Unlocking the Hidden Value in Your Property: Highest Use Strategies & Knowing When to Exit

how to sell smart

In real estate investing, we spend endless energy debating when to buy, what to buy, how to finance it, and how to run our buildings. But the conversation that almost never happens—especially among mom-and-pop landlords—is the one that might matter most:

How do you sell smart?

Not just when to sell, but how you can unlock the highest possible value before you exit—and how to avoid being the one stuck holding the bag when major capital expenditures hit.

This was the focus of a recent episode of Real Escape Investing, where I revisited the topic of liquidation after our last Equity Builders Club event. In conversations that night, a few seasoned investors reminded me of something I didn’t include in the first episode:
✔ highest and best use conversions
✔ strategic exits before big-ticket building systems fail

Let’s walk through it—because selling well is a skill set just as important as buying well.

Why Highest and Best Use Matters When You Sell

When you’re ready to exit a property, the question isn’t simply “What is this worth?”
The real question is:

“What is this worth to the right buyer, in its highest possible use?”

A single triplex, for example, can be sold in several ways:

as a revenue property with tenants
as an owner-occupied plex
as three undivided condos

Each of these has a different buyer profile—and a different price point.

A Story: The Triplex That No Longer Looked Like a Triplex

A few years ago, I managed a tired, 100-year-old triplex in Hochelaga. The ground-floor tenant moved out, and that unit… well, let’s just say it had “good bones.” It had also been neglected by several generations of investors. The kitchen was dated, the bathroom sad, the layout choppy, and the basement was the kind of space only spiders truly appreciate.

Most investors would have listed it “as-is.”

But the broker I was working with at the time took one look and said, “This should be an owner-occupied sale.”

He convinced the owner to spend around $15–20K on a new kitchen, a modern bathroom (jacuzzi tub included), and light cosmetic upgrades. It wasn’t a full flip—it was a use conversion.

And the magic happened instantly.

Owner-occupant buyers—who would never have set foot in the building before—started walking in and saying things like:
“Oh… I could really live here.”

That triplex sold quickly, and for far more than it would have sold for as a pure investment property. The difference came down to one thing:

Investors buy numbers.
Homeowners buy feelings.
And feelings pay a premium.

Undivided Condos: More Risk, More Reward

Another high-use strategy is to convert plexes into undivided condos.

It’s not for the faint of heart. You need:

full vacancy
carrying capacity during the renovation phase
knowledge of condo conversion rules
tolerance for a reduced buyer pool (20% down requirement)

But if done correctly?
Each unit can sell at a significantly higher per-door value than the building would fetch as a revenue property.

It’s not for every investor—but for the right building in the right neighborhood, it’s one of the most powerful ways to unlock trapped equity.

Commercial to Residential Conversions: The New Frontier

As retail struggles and certain commercial corridors empty out, more investors are eyeing residential conversions.
Done properly, the end value can be extraordinary.

But again:
🚨 zoning matters
🚨 borough plans matter
🚨 heritage rules matter
🚨 ground-floor restrictions matter

Before touching anything, sit down with an architect and city planner.

Because this strategy can swing wildly between “home run” and “you just bought yourself a very expensive office space forever.”

Selling Before Big Capital Expenditures Hit

Now, here’s the other major point that never gets talked about openly:

A building ages. And certain systems age badly.

Plumbing, foundations, electrical infrastructure, galvanized pipes, cast iron stacks, aluminum wiring, porous concrete, brick that’s ready to spall, roofs that are one winter away from disaster…

If you own Montreal assets from the 1950s to the 1970s (or any older North American housing stock), many of these systems are nearing end of life.

And when they fail, they fail expensively.

**The Smart Investor’s Move: Sell Before the Clock Runs Out**

You don’t need everything to be brand new.
You do need a realistic sense of:

how much life is left
what the repair will cost
whether you want to bankroll the repair
whether the repair fits your 5-year holding horizon

If not?
Sell while the systems still have some usable life left, and disclose openly.

One investor once asked me, “Should I redo the roof before selling?”
I asked him:

“Will you make more than you spend?”

Because redoing a 30K roof rarely returns 30K+ in sale price—especially when the buyer would have negotiated that amount anyway.

Your job is transparency, not charity.