know without a doubt what loans are available, what amounts can be borrowed and which buyers will be able to secure financing. In the many cases in which we end up doing the financing for the buyer, it turns out to be a win-win for everybody.
The bottom line is that our experience results in very few sale-fails once a property is put into contract.