Multi-Family Sales on the MLS

[Ethan Beard]

Hello All,

I am new to the Real Estate game with only a single duplex under my belt. Until I am ready to pursue my next property I continually practice property analysis on the MLS listings. Majority of the properties that I analyze perform at a negative ROI, yet I continue to see these properties sell. My question is are folks regularly buying these poorly performing (most likely) properties in hopes that it works? Or is there a method of acquiring a property that I have not heard of? I am familiar with Traditional property acquisition and currently schooling up on the BRRRR method. However, neither of these methods would work for the mostly turn-key properties that are selling and reach above 8% ROI.

Any insight as to what is occurring would be greatly appreciated!

[Justin Moy]

In the residential space many are not looking to cash flow, they're either living there and therefore expect to pay out of pocket every month, and if they're house hacking are likely ok with a very small output of cash every month or breaking even because their 'payment' is a very cheap mortgage or a free living arrangement. 

Others do bank on appreciation, or possibly need to 1031 into something to avoid their taxes and don't care as much about making a cash on cash return.