Posted by Michael on September 07, 2006 at 22:59:26:
Sounds like you live on one of the coasts. This is a common problem for people who live in California or something. The housing values have risen too much and CAP rates are pushed way low.
A lot of people have just started to invest country-wide and manage their properties from afar.
Deals don’t seem to make sense - Posted by Chris
Posted by Chris on September 07, 2006 at 21:42:04:
A lot of the commercial building/apartment building in my area are 2-3 units. With say an average rent of 1000-1200 per month. The buildings at the low end are in the mid 300K. The numbers/cash flow don’t seem to work on these properties if not putting a lot down.
Is this the standard - do you have to put down a large chunck of cash to lower there debt payment to get the property to cash flow. I am not in the position to own a building with out positive cash flow and just bank on appreciation.
Please Advise.
Re: Deals don’t seem to make sense - Posted by ray@lcorn
Posted by ray@lcorn on September 08, 2006 at 11:05:58:
Chris,
Nope, that’s not the standard for a smart dealmaker, but it’s certainly the approach a lot of buyers have been taking in recent years. Even then the returns are in single-digits. In some cases a bond would make more money, and you don’t have to show up!
When they don’t make sense, say, “Next!”
ray