A multiplex sells for some multiple of its net operating income. The multiple varies by neighborhood, building condition, and market conditions. The NOI is what you control.
Most owners decide to sell, call a broker, get a baseline appraisal, and discover that their building is worth meaningfully less than they hoped. The reasons are always the same. Rents are below market. Vacancy is too high. There is deferred maintenance the appraiser noticed and discounted for. The income story is supported by spotty documentation that a sophisticated buyer's accountant will pick apart in due diligence.
The owner has six weeks before listing. Some of these problems are addressable in six weeks. Most are not.
The eighteen-month version of pre-sale
The math of pre-sale optimization is straightforward. A multiplex that generates $80,000 in annual NOI sells, in current Montreal market conditions, for roughly 14–18 times that NOI. So a $5,000 increase in documented annual NOI translates into approximately $70,000–90,000 of sale price.
This means the operational improvements that took us only $10,000 of annual NOI in the previous post — rent capture, vacancy reduction, avoided deferred maintenance — are actually worth $140,000 to $180,000 at sale. They have to be in place long enough that they appear on the trailing twelve months of financials.
That is the case for the eighteen-month operating engagement. Twelve months minimum to get the operational improvements onto the trailing financials. Six additional months of buffer to handle any tenant turnover or capex execution that takes longer than expected.
What buyers actually look at
A sophisticated multiplex buyer's accountant will request:
- Last 24 months of bank statements
- Last 24 months of every lease, including amendments and renewal notices
- Last 24 months of vendor invoices, receipts, and capex documentation
- Annual rent increase notices filed with TAL
- Tenant payment history
- Insurance claim history
- All property tax bills, paid receipts, current mil rate calculation
- Building inspection reports if any have been performed
The owner who can produce this in a single organized package signals operational discipline. The buyer's confidence in the income story rises. The cap rate they apply tightens. The price they offer rises.
The owner who scrambles to assemble this in six weeks signals the opposite. The buyer's accountant flags inconsistencies. The buyer applies a wider cap rate. The price drops.
What we deliver in an eighteen-month engagement
For a 4–12 unit Montreal building, our pre-sale optimization engagement targets:
- Documented NOI uplift of $20,000+ on the trailing twelve months
- Rent capture to within 3% of market
- Vacancy reduced to under 4% of available unit-months
- Capex priorities executed in valuation-impact order, not aesthetic order
- Document repository organized to broker-ready standard
- Tenant quality stabilized (no tenants in active dispute or pending eviction at listing)
- Pre-listing valuation refreshed by an independent appraiser
The fee structure aligns our incentives with yours: a base retainer of $15,000–$30,000 over the engagement, plus 1–2% of the sale-price uplift over the original baseline appraisal. If we do not produce documented uplift, we do not earn the performance fee.
This is the highest-leverage eighteen months a multiplex owner ever spends. We accept two of these engagements per year.