West Main Apartments Case Study

15

$1,260,000

West Main Apartments

1025 W Main St

Hillsboro, OR 97124

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This sale prosed numerous challenges. Among them, the property had debt that was long-term, low leverage, at a higher than the market interest rate, and was required to be assumed by the purchaser. The property also has Stucco siding, which is uncommon in Oregon. In addition, the property had originally been purchased out of distress and had a negativeconnotation with investors based on its history.

In talking with the owners of the property, the sellers had done a good job purchasing the property from a distressed seller, and fixing the major deferred maintenance issues that had plagued it in the past. We had brought in a well-qualified exchange buyer in the past when they told us they had no intention of listing the property for sale. During that time, they developed a strong professional relationship with us based on our communication and thorough investigation of the property. That buyer didn’t end up closing on the property, but sellers got a firsthand experience of Hugh and Carson’s way of doing business. The sellers felt that we were very thorough and diligent and experienced our “no BS” way of communicating with them. They knew that they would always get the straight story from us without the risk of “getting brokered.”


Eventually, the sellers decided to list the property for sale based on the strong marketplace and the property’s rent growth and appreciation. We urged that they raise rents to maximize their value, as we felt they had $500,000 more in equity that could be created compared to our initial 1031 exchange buyer’s purchase price. We worked tirelessly to market the property to principals, vendors and brokers alike. The sellers worked hard and continued to raise the property’s NOI while Hugh and Carson located another broker who had an exclusive representation agreement with a buyer in a 1031 exchange. This same buyer had refused to close on another apartment complex due to listing broker’s unwillingness to cooperate. Because the transaction required debt to be assumed, Hugh and Carson were put in direct contact with the lender in order to make sure that the assumption went smoothly.


The property was sided with Stucco, and while this is not common in Oregon, if maintained well it is actually an excellent siding product. We had several specialists out to inspect the stucco and even had a contractor look at siding that had been damaged in a tenant accident to confirm that it was applied correctly and was in good working shape. With the buyers satisfied, Hugh and Carson worked through the assumption of existing financing and the origination of a second loan, which took a full 3 months to complete as terms, amounts, and interest rates changed violently due to volatile market conditions. Thanks to Hugh and Carson’s knowledge of the property, the market, and their financing partners, they were able to get the deal closed with all parties being very satisfied. The sellers captured a huge gain of over 100% equity in 3 years and the cooperative brokerage model achieved them that return.

  • Knowledge of the financing process and each lender’s quirks is essential.

  • Knowing how to market a property and to actively work with the entire marketplace to achieve the highest price.

  • Pre-vetting a buyer’s capability and motivation is essential when hurdles arise in the transaction.

  • Excellent communication regarding client goals is a must.

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