MLS Pricing too high, no room for profit.
I made an offer this weekend on a property that was priced too high to make a profit. Listed for 320k, with rental comps around $2500/mo, which would cashflow negatively ~$500/mo, no thanks! ARV was 400k on this and it was a 1972 time capsule. I offered $280k and everyone acted like I was stealing out of the collection plate at church. I didn't care, I'm not trying to please the world, I'm making a financial decision that will either reward or hinder me.
My offer would have negatively cashflowed -$1/mo, however the appreciation and equity would have made up for no cashflow so I was comfortable at my offer price. I don't see how anyone was going to make money on this one, so it must have been owner occupants making emotional decisions.
Is anyone experiencing something similar?
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Ive been hearing people with the same complaints for the entire 20 years Ive been in real estate. Year after year, decade by decade goes by and they keep not buying because they keep saying the numbers dont make sense....sellers want too much money...I cant cash flow enough.
I keep buying year in and year out regardless of market conditions. You said the property would rent for $2500...Id pay $500k in my market for a property that rents for that in my market happily.
- Russell Brazil
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