Cape Lee Apartments Case Study
Cape Lee Apartments
3222 N Shore Dr SE
Albany, OR 97322
This sale prosed numerous challenges. Among them, the rents were low for the pricing of the listing at the time and the property is in a floodplain, abutting a lake.
The property had an aggressive marketing campaign which led to multiple offers from multiple brokerage firms representing various clients. The property went into contract two times prior to the final buyer. Upon having a client in an exchange, whose building we sold
for him, we discussed the goals of the buyer and how this investment would work in their portfolio, which ended up being an excellent fit. We helped advise the buyer with the correct inspectors and vendors for repairs as they went through their due diligence and provided evidence that the rents could be easily raised to improve the return in a short time. The buyer had been in another investment which did not provide investor return for the past three years, so they were skeptical about a new investment.
With a portion of two buildings in the floodplain, the new owner would need to have flood insurance for the bank to lend and the transaction was taking place when the government agency changed the flood insurance rules and rates were going up. We coordinated new elevation certificates to be conducted for the purpose of updating flood insurance for the property. We then assisted the seller inputting a new policy in place so it would not lapse during the transaction since theirs was expiring, and helped the buyer find an insurance broker who would be competitive with their rates. The insurance plan the seller had in place was a fraction of the price the buyer was getting quoted. We worked with the buyer to understand the full potential of the investment and how his return would improve,
even with higher than expected insurance costs.
Through our connections and with our knowledge, we also helped the buyer connect with the appropriate bank to obtain financing; all the while informing them and helping them work through the flood insurance details. Having a broker intimately involved in the details and able to adequately relay them to all parties involved is essential. Within six months of closing the transaction, the new buyer was very happy to report he had raised rents and income that beat our projections for his first-year return, which enabled him to buy a new car.
Marketing a property to the widest possible client and broker base works.
The ability to willingly assist and work through unforeseen hurdles is essential in a broker.
Engaging your lender early in, or prior to, a transaction can be the difference in getting the deal closed smoothly.
Excellent communication regarding client goals is a must.