I follow this market very closely...got 1 house and now in contract for another...median house prices near the university is about 150K.So I am quite puzzled what is the rational behind buying these portfolios for 3 times the value of the houses themselves...there is obviously an advantage to buying an established portfolio with built in economies of scale...and I assume a company who is capable of getting this kind of portfolio know what they do...but 3 times more?

Hello! I have been hunting for the last 6 months for my first duplex to house hack. I have more than enough for an FHA but want to save 20% for a downpayment ideally. Looking at how overpriced the Tacoma duplex market...

The PM would rationally favor the buyer, assuming they are continuing as a client.  

They make the all to common mistake of looking at a large return, making the bet, then rationalizing the decision. 

A third of the building has what I would call a unified office of about 3,500 sq. feet with several rooms and a rational layout; this was leased out at $900 per month when I took possession of the building and they stayed for a couple of years.

If you want good advice you have to give good information to build a rational for the advice.

I’m looking for confirmation that I’m not crazy and this is a rational deal (sure it’s not amazing, but decent).So, am I crazy?

@Joe Splitrock - financial definition of CAP rate and NOI is sort of well understood. it's just brokers have been dressing these numbers for so long, that not including management fees or vacancy has become an urban legend - i rationalize it this way - if we were talking about 500 unit complex rather than 6 unit, management fee will be a line item on the expense report and if it's not, ppl would just laugh. similarly, if owner is out of state, management will be a line item in the expenses - no way someone can self-manage a property out of state.

Many people successfully invest in properties that fall under the 1% rent to price ration by buying value add deals and forcing equity.

Some money has to come from somewhere.I can show many ways to "rationalize" No Money Down into meaning, the cost of the money being used is free...but there has to be some form of money used...from somewhere, and/or somebody...just not me.