Is it a red flag if a property's price has been decreasing?

[Friday Delorio]

I analyzed a listing that had good monthly cash flow, and high CoC return. According to zillow, however, the price had went from 130k down to 100k within the past few years. What is this an indication of? Does this matter at all as long as the numbers are good?

[Nathan Gesner]

Quote from @Friday Delorio:

Just because something cash flows well on paper doesn't mean it will in reality. I can find you a property for $30,000 that will rent for $1,000 a month but it will have high turnover costs, more frequent turnover, higher delinquency rates, high crime, etc. In other words, it's a ton of work to make that money and won't make what you think it will make on paper.

Determine what a property is worth to you and offer on that. If the property value has actually dropped over the last couple of years, that's a terrible sign because property values have increased everywhere, even in the slums of Chicago or Baltimore.

As for zillow...