The Situation
When a long-time client approached us regarding the sale of his apartment properties at 5736 and 5742 Virginia Avenue, he wasn’t interested in a traditional marketing process.
Having recently received a step-up in basis and nearing retirement, he was exploring ways to simplify his portfolio and reduce the responsibilities that come with active property ownership. However, he had two non-negotiable requirements: the properties were not to be publicly marketed, and any sale would need to achieve a specific minimum price.
Our challenge was to identify a qualified buyer while maintaining complete discretion and achieving the seller’s desired outcome.
The Opportunity
The portfolio consisted of two adjacent apartment buildings totaling 20 units in the heart of Hollywood’s Studio District.
Together, the properties featured over 13,000 square feet of improvements on approximately 15,000 square feet of land. The assets benefited from LAR3 zoning, TOC Tier 2 incentives, and strong long-term fundamentals in one of Los Angeles’ most desirable rental markets.
In addition, many of the existing rents remained below market, creating a compelling value-add opportunity for investors seeking future income growth and long-term appreciation.
The Strategy
Rather than launching a public marketing campaign, we leveraged our network of active multifamily investors and approached a select group of qualified buyers.
One of our preferred private clients immediately recognized the value of acquiring two adjacent Hollywood apartment buildings with significant rental upside and long-term investment potential.
While both parties were motivated to complete a transaction, a gap remained between the seller’s pricing expectations and the buyer’s return requirements. Instead of focusing solely on price, we worked with both sides to structure a solution that aligned their objectives.
Bridging the Gap
The answer was seller financing.
By incorporating seller financing into the transaction, we were able to bridge the valuation gap and create a structure that benefited both parties. The seller achieved the pricing necessary to justify a sale, while the buyer secured favorable financing terms that improved the property’s overall investment performance.
What initially appeared to be an obstacle ultimately became the solution that allowed the transaction to move forward.
The Result
The transaction successfully closed off-market without ever being exposed to the public marketplace. The seller was able to:
• Achieve his target pricing
• Maintain complete confidentiality throughout the process
• Reduce the management responsibilities associated with owning a 20-unit apartment portfolio
Simplify his holdings as part of his long-term retirement strategy
• Preserve an ongoing income stream through the seller financing component, allowing him to continue generating passive income while stepping away from active property management The buyer acquired:
• Two adjacent Hollywood multifamily properties
• A rare off-market acquisition opportunity
• Significant rental upside and long-term value-add potential
• Financing terms unavailable through conventional lending channels
Key Takeaway
This transaction demonstrates that successful multifamily sales are often about more than simply finding a buyer.
By understanding the seller’s retirement objectives, leveraging existing relationships, and creatively structuring the financing, we were able to deliver a solution that helped both parties achieve their goals.
For apartment owners considering retirement, portfolio reduction, or a transition away from active management, seller financing can be a powerful tool for preserving income while creating liquidity and reducing operational responsibilities.
Yitzy Davis – Total Realty Group – Senior VP and Sales Manager
559.330.9709 – YDAVIS@TOTAL-REALTYGROUP.COM
KW COMMERCIAL – DOWNTOWN LOS ANGELES 963 Colorado Blvd Los Angeles, CA 90041