Buying investment property at retail?

[Neil J.]

Hello Bigger Pockets,

I know the overall goal in real estate investing is to purchase below market value. But I came across an interesting situation where I can purchase a 3 family cashflow property with 100% financing. There is two catches, one is that I would have to purchase at market value, and two is that its not located in the nicest area. I ran the numbers and it seems that the property will cashflow at about 12k a year, Bad idea? 

Any input would be GREATLY appreciated!

[William Hochstedler]

What is everybody talking about here?

@Neil J. is saying that, for no cash out of pocket, he can acquire a $300K property.  The cash-on-cash return is therefore infinite.  The tenants will pay the mortgage and in 30 years he will have a $300K asset free and clear with no appreciation.  Meanwhile, he will be receiving the tax benefits of depreciation while pocketing $1000 a month.

Furthermore, if it's seller financing, he won't be tying up an institutional residential loan.

If the numbers truly work meaning maintenance and CAPEX won't cost a fortune and the value of the property won't tank, this looks like a great deal.

I have a lot of clients that don't care about market value and will pay well over it if they can get into it with little or no cash and it has true non-negative cash-flow.

All of @Anthony Dooley's comments assume you are putting cash into the deal.  Show me how I can get 9% in the stock market by investing $0.