Its great to see that not everyone is a math bonehead. Great responses. Rapchick , have you spent any time on loopnet looking at other area’s and other property’s? I have been spending alot of time recently in the midwest and it is very easy to get 10% to 15% capitalization rates in places like Kansas city , St. Louis , Clevland and Detroit. These are not ugly buildings that is just the economics in these area’s. I know a 10% cap in Cali and the building will be falling down and you will be dodging bullets but you can still make money back in America. I will never touch anything under a 10 cap. Good luck and party on.
I like the comments about not figureing in the down payement when trying to make your property deal cash flow. I live and all of my property is in California and I know for a fact many poeple here (idiots?) have to put down 40%-50% to make them cash flow. The last building I sold I did not understand how this guy was going to make any money. I have a strong sense that many poeple are storeing money in real estate not actually makeing money at it. Robert Kiosaki has said this also. or looking for passive losses like in this case.