A Guide for Residential Brokers: How to Sell Multifamily Buildings in Los Angeles

Most Los Angeles brokers know single-family homes and condos inside and out, since those make up the majority of the housing stock here. But when a client asks you to sell a multifamily building, the process can feel very different. Selling apartment buildings isn’t just about comps and curb appeal -it’s about income, expenses, and long-term potential.

Think of it this way: a buyer isn’t just buying a piece of real estate; they’re buying an operating business. They want to know how much money that business is generating today and how much more it could produce with improvements.

Some buyers only want turnkey, fully renovated buildings or new construction. Others -including The Beverly Group - look for value-add opportunities where rents are low or the property needs work, and they’re prepared to invest heavily to reposition the asset.

As a broker, your job is to understand what the property is earning now, what it could earn, and which type of buyer is the best match for your client.

Single Family Homes vs. Multifamily: The Big Differences

Unlike homes, multifamily properties are valued on income and income potential. Buyers don’t just ask, “What did the place down the street sell for?” They underwrite the numbers:

• Operating Income: What tenants are currently paying and the total gross rent collected each year.

• Operating Expenses: The costs to run the property: utilities, insurance, taxes, property management, and maintenance. Experienced buyers will also project how these costs may change under new ownership.

• Net Operating Income (NOI): NOI is essentially the property’s annual profit: income minus expenses. In multifamily sales, NOI drives value and underpins every serious offer.

As a broker, gathering this information upfront is critical. Without it, you risk setting unrealistic price expectations for your client.

Current Value vs. Potential Value

Most of Los Angeles’s multifamily stock was built before 1980. While some of these buildings have been upgraded, many still have older systems, deferred maintenance, and below-market rents. Some may even require seismic retrofits or other code updates.

That’s why understanding buyer profiles matters:

• Passive Investors: Often doctors, lawyers, and professionals seeking stable income. They buy clean, renovated properties with market rents. These investors will pay a premium for reduced risk, but the upside is limited.

  
  

• Value-Add Buyers: Full-time investors with property management and construction teams. They buy older buildings with deferred maintenance, code violations, or long-term tenants. These properties often don’t qualify for traditional loans, so buyers rely on cash or bridge financing. The right value-add buyer brings capital and a proven track record to reposition the property.

  
  

👉 Backed by a long track record in Los Angeles multifamily, The Beverly Group is a value-add buyer specializing in acquiring properties with deferred maintenance and complex situations. Contact us today get a valuation and our offer to purchase for your client’s multifamily building.

Rent Control (RSO) vs. Market-Rate

In Los Angeles, it’s critical to know whether a building falls under the Rent Stabilization Ordinance (RSO).

• RSO Buildings: Built before October 1978, these properties have capped rent increases and strong tenant protections. Buyers discount them because future income growth is restricted.

• Non-RSO Buildings: Newer properties exempt from RSO, though still subject to statewide tenant laws like AB 1482. These allow more rent flexibility and often command higher prices, especially if renovated.

  
  

Identifying rent control status early shapes the buyer pool and prevents surprises later.

Steps to Selling Multifamily

Once you’ve identified the property type and ideal buyer, here are the steps to guide the process:

1. Gather Paperwork

Investors won’t move forward without the numbers. Prepare:

• A rent roll with tenant names, rents, deposits, and lease terms

• Copies of leases or tenant estoppels

• Utility bills, tax records, and expense history

• Disclosure of any code violations or retrofit requirements

💡 Pro tip: Organize everything in a digital folder (Dropbox, Google Drive). Clean documentation signals professionalism and helps buyers move quickly.

2. Position the Property

In residential sales, photos and staging matter most. In multifamily, the financials matter first. Highlight:

• Current income and future upside potential

• Recent capital improvements (roof, plumbing, electrical, HVAC)

• Occupancy history and tenant stability

• Neighborhood demand and nearby comparable sales

Present the property as both a building and an income-producing business.

3. Find Active Buyers

Multifamily deals move when the right investors see a fit. Don’t just post on MLS and wait.

• Reach out to groups actively buying in Los Angeles, including The Beverly Group

• Verify proof of funds or financing capability

• Consider off-market outreach if your seller values discretion

  
  

👉 At The Beverly Group, we buy multifamily properties as-is, with tenants in place, and pay broker fees to brokers who bring us deal we purchase.

4. Negotiate & Verify

Due diligence goes beyond inspections. Buyers will:

• Verify leases and collect tenant estoppels

• Review operating expenses and tax history

• Inspect building systems and deferred maintenance

  
  

Set expectations with your seller early so nothing derails the process.

5. Close the Deal

Once contingencies are cleared, escrow handles payoff of loans or liens, funds transfer, and title records the deed. With proper preparation, closing is straightforward and efficient.

The Bottom Line

Selling multifamily in Los Angeles requires a different playbook than residential. It’s about income, tenant protections, and property condition - not just staging and comps. With the right documents in place and by connecting with experienced buyers, you can deliver results for your client and expand your own business into the multifamily space.

Partner With Us

At The Beverly Group, we actively buy apartment buildings across Los Angeles. If you’re a residential broker with a client considering selling, we can help you close smoothly and quickly - and we pay broker fees.

📩 Contact us today to discuss your listing and see if we’re the right fit.

Frequently Asked Questions for Brokers

Do brokers still earn commissions on multifamily sales? Yes. Brokers earn a commission at closing, just like in residential sales. In addition, The Beverly Group pays fees to brokers who bring us direct opportunities.

What paperwork do multifamily buyers expect upfront? The essentials are the rent roll, leases or tenant estoppels, utility bills, and expense history. Without these, most serious investors won’t make an offer.

How is pricing determined for a multifamily property?Pricing is based on Net Operating Income (NOI) and the property’s cap rate, not just comparable sales. Financial performance drives value.

Can you sell a building with tenants still in place?Absolutely. In fact, most multifamily buildings in Los Angeles are sold occupied. Buyers assume the leases and become the new landlord.

Do buyers purchase buildings with deferred maintenance or code violations? Yes. Many buyers -including The Beverly Group- specialize in acquiring properties with challenges. The key is finding a buyer with the capital and experience to close even when a property won’t qualify for traditional financing.