Low Balling vs Realistic Offers for Properties

[David Edwards]

Hello BP,

I'm new to this so my apologies if this is a dumb question. 

I'm looking to get involved in REI in the Seattle / Tacoma area. I've been researching house hacking and doing the 4 square analysis on a number of properties I've been finding on Redfin and from an agent I've been talking to. The issue is that I'm finding most properties up for sale don't seem to pencil out to having any positive cash flow (like gross income is 300 less than the anticipated mortgage+taxes+insurance costs). I figure this might be a reality of the market in Seattle but also where my question on offers begins.

Do you as an investor looking for multifamily properties make offers well below asking (not just 20-30% to make money when buying) to get the numbers to work on your end, or do you largely just assume that the properties are inflated and that now isn't the time to pursue them? 

I've been listening to the back catalog of BP podcasts and strangely enough this was addressed in the quick tip for Episode 198 and is summarized basically as not knowing the sellers motivation means that heir asking could be real or arbitrary and you never know if you don't ask. 

If anyone has some real life examples or thoughts on how you would approach a situation like this or I guess the Seattle market please let me know. 

Thanks for the read everybody,

-Dave