Looking to Exit. Need help with strategy.

[Rodders]

Hi, I am a Vancouver investor with 4 properties in Edmonton and need a partner or mentor to help me to strategize and divest my holdings.
Unfortunately, I have found another shiny object but I have been in this for over 5 years, and have made some wins, and some losses.
Can you help with a strategy ? I don’t want to sell each individually through a realtor. Hate those commissions and would rather one buyer realize those savings. Is it a multi year deal ? Is it a refinance with a partner and some form of buyout structured ? I am not concerned with capital gains as there little for me to report. These are all 3 bedroom condos located in the NE Edmonton.
2 are CIBC open mortgages 2 mature in 2017 and are at 2.75 and 3.14 . One unit is currently vacant and requires a facelift. 1 unit is coming vacant August 1 and 2 others have long term tenants, with solid on time payments. Any solid advice would be really appreciated !

 

[Matt Crowley]

What do the numbers look like? You need a pro forma for the divestiture. You can likely get a Realtor to reduce commission if they get all listings. Selling condos in different locations is probably not appealing to most investors, and investors expect a deep discount. Usually better off to sell to retail customer.

I would suggest to keep this as simple as possible. It is very likely you will make more money by selling outright to a retail customer instead of selling* via option, agreement for sale, or JV to another investor. Selling* to another investor in the latter method compounds risk as almost-broke investors have no cash and will expect you to continue holding the mortgage. If there is a new endeavour, you will likely want that debt capacity freed up.

* these are not really sales...they are a handoff of nearly all of your gains while you still hold 99% of the liabilities.

What is the return of holding in flat market in Edmonton? It is probably worthwhile to do a side-by-side analysis of all your properties.

What is the return on new opportunity?

This is first of all a math question. You can't make a strategy before you have all the numbers.

 

[Thomas Beyer]

You will always get the highest price selling to a non-investor in the retail market. As such I would recommend selling the vacant condo after a modest facelift first.

To sell a bunch of condos you need a value proposition attractive to investors and/or a sizable discount to retail market which usually far exceed any realtor commission.

Please publish more data here as Matt suggested (rents, mortgage terms, value, unit size, location) or feel free to send me a private message for further more detailed numbers you may not wish to share publicly.