arfa-
In some neighborhoods, it's simply that the prop does not cashflow, but the investors are noobs who don't see it (or bother to calc it out)-- they just want to be "real estate investors".
There was a 4plex like this near us-- changed hands every year or so, always for about the same (high, non-cashflowing) price. Each "RE investor" would buy it, figure out it lost money after a year or so, then put it back on the market.
RK had some brilliant insight on places like this-- he wasn't as interested in "knocking down" the price as figuring out how to make it cashflow. Sometimes that means getting a very different kind of loan. Sometimes, it means changing the intended *use* to something that brings in lots more money (that's our model).
And yes, sometimes it's just buying it for less-- provided that the lower purchase price allows you to cashflow!
-Russ H.
In some neighborhoods, it's simply that the prop does not cashflow, but the investors are noobs who don't see it (or bother to calc it out)-- they just want to be "real estate investors".
There was a 4plex like this near us-- changed hands every year or so, always for about the same (high, non-cashflowing) price. Each "RE investor" would buy it, figure out it lost money after a year or so, then put it back on the market.
RK had some brilliant insight on places like this-- he wasn't as interested in "knocking down" the price as figuring out how to make it cashflow. Sometimes that means getting a very different kind of loan. Sometimes, it means changing the intended *use* to something that brings in lots more money (that's our model).
And yes, sometimes it's just buying it for less-- provided that the lower purchase price allows you to cashflow!
-Russ H.
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