Seeking Knowledge: What Am I Missing Here? Mutlifamily VS. Certificate of Deposit

[William Coet]

Hello!

Why are people paying these prices!?  They have been for years!  Numbers don't pencil out for a 30 year mortgage, but property still sells!  If the buyers are cash buyers why don't they just put their money in a CD and earn 5%?! 

Details:

I am looking at a market where for years multi-family has been selling for a 10x multiple of gross rents.  With today's mortgage rates a 30 year mortgage doesn't even work!  Nonetheless, the properties continue to sell! 

Why?!

Who is buying these, and why?! LOL

Thank you!

[Bjorn Ahlblad]

I am flummoxed from time to time as well. There are evidently a ton of investors that must have very different criteria for returns and underwriting! Just sayin'!