cap rates and realtors

[Frank Gossman]

Hello Everyone,2 Questions: Cap rates I live in Bradenton,Sarasota fl I have looked at a number of propertys a few in very good locations and cash flowing Problem I'm haveing is
these propertys are capping out at anyware from 6 to 8% I'm told by the consultants I'm useing I need at least a 10% cap. Now when I tell this to a realtor they laugh and tell me I'll not get a 10 cap in this area I really don't think they will accept anything unless
it is very very close to thier list price. Don't mention anything crative to purchase their responce is NO THE SELLER WON"T GO FOR THAT THEY WANT CASH. Sorry so long please your thoughts please !! Thank you in advance !!

[Dory Peters]

I've also heard the same noise, and I ignore them. I submit offers that make sense to me. I almost always submit every offer as a multiple offers contained in an offer format: 1) one offer is with 100% seller financing, 2) one offer is all cash, and 3) at least one offer has some cash and some seller financing. I ask the seller to choose the one that makes the most sense to him/her/them. I learned this technique (sometimes referred to as transaction engineering) from one of my mentors.

I actually had a commercial agent in Dallas get pretty upset with me over the format of my offer. He told me that "in my [20+ or something like that] years, I've never seen an offer like this one" insinuating that it was too complex. Whatever. That mentor (who specializes on residential foreclosures) has been using them for years, and he's taught hundreds of people over the years to use this same technique. So, I knew I wasn't the only one using them, and I've been using them for a while nationwide on both residential and commercial properties. He didn't like my answer; I told him basically "it is what it is" and to let me know when he was serious.

By the way, that mentor also taught me to never defend my offer. After all, it's usually a waste of time. Most sellers (and their agents) don't care about the reasoning behind the structure of one's offer; they only care about getting their price. In the end, the seller will accept/counter/reject the offer anyway.