Commercial realtors and their faulty analyses

[Christian Carson]

I just got off the phone with a gentleman selling two duplexes in my target buy area. He asserted that the prices asked were a "solid 8.5% cap," but a quick glance at the numbers reveal that all of the soft costs - capex, maintenance, vacancy and property management - were disregarded. I see this on a lot of properties.

Conversations about these numbers with brokers can get quite awkward -- I've had some tell me that it's industry standard to price multifamilies this way (no way!) and others say that the price is the price.

Are these kinds of deals just dead in the water or has anyone had any success sending off an estimate of the true value based on actual expenses? These deals would be worth it if they actually delivered 8.5% cap.