Greeting and a question about rental from newbie

[Yippi Jim]

Hi guys! I am Mick and new to the real estate. I graduated from Texas and now working in SF, CA as a developer. I want to get into rental property and generate passive income. And now I am planning to do long-distance investing, maybe in Texas since I went to school there, but of course open to recommendations.

Thank you for reading so far, and here is my first question: Today I followed the beginner guide and went to loopnet.com to browse some deals. One deal seems pretty good. It is a condo that currently has tenants. The post also lists the price ($140k), rents ($1500/month), operating cost($5500), and cap rate（about 9%). It also does the calculation which shows a good amount of cash flow. My question is, what are some of the motivations for the owner to sell it if it keeps making money? Any tips to check whether it is fake or as good as it seems?

Thanks in advance

[Michael Belmore]

Hi Yippi, 

Congrats on joining bigger pockets. At quick glance maybe the cash flow won't be so great when you factor in vacancy, repairs, cap ex, and property management. 

if you found the property on loopnet I'm assuming its a multi family. So the owner could be looking to upgrade into a larger complex via a 1031 tax exchange. Obviously the listing agent should be able to get that info for you. 

Maybe with a cap rate of 9 it could be in a rougher area, the owner would just want to cash out at what he believes is the top of the market. 

Good luck ! If you need anything feel free to reach out. 

- Mike