Why Isn't this deal Selling??!

[Lance Johnson]

Hey guys my name Is Lance, I'm a real estate investor in Cleveland, Ohio.

I recently put a multifamily property under contract that from all the numbers, appears to be a KILLER cashflow property.

I'm asking 88k for a 4 unit property that consists of 2 Duplexes with their own parking and everything. About 5000 will make them rent ready and we estimate 30k or less will make them showroom quality. 

Thats 22k per door and a great cap rate no matter how you cut it.

The neighborhood is a solid C and is even growing on paper. Crime isn't terrible, more than half the residents have college degrees and the street it's located on isn't a ****hole. 

My seller needs the property gone by Friday and I need to figure out why I cant find buyers! Please help fellow investors!

[Brian Garlington]

@Lance Johnson

My guess?

If I read between the lines on this it seems like you have a fourplex for sale where the "potential rents" are $2,400. Does potential rents mean it's vacant?  If so, that means someone has to buy a place that has no money coming in.

The fourplex also needs some work.....anywhere from $5000 to $25000. What do the comps say? 

Last but not least....NOBODY likes to move in the Akron Cleveland area from November through March. This means if someone were to buy the property "by Friday".....it will still take probably another 2 to 4 weeks to "close". That puts us at mid to late October.  Then another 2 to 4 weeks to "fix up" while it's getting COLD outside means we are in the middle to late part of November at the earliest before the new owner can even hope to START getting tenants in there. To some investors that may be too many unknowns to want to take on.

I say this with probably a whole lot less experience than other investors on here but i have 2 duplexes and two SFRs in Cleveland as rentals and I have had the (very) unfortunate experience of trying to get renter in the November December timeframe in Cleveland. I was literally calling and emailing people that I knew had section 8 vouchers that said they weren't interested because it's too cold to move. I still remember a woman that told me she doesn't work, she is on SSI,...and has 2 pit bulls and nobody wants to rent to her because of her lack of a job and the kind of pets she has.. She was literally sleeping on a friends couch to get by...I told her come meet my property manager and he will show you the place....this was in a "C" neighborhood by the way......She called the day of the appointment and said, it was just to cold to go look at any places, but in a couple of months "I should call her back".

So Lance this is what i would do if I were you

1. Find a renter or two RIGHT NOW for the property. Advertise TODAY and make sure you advertise BELOW market rent,...just get some bodies in there ASAP. When you give them a lease make sure it's a MONTH to MONTH lease. This way you can advertise the fourplex is for sale that has at least one renter in it....possibly two. Place them in the units that need the least amount of work.

2. Look at what comps say for other duplexes sold in the area....NOT what others are selling for...but what others have sold for recently and then drop your asking price accordingly.

Hope this helps.