Why Small Multifamily Properties Don’t Sell
- John McDonald
- Jan 16
- 2 min read
"Why did my multifamily building fail to sell?"
Part 2: Failure to Tell the Investment Story
Most 2–10 unit multifamily owners believe that if the property is clean, occupied, and priced “reasonably,” buyers will see the value.
In practice, that assumption often proves costly.
Small multifamily properties rarely fail to sell because buyers dislike the asset. They fail because buyers cannot quickly understand how the deal works for them.
The Problem: Listings Describe Buildings, Not Investments
Most small multifamily listings focus on factual details such as:
Unit count
Bedroom and bathroom mix
Recent renovations or capital improvements
While this information is necessary, it is rarely sufficient.
What is often missing is context — specifically:
Who the ideal buyer actually is
Why this property fits that buyer’s strategy
Where the upside exists, if any
Without that narrative, buyers are left to fill in the blanks themselves.
What Happens When the Story Is Missing
When buyers are forced to guess:
Conservative underwriting becomes the default
Risk assumptions increase
Offers become cautious — or never materialize
Some buyers will move on immediately, not because the deal is bad, but because too much interpretation is required.
In a competitive investment environment, clarity wins. Ambiguity does not.
Buyers Don’t Buy Properties — They Buy Strategies
Every serious multifamily buyer approaches an asset with a strategy in mind:
Stable income
Value-add opportunity
1031 exchange replacement
Long-term hold with rent growth
Owner-occupancy with supplemental income
If the listing does not clearly indicate which strategy the property supports, it effectively speaks to no one in particular.
That disconnect alone can stall an otherwise viable transaction.
The Commercial Broker Difference: Narrative With Purpose
A commercial broker does more than describe the property — they frame the opportunity.
That process typically includes:
Identifying the most likely buyer profiles (local investor, 1031 buyer, value-add operator, owner-occupant)
Highlighting rent gaps, operational inefficiencies, or unrealized income
Addressing risk directly rather than avoiding it
By doing so, the broker answers the buyer’s most important question early:“How do I make money with this asset?”
Why This Matters in the 2–10 Unit Market
Small multifamily buyers are often:
Highly analytical
Capital constrained
Balancing risk against financing realities
When the investment story is clear, buyers can quickly determine fit and move forward with confidence.
When it isn’t, they default to hesitation.
Final Thought
A listing that only describes a building asks buyers to do the work themselves.
A properly positioned multifamily offering explains the strategy, frames the risk, and clarifies the upside — before a buyer ever tours the property.
That clarity is often the difference between interest and action.
Coming Next in This Series
Part 3: Marketing to Everyone Means Selling to No One - Why broad exposure often attracts the wrong buyers — and repels the right ones.
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