If you’ve owned an apartment property for a number of years, there’s a good chance it has appreciated substantially and you’ve accumulated significant equity.
But knowing how much your property is worth is only part of the picture.
An equally important question is:
What return are you earning today on the equity you have tied up in the property?
A complimentary Property Performance & Equity Review provides a clearer picture of how your apartment property is performing today, how much equity you've accumulated, and how effectively that equity is working for you.
The purpose of the Property Performance & Equity Review is to help you better understand your property's current financial position and evaluate the options available to you.
In many cases, continuing to own the property may be exactly the right decision. In others, there may be opportunities to improve performance, refinance, reposition equity, exchange or eventually sell.
The goal is simple:
Better information before you make an important decision about your property.
We'll look at the property's estimated current market value, existing debt, current equity, net operating income and estimated annual cash flow.
Long-term ownership can create substantial wealth—but it can also result in a large amount of equity remaining tied up in a property.
Your analysis calculates the property's current cash return on equity, helping answer:
How much cash flow is my accumulated equity actually producing today?
Once we understand the property's current performance and your equity position, the review can illustrate how several potential strategies could affect your financial position over time.
We'll project what continuing to own the property could potentially look like over time, including:
We'll estimate what a sale could potentially produce after considering:
The analysis can also illustrate how your estimated net sale proceeds might perform under several hypothetical reinvestment return assumptions.
This makes it easier to compare the potential opportunity cost of continuing to hold with the potential benefits of repositioning your equity.
Financial return isn't the only consideration.
Your analysis also helps you think through questions involving future capital improvements, management responsibilities, liquidity, income needs, estate or succession planning, and whether the property still fits your long-term investment objectives.
A Hold vs. Sell Analysis doesn't start with the assumption that you should sell.
It may indicate that one of three strategies deserves further consideration:
Your property continues to provide an attractive return and remains well aligned with your objectives.
Opportunities may exist to improve rents, expenses, operations or the physical property.
A different capital structure may better support your objectives.
Your accumulated equity may potentially be more productive elsewhere.
A sale may be appropriate based on your financial or personal objectives.
You probably know approximately what your apartment building is worth.
But do you know:
Your current equity?
Your current cash return on that equity?
What your property could potentially be worth five or ten years from now?
What your equity might potentially produce if it were repositioned?
Those are different questions—and they can provide a very different perspective on an investment you've owned for many years.
Get a clearer picture of your property's value, financial performance, equity position and available options.
Complimentary and confidential. There is no obligation and no requirement to list your property for sale.
Mike Lembeck of Citivest Realty Services specializes in Southern California multifamily investment properties and works with apartment owners to help them better understand their property's value, performance and available options.
The objective isn't simply to sell a property. It's to help an owner determine what makes the most sense to do with it.
The Property Performance & Equity Review is provided for informational and comparative purposes only. Property values, future income, expenses, appreciation and investment returns cannot be predicted with certainty. The analysis is not an appraisal and does not constitute tax, legal, accounting or investment advice. Owners should consult their appropriate professional advisers before making investment or tax decisions.
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