Everything you buy - EVERYTHING - especially food, has some wholesaling involved at some point be it in the raw materials used to manufacture it, the bulk discount obtained by shipping mass quantities, or the actual product you purchase at point of sale.SO, why should real estate be any different?

@David Jayne - In this situation, discounting the rent is a BAD idea, especially if the property already operates at a loss.

Downtown studios and 2 bedrooms would do well but they wouldn't do near as well with the larger families that Utahn's tend to have.But I've seen lots of houses where all it would take is adding a closet to get that 3rd or 4th bedroom so don't discount the 2 bedroom houses out there.

After all the schooling I saw that IT paid much better than civil engineering and became a software consultant.

Most VW guys I know (including myself) use a myriad of different systems/software/apps/etc to get what we need done to do deals.

Mark,It is not hard to buy REO's at a big discount all you need is money.Joe Gore

I would say that 20% would be a steep discount for a note with this much security.

Please note, this example is simplified for explanation purposes, discounted purchases and cost reductions per accounting rules will apply in some cases.

This has much to do with the steep discounts on these notes.Sellers or Realtors are not loan underwriters, these parties have a vested interest in doing a deal.

A buyer (especially in commercial) will ascertain a value based on fair market rents, appreciation, future depreciation, maintenance and market much like a purchase, the period over the option term is then discounted to its present value to reflect the value of an option.