There are 3 common questions that owners ask when they think about selling their property management company.
Those questions are:
In this article, you’ll learn our answer to each of these questions and how we approach each step throughout the process of buying other companies.
The first most common question owners have when selling their property management business is, “how much are you going to pay for my business?”.
There are many angles you can end up at a valuation for your business. Typically the metrics we look at are (in no particular order):
There are other factors that do influence the price such as:
Regardless of how we look at it, we’re going to give you a top-of-the-market offer.
Keep in mind there are a lot of variables that go into getting to a solid price point, and we’d have to learn more about your business to give you an exact number. However, when you sell to Evernest, know that we can be flexible around the terms that we offer you.
Essentially, whatever your goals are, we can make an offer that fits in with those goals.
The second most common question owners have when selling their property management business is, “what is the process around selling like?”
Glad you asked!
Here is our exact process in 9 steps (as well as a short video overview above):
The first process is calling us and having a conversation, where we’re going to learn some general information about your business.
We know these questions can be intimidating, but getting a clear picture of your business ensures you get the best deal possible.
For the second step, we’re going to send you an NDA, which basically says we’re not going to share any information you share with us. And we don’t want you to share any information that we share with you.
The third part of that is you’re going to send us a very little bit of financial information. Initially, this will include:
What we are looking for with these documents are (1) total revenue and revenue breakdown, (2) total units, (3) owner/market consolidation, (4) mean and median rents, and (5) occupancy rate.
A holistic view of your financial history will help us better understand financially how your businesses perform.
Keep in mind that you don’t (necessarily) need to worry if your business has struggled financially at some point – that doesn’t necessarily mean we aren’t still interested in buying your business.
The fourth part of that is we may come to see you. We love to do site visits, especially if we’re moving into a new market.
The next step in the process, the fifth step in the process, is the LOI, letter of intent.
We’re going to send you an offer on your business. And sometimes that offer’s going to have multiple ways that we can structure it so that you can choose one that best suits your needs.
Every deal is uniquely crafted and we try to find common ground with the seller.
It’s important to note that this is a tentative, non-obligatory offer. If accepted, then we begin the contract process. Signing an LOI doesn’t obligate you to sell your business to us. It’s just a good-faith promise that you intend to sell your business according to the preliminary terms outlined in the LOI if you sign.
The sixth step in the process is our contract and due diligence. Here is the kind of information we could/would assess during due diligence:
Additionally, we’re going to be going through the contract and due diligence phase at the same time. And the contract is basically getting the nitty-gritty details of what our agreement is with you. Don’t worry though, you don’t need to be scared about the legalese. But it is important that you understand the agreement.
The last step in the process, once we get the contract and diligence finalized, is the close.
And then post-close, we need you, anywhere from 30 to 60 days, working pretty hand in hand with us.
And then past that, we just need you to be available for about another 60 days by phone. Are you still unsure about working with us specifically?
If so, we totally understand—selling your career business is a big decision. We don’t blame you for wanting to sell it to someone you can trust!
To ease any concern, check out what Robert Locke, Owner-Broker at Crown Investor Institute had to say about selling to Evernest:
“Now, Matthew (CEO of Evernest) is a man that can get it done. I’m telling you when I gave him the information, he made a couple of phone calls… We had a letter of intent from Matthew in the fourth week of October and Matthew actually closed it before the end of November. Now, think about that. Typically, a buyer will tell you it’s a two to three-month process to go through all the due diligence to verify numbers, to look at tax returns, to do all kinds of audit points. And Matthew accomplished the whole thing in five weeks from the time he got the executive summary to the time he actually closed. And so my client was ecstatic. It was just a great experience to deal with Evernest.”Robert Locke, Owner-Broker at Crown Investor Institute
See our full interview with Robert below 👇
The third most common question owners ask when selling their property management business is, “what are you going to do with my team?”.
I know you’ve worked hard to build your team and we’ve worked hard to build our team. And it’s really important that if you found great team members, we can integrate them into what we’re doing here at Evernest.
Finding great people in this job environment is really difficult. And so if you’ve already found some great people, we want them to come to be a part of the Evernest team.
There you have it—the three most common questions owners ask when it comes to selling their property management business.
And I know that these questions probably led to more questions in your mind. And if that is true, I hope you’ll reach out. You can do that by visiting our website and filling out this form— we’d love to talk to you about your business.
Josh is the Director of Strategic Growth at Evernest. Josh brings over 10 years of operations and M&A experience to the company. His main goal? Help property management owners capitalize on their company’s true value.