The following case study describes our process selling our recently closed property at 354-358 Shults Street & 5926-5930 Benner Street, Los Angeles, CA 90042.
In June 2021, a client reached out to us and requested an opinion of value for four apartment buildings in Highland Park. The opportunity consisted of two contiguous parcels – each parcel having two buildings on it. The properties had been purchased approximately 50 years ago and had seen numerous capital improvements in recent years such as new roofs, seismic retrofit completed, new stairways, & new pool. After analyzing the property’s financials, we suggested going to market at $6,000,000 with an expected sales range around $5.9M.
In early October, the client received an unsolicited offer for the Highland Park buildings that was too difficult to pass up. As a result, the client accepted the offer and opened escrow. After performing the initial inspections, the buyer requested a price reduction that reflected close to 10% off the original purchase price. Consequently, the seller did not accept the request for a price reduction and cancelled escrow.
Around late October, the client called us ready to exclusively list the property. The client explained to us the situation with the previous brokerage/agent and requested we go to market at a higher price than what we suggested. Because the new asking price ($6,300,000) was within striking point of our original suggested asking price, we obliged and hit the ground running with the marketing efforts.
After sending our initial “Just Listed” email campaign, we procured multiple offers from qualified buyers and opened escrow with a buyer whose downleg was completely non-contingent. After performing all buyer inspections, the buyer requested the close of escrow date be pushed back several months because he had hit a roadblock on the sale of his downleg. In addition, the buyer discovered that there were a significant number of tenants not paying their rent in full due to COVID-19. With the eviction moratorium being extended, there was nothing the buyer could do about those non-paying tenants. Our seller decided that being under contract for possibly five months was not ideal; as a result, both parties mutually cancelled escrow.
Around this time frame, the tenants became less cooperative with the marketing efforts since they had given access to their units on four separate occasions in less than four months – 2 from City of LA SCEP Inspections, 1 from the unsolicited offer, & 1 from the buyer in a soon-to-be 1031 exchange. We decided to reach out to other buyers who had either submitted an offer and/or showed interest in the building with the sole purpose of having them tour the vacant unit as well as several units of tenants who were willing to allow access into their unit.
The tour worked to perfection because we ended up opening escrow with a 1031 exchange buyer that had toured the property on the date we opened select units to all prospective buyers. After the buyer completed all inspections, the buyer came back with a $100k credit and removal of all contingencies that was agreed upon by both parties. From that point forward, the focus was to facilitate the buyer’s loan and get it to the finish line. We ended up closing escrow early (before the agreed upon close of escrow date), and the buyer successfully completed her 1031 exchange.
We closed escrow within 1% of our originally suggested asking price – the price point we believed the property would transact at back in June 2021. Partnering with a team that has an abundance of knowledge for the Los Angeles market & a proven track record are essential to selling an investment asset.
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700 S. Flower Street, Los Angeles, CA 90017
