I will preface this by saying I am new to real estate investing, and really excited to learn and get a better education in REI. Something I am trying to understand better is; "If a property is such a great investing opportunity (high CoC ROI, with a great cap rate), why are people selling that property?"
I understand that there are different types of investing (wholesaling, flipping etc.) that someone can pursue, and could be a valid reason, but is there anything else that I am missing here? Why sell a great deal when it could be more valuable to hold the asset earn have cash flow?
Boston, MA · Member since 2017 · 209 posts · 126 votes
7y
I dont think there is a simple answer to this but I can try. It greatly depends on the deal and who is posting it. They may or may not even own the property. Also, there are plenty of investors who don't want to hold, or they are trying to trade up. So it is really on you to do your due diligence, it could be there is a bad roof or terrible tenants and they just want to get rid of it, OR maybe it cash flows great and they just want to cash out so they can pull their equity out.
Lastly, yes if a deal is too good to be true, you should certainly go in with your skepticals on.
I dont think there is a simple answer to this but I can try. It greatly depends on the deal and who is posting it. They may or may not even own the property. Also, there are plenty of investors who don't want to hold, or they are trying to trade up. So it is really on you to do your due diligence, it could be there is a bad roof or terrible tenants and they just want to get rid of it, OR maybe it cash flows great and they just want to cash out so they can pull their equity out.
Lastly, yes if a deal is too good to be true, you should certainly go in with your skepticals on.
Rental Property Investor · NC · Member since 2018 · 776 posts · 776 votes
7y
@Nathan Veech I would also add that some properties you just can't get traditional financing on because they are down to the studs, etc. It does not make it a better deal just because it's posted on BP. I like how @Jarrod Kohl put it, it's not an excuse to not perform your due diligence.