The number one biggest mistake a new investor makes when looking at small income property is trying to base the acquisition price on what other investors or owners have paid for a similar property in the neighborhood. Remember just because the bank thinks that's the way it should be valued does not mean that is the most profitable way or the safest way!
This property is located in the city of Palm Desert and has currently been on the market for more than 800 days already, think it's time for a different strategy?
The marketing agent does not even include any current rent rolls, just some scheduled income, yet does not give any kind of break down of what the units are and how much each one is taking in per month. That is just horrible when it comes to income property how can a sound investor make a good decision without even knowing the amount of income?
Current list price is at $349,000 which considering that would be about $100,000 in profit for the seller sounds good for them but definitely not for the new owner because even giving the benefit of the doubt and stating this property is getting $600 per unit the Tim Taggett Value would only be at $153,000 and safe value would of course be the same in this guesstimate since the safe value is always based off of the lowest rent able to be made for all units. Just plain and simple this is being horribly marketed and without it being a short sale or the need for a 1031 exchange I can not see the value of this property being anywhere close to the list price and obviously neither can anyone else considering it has been on the market for more than 2 years already.
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Any questions or would like to discuss investment property give me a call directly 760-500-7292 or email at RetireEarly@gmail.com.
Enjoy and Happy Investing!
Tim Taggett
DRE# 01468188
REI Powerhouse
Darryl Self, Broker
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