Lender · Sacramento, CA · Member since 2013 · 84 posts · 10 votes
So in my searches I've noticed some properties stay on market for quite awhile. One example would be a 4 plex that just had its priced lowered to 118k from 130k. It's been listed for 5 months.
Maybe rehab is more than I'm thinking but if this place is beat up putting 20k into each unit, 80k total, will get you around 500-600 in cash flow monthly after calculating in monthly vacancy, fixes, insurance, taxes, etc.
So my main question is, what do you see in some properties that seem like good deals but have issues and cause you to not get near it?
Contractor · Phoenix, AZ · Member since 2013 · 4 posts · 1 vote
12y
Cap rates depend on the area. In an economically depressed area you would want to get a higher cap rate. The thinking is that a higher cap rate is needed to offset the higher turnover rates and higher damages tenants cause to the property. Real estate cap rates are the everywhere, specific to your local area.
Price certainly is a main factor. However, if you are lucky, there could be other factors. One of REO houses I bought had been on the market for a long time with good condition in a very nice neighborhood. The only problem is google maps. The google maps somehow put this property in a remote location no one cares about. I insisted to take a look of this property because I was curious on why the location of this property is almost out of state boundary. When we submitted our very low offer just for testing, they immediately accepted it. I wonder whether we were the only one ever submitted an offer. Then there is another time that the listing agent put incorrect property description. Instead of 2 car garages, he puts 2 car carports, which definitely limit some people's search results.
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
12y
@Jane Z. you're so right. I often also see properties with the wrong zip code. That will eliminate them when someone is searching under a zipcode in a particular neighborhood