In our current climate new and experienced investors are looking for the best deal out there. Sure why not, but if you are on the other side of the fence as an owner why would you sell a property that is producing income. Well there could be a couple of reasons, if your portfolio has a property that has a high level of risk the note holder may request you sell the property or refinance with another lender. The hitch is that if you advertise it for sell you need to price it accordingly. The higher the risk associated with the property will require a higher the Cap Rate to sell. Let's be honest 6, 7 and 8 cap returns are not going to get an investor second look so don't waste your time trying to sell at those prices. Another reason is that your note is coming due to refinance and the property's value has decreased 20 to 30% over the last 3 years. Either way the owner will have to be realistic about there expectations.
Some areas of the country have been hit harder than others but here in Southeast NC the dips and peaks are not as extreme as those other areas. The predictions for Wilmington and surrounding areas are that of growth next year at a 3.5% level which will exceed the national predictions.
Soap Box Time, if you are looking to buy, sell or lease do your due diligence and have realistic views of your market. It will save you time, money and headaches in the future. If you feel a broker is telling you what you want to hear and not a real opinion of value take a step back and get a second opinion. It will definitely be well worth your time.
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