The need to use a specialist to sell multifamily investment property

The need for "Specialization." If you want to make a lot of money in the real estate investment business, you need to learn more and more about less and less. What we refer to as the need for specialization. If you need to have heart surgery, you will go to a heart specialist for advice not a foot doctor, so if you are selling or buying a multifamily investment property you would go to a specialist who is schooled in this form of real estate investment not someone that sells homes. What's the difference? The concept of marketing multifamily investment property is totally different from marketing houses. A multifamily investment professional needs to be schooled in the use of the income approach to value, which is the process of capitalization meaning converting the income stream (net operating income) N.O.I. of a multifamily investment property into value. There is a direct relationship between the N.O.I. that a multifamily property produces and its value. So the channels used to reach investors are different than the channels used to market houses. Multifamily investment property are for investors who are interested in creating wealth using real estate, not people looking to purchase their primary residence. There are a few different specialty designations that a multifamily investment specialist can receive to make he or she an expert in their field. Such designations as the Certified Commercial Investment Member (CCIM) known as the PhD of the commercial investment real estate arena, the Certified Multifamily Investment Advisor (CMIA) and the Certified Exchange Advisor (CEA). These are the tools that real professionals will display that show they are truly experts. So what's the disadvantage of not using a specialists when buying or selling multifamily investment property? A multifamily specialists can properly determine the real value of your multifamily property based on its income stream and can determine where rents should be by conducting a rental survey to make sure the property is producing its maximum net operating income (N.O.I.). Your specialist can make recommendations for staging a property for sale to get the most value as well as marketing to both local, regional and in many cases national and international channels who look for these types of property investments. Prepare marketing flyers and marketing packages and conducting an investment analysis by reconstructing the numbers of the property to reflect what a new owner can rely on for its first twelve months of ownership, allowing multifamily investors to make an educated decision when buying or selling multifamily investment properties. These are just some of the tools that a specialist needs to have in order to be successful in the marketing of multifamily investment property. These tools and marketing channels as well as the education required are totally different than marketing of houses. A home broker uses the market approach to determine value not the income approach and sells amenities, the kitchen size and the school system, where the multifamily investment broker sells the income stream of the property as well as the different types of returns and how they can create wealth by investing as well as showing clients how they can pay no tax when disposing through a 1031 Exchange. Some of the other things that a multifamily investment property specialist can show a client in addition to how to pay no tax through a 1031 Exchange, is how to dispose of numerous scattered small multifamily properties and consolidate into one large property, how to double or triple your real estate portfolio by using your current equity with the use of leverage as well as how to go from an active investment to a passive investment that is management-free. These are techniques that home brokers are not educated in because they don't apply to home ownership hence, the need for specialization. So, if you want to receive the most value for your multifamily investment property when selling, want to know how to pay no tax when disposing, want to know how to double or triple your portfolio using your present equity, want to be able to sell scattered properties to acquire just one large property or go from an active to a passive role of ownership, then you need to go to a multifamily investment property specialist. Russell Gullo, CCIM, CEA, is a certified exchange advisor, president of R. J. Gullo & Co., Inc., West Seneca, N.Y.