How do I sell up a portfolio?

by Readers Question

8:49 AM, 21st June 2019
About 6 months ago

How do I sell up a portfolio?

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How do I sell up a portfolio?

I have been a private landlord for approximately 30 years and am now looking to retire. I would prefer to sell my houses as a going concern as most of my tenants have been with me for up to 25 years and look upon their rented property as their forever homes.

My portfolio is based in the North East of England and properties are in excellent order, but although I’m reasonably competent at buying and renovating properties I’ve never made a multiple sale. Therefore, would anyone have any advice on how to go about selling a portfolio please?

Many thanks

Julie



Comments

Mark Smith (Barrister-At-Law)

9:53 AM, 21st June 2019
About 6 months ago

Have you looked at incorporation into a company and then selling the company? http://www.property118.com/tax

Laura Delow

10:21 AM, 21st June 2019
About 6 months ago

I'd be interested to see how this thread pans out.
Incorporating first definitely makes sense to explore, but whether a Ltd Co sells the whole portfolio or an individual, my first thoughts are to sell it piecemeal as anyone buying is likely to be a shrewd investor & will usually need to see that they can buy it and massively improve the income/profit. Sound advice might be to consider selling the properties in small blocks if you lack the appetite to sell them one or two at a time. There is then an element of control over the pricing and the degree of incentive to Investors. Also if your properties are all in the same area; i) to sell wholesale sends out the wrong message into the locality and could undermine any chance of your getting fair value & ii) however long standing your tenants are, if they all in the same area, the moment they know their properties are being sold could unsettle them enough to look elsewhere which could prove very costly until suitable purchasers are found.

David

11:26 AM, 21st June 2019
About 6 months ago

Hi Julie, I have bought a few portfolios recently and have managed to keep virtually all of the existing tenants. I’d be interested in speaking with you.

JB

11:57 AM, 21st June 2019
About 6 months ago

Reply to the comment left by Mark Smith (Barrister-At-Law) at 21/06/2019 - 09:53
How do you go about selling a company and who would be the likely purchaser?

Jonathan Clarke

14:14 PM, 21st June 2019
About 6 months ago

Hi
Check out Vesta.....
They market portfolios to investors with tenants in situ
https://www.vestaproperty.com/

JB

16:08 PM, 21st June 2019
About 6 months ago

Reply to the comment left by Jonathan Clarke at 21/06/2019 - 14:14
Thanks Jonathan. Its very tempting to just sell the lot up and be done with the aggravation. The problem is what to invest the money in afterwards?

Rob Crawford

18:05 PM, 21st June 2019
About 6 months ago

Reply to the comment left by JB at 21/06/2019 - 16:08
The investment problem is a different (nice to have) problem. You could become an armchair investor in new development properties. Care homes and student residents could be a good investment and lower risk as well!

Jonathan Clarke

22:07 PM, 21st June 2019
About 6 months ago

Reply to the comment left by JB at 21/06/2019 - 16:08When I get to the point when I think the same as you ( and it will happen ) I believe I would probably employ a bespoke property manager who would take virtually all the aggravation out of the equation . They would in effect mirror what I do , learn my style and their job would be to protect me from the majority of the various component parts which contribute to the mental burden of owning a portfolio . I would take a reduced income yes but by replacing me at least the investment and profits can continue and be self funding for the new post . And in 20 years when prices will likely double I would be so glad I stayed in the market .

Mick Roberts

7:47 AM, 22nd June 2019
About 6 months ago

Reply to the comment left by Jonathan Clarke at 21/06/2019 - 22:07
I started to try that JC, but u will probably already know, they don't do it like me & u.
They ain't as good.
They don't do that last little bit me & u would.
Incorrect decisions.
They 60% of what we do.
I'd like to Letting Agent the whole lot, but me tenants don't want to go Letting Agent even though I tell them u still have me as the owner who is not selling on u.
I'm getting to the point where I'm thinking, I may never be able to sell a lot of 'em as it is tenants homes for 20 30 40 years when I'm 70, but I will have to talk to em & say Look, when can I stop? When can I retire? When can I have my money out this house?
It's a tricky one as it's their home & they've being paying rent for 20+ years, so arguably I've only got the house cause of them.

I'm only in this position now, some say good position to be in, no one leaving, cause no other Landlords are taking my lot cause of Universal Credit & Selective Licensing http://www.selectivelicensingtruth.co.uk

Jonathan Clarke

8:37 AM, 22nd June 2019
About 6 months ago

Reply to the comment left by Mick Roberts at 22/06/2019 - 07:47
Yes I`ve interviewed a few but its a non runner. They dont think like me . But its my hang up as well I know . I`m not good at delegating . Too much of a control freak. Think I know best all the time . I need to let go some day and let others make mistakes and train them in my style. Richard Branson manages it ha ha . Most businesses will have staff that let them down and are on the take .

Someone told me just accept they wont ever be as good as you and write off an extra 10% of your business for the mistakes they will inevitably make . I like that approach as it massaged my ego . Treat their failings he said as a sunk cost rather than fretting about it .
So pay them 25K pa and also write off 10% of profits and get freedom . Once i got my head around that approach it sat better with me . So when i get too tired of what i do that`s what i may do if i don`t sell up . Or do a sort of JV with someone where they run it all . I support them for a year but then take a back seat . I incentivise them with some sort of cash bonus or leave them a free house in my will or something

It will happen one day - but not today

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