How a direct buyer actually prices your building
Income property is valued on net operating income and cap rate. As a clearly labeled illustrative example: a building netting $60,000 a year, valued at a 7% market cap rate, supports a price near $857,000. Your building's number depends on its real trailing twelve months and your market — which is why serious buyers ask for the T12 before quoting a firm price, and why you should be suspicious of any buyer who doesn't.
The documents to gather before you talk to anyone
Three things: the T12 (twelve months of income and expenses), a current rent roll, and copies of the leases. Owners who have these ready get firm offers in days instead of weeks — and stronger offers, because the buyer isn't pricing in uncertainty.
What happens with tenants
Occupied is normal — in fact, to an income buyer it's preferred. Leases transfer, security deposits transfer as a closing credit, and tenants usually notice nothing beyond a new payment address. You do not need to empty a building to sell it, and vacating a performing building usually destroys value.
The honest trade-off: direct sale vs. listing
A marketed listing exposes the property to the most buyers and can find the highest bidder — over a months-long process with commissions, showings, tenant disruption, and retrading risk. A direct sale is private, faster, and commission-free, and the offer reflects that the buyer is taking the speed-and-certainty side of the trade. Neither is "right." It depends on what you're solving for: maximum exposure, or a certain outcome on your timeline.
When owners typically reach out to a direct buyer
The common triggers: tired of managing, a partnership or estate that needs resolving, a 1031 exchange clock already running, deferred maintenance that no longer pencils, or simply wanting out without making it public. If any of those sounds familiar, a conversation costs nothing and creates no obligation — and you'll get more from it if your documents are ready.