Thought this article might be helpful to paint the picture of the multifamily market vs the residential market a little bit. What are some of the main differences and similarities if there are any. Obviously, residential is going to be a much bigger market (1.8M Homes) than apartments (275,000) but what really is the difference?
Residential, for the most part, is a much different market and sales process. You have people who are making their first big purchase and looking to raise their families in these homes! It's a place you are going to spend a lot of time and make unforgettable memories. It's an "emotional" part of real estate and the way the building makes you "feel" is very important. Can you see your family growing up in this house? What are the school districts like? Can you see yourself waking up in this house every morning? There's quite a bit to think about! I understand this isn't the exact scenario for all 1.8M homes but you get the point!
Multifamily (5 units and above in this case) on the other hand is different. People who buy multifamily buildings do not purchase them with emotions on how the building makes them "feel." More times than not this is strictly an investment for them which means if they put X amount of money down to buy this building what return are they going to get on their money. Yes, they don't want a building that is going to fall down but they aren't going to be as particular about paint chipping on the outside of the building and the light switches in each unit as they would be about their personal home. They want to know the building has good "bones" aka isn't going to cause major problems/fall down and what kind of income it brings in on a monthly basis. It's the opposite of emotional.
What's the point? The point is when selling a home you are looking for a few particular people who see this home as something special that will hold a special place in their heart even after they move. They want to "connect" with this home and feel the "warmth" it brings to their life. It takes a lot of marketing and storytelling to attract these individuals who might be drawn to this particular neighborhood and love the cabinets in the kitchen. It's a process that takes time. Most of the time, even if the building is priced right, you are going to have a select number of people who want this particular home.
Multifamily is completely different. If you own an apartment building in Los Angeles, it has good bones, and is priced right you will generate multiple offers in the first few days (if not shorter.). The main problem you will have is sifting through the multiple offers to find out which ones are real and which ones aren't! Some people most definitely prefer some neighborhoods over others but they will often even overlook this if the building is a good investment for them. There are a lot of investors here in Los Angeles and not enough inventory for them (normal priced inventory). There is a little bit of storytelling to do if you are in a neighborhood that might be a little unfamiliar to people but it always just comes down to the "numbers." ONE investor might buy multiple apartment buildings over the course of one year here in LA. There are thousands of investors meaning you will have no problems finding a buyer! If you want to sell your apartment building and are reasonable about the market you should not have ANY problems. You should refer to our "Why Pricing a Property Correctly is SO Important..." post so you don't fall into any traps and process runs smooth!
Good luck out there!