Paying too much for a property even though it cash flows well?

[Evan Appleton]

I've been doing a bunch of research and analyzing like crazy. It seems to me that people mostly focus on the cash flow of small multifamily investments, which I understand. When I analyze properties that are appraised at around 130k but are asking 300k, the impression I get is that people are ok with paying well above the actual appraisal value because the property is income producing. Am I right? I could understand how you would pay a high price as long as the rest of the numbers make sense but I also don't want to fall for something dumb and pay to much right out of the gate.