Over valued buildings

[Nicholas Weckstein]

Has anyone else noticed how so many sellers have absolutely no idea how to value they’re buildings correctly?

Things are only worth what people are willing to pay for it. In this game things are only worth what the bank says they’re worth (appraisals). So I base my formula on the banks formula.

I see so many buildings for sale where the owner isn’t subtracting 25% for maintenance vacancy’s and management.

It kills so many deals.

Great example. Was looking at a really nice 3 unit building. 2 apartments and a nice storefront. In the valuation he was asking a 10% cap. But never accounted that 25%. Needless to say my valuation and his were quite different.

Is it me? Or is it sellers thinking they’re stuff is worth more than it is?