Reasons deals are too good to be true?

[Account Closed]

I've been practicing analyzing deals found on Loopnet, and curious why certain properties are listed for months and some close to a year. Especially when the numbers APPEAR to work? The areas of interest are very populated and active, like Orlando and Jacksonville, Florida.

My question is for the multifamily investors that have gone after these deals, and soon discovered why they are too good to be true.. what are some reasons you found? I understand this can be a very broad answer especially ones like major structural damage or total rehabs, but some of these listings with numbers and photos etc. just appear to work. Thanks!

[Brian Burke]

If you are analyzing multiple stale listings on LoopNet in strong markets and finding the numbers are working, there is only one explanation.

You are running the numbers incorrectly.  You are either missing something or the tool you are using is performing inaccurate calculations.

You are good to question this before you jump in and make mistakes.  But don’t beat yourself up over it—this is very common when you are getting started.  The next phase is you’ll see good deals in strong markets, analyze them, then watch someone pay a price a lot higher than you were willing to pay and then say “I’m analyzing deals and other buyers are out of their minds, paying way too much!”  Which in some cases might be true but could also be a sign that you aren’t doing it right.

Analysis of commercial real estate is an art form.   A skill that develops over time.  You’ll catch on...just keep analyzing and follow the ones that trade and the ones that don’t.  One day it will start to click.