Apartment Specialist Network divides the entire exchange process into three stages. Below are explanations of what happens in each individual stage:
The initial goal is to strategize with our client to find out the reasons for the exchange. In order to have most updated information we first complete a complimentary in depth market evaluation of the current property. This enables us to have a good idea of the value a property can bring in and thus giving us approximate proceeds the client would have to work with in the exchange. Next, we examine our client’s current and future needs and determine what properties, in what states and income would work for the exchange. Once we have identified the clients needs we perform a preliminary search of properties that are currently on the market and locate several best matches. We then use the proceeds from the sale and the prospective income from the matched properties to analyze if an exchange is the best alternative. If so, we move to Step Two.
This part on the exchange focuses on listing and marketing the current property. Our marketing strategy consists of creating a quality marketing package, positioning the property on all major listing websites, newspaper advertising, direct mail and phone solicitation. Through these avenues we ensure the highest exposure to the local and national market. Once the property is in escrow and the buyer removes all contingencies, we begin the search for exchange properties for our client. The idea behind this is that we want our client to be looking at properties as soon as we know that the possibility of closing escrow on the old property is very high.
At this point we assume that the old property as closed escrow and our client exchange funds are deposited with an exchange accommodator. We search for properties through our network until we find at least three that our client is comfortable with. We usually procure several property photographs as well as several years of financials to analyze from the local broker as it. Once our client has selected the property we put forth a Letter of Intent to purchase. Although non-binding, this letter makes the Seller aware that there is an interest in the property and lays out all the terms that the Buyer would like to purchase the property at. This is great tool to negotiate price or terms before the official contract. Once both parties come to an agreement on the Letter of Intent we schedule a visitation of the property by our client. We often accompany our clients on the initial trips so that we can familiarize ourselves with the property. While touring the property we assist our client in meetings with current and prospective management companies and maintenance personnel to establish potential future operating contacts. Additionally we drive the surrounding area and visit other nearby apartment properties.
If the visit is a success we move to executing a formal contract and hire an inspection company to complete the formal property inspection. This is also a good time to view all available loan programs and talk to several loan brokers and direct lenders. If no major issues are fund during the inspection, we remove the inspection contingency and select the lender for the loan. We take the lead in dealing directly with the title/escrow and well the insurance brokers to obtain best rates. We also help in selecting the management/maintenance companies. For most clients, another trip to the property is unnecessary however, some feel more comfortable visiting right before the closing to ensure all management/maintenance personnel has been put in place. After closing we find that on average, our clients visit their out of state properties once a year. |
