10 unit apartment LoopNet and Facebook

6 Replies

So far I’ve only invested in single family homes. I’m looking to invest in something larger but was curious as to why it seems many of these properties seem to stay for sale for a long time? With single family houses they seem to fly off the shelves. I’m noticing many properties (10 unit) on LoopNet setting idle. Also I see many people post on Facebook about multi family units( a lot of times the same guy pushing a property). Is this something to do with occupied buildings and tenants not paying or is it harder to get commercial loans? Just curious if I’m missing something everyone else is afraid of?

I would ask your realtor about average days on the market for that particular area, price range, and what you are looking at. The number one reason why properties don't sell is because the sellers priced it too high. When they decrease the listing price and it continues to sit the on the market, people wonder if there's something wrong with the property. In many cases, its just because they priced it too high in the beginning. Obviously there could be other reasons, but I would check with that first.

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I’d also add that, at least in my market, LoopNet has maybe only 25% of the available inventory. And that’s only after the deals have been picked over by everyone else. Try CREXI as another good place to look deals. Get in touch with local apartment brokers as well. 

@Cason Acor hey thanks for the information. I just looked up Crexi. You’re right there does seem to be more on there. Thanks for your help and I will look to see if there are any brokers nearby as well.

@Caleb Campbell

SFR sellers sell when they desire to move or need to sell, so they eventually listen to the market concerning price. If a commercial property is earning a good ROI, the owner can sit on the property forever. So many just list thinking if someone's crazy enough to pay their price they'll sell, otherwise they'll just be happy collecting rents. It's the negative cash flow properties where the pressure builds on the seller to sell at market pricing.

Also, for a number of reasons demand and supply are out of whack in the home market right now. Sellers whose home was worth $400k 12 months ago are selling for $500k and this is providing a lot of impetus to cash out.

Other than both commercial property and single family property are both real estate, they are in many ways two different animals. A commercial property is an investment, while a SFR can be an investment, but is more often a consumer good.

@Don Konipol thank you for the insight. I never looked at it that way. I just assumed no one was paying and that was the reason for them selling. I never thought about the fact they may be just trying to see if someone will pay their ridiculous price they’re asking.