Expert: Stephen A. Cross, CCIM - 10/24/2010

Question
Greetings, I received an e-mailed me this past week from a contact at a
major real estate brokerage firm, on behalf of some property
a buyer of his was looking for.  The gist of his e-mail was as follows:
CLIENT LOOKING TO BUY 
ZERO CASH FLOW PROPERTIES

COULD BE EITHER SINGLE OR
MULTIPLE TRANSACTIONS.
 
Our buyer is very strict in their criteria. Please submit only properties that
meet these requirements
 
• No size limit
• Fully amortizing debt
• Any property type (retail, office, industrial)
• Lease Term LESS than 18 years
• National locations
• Zero cash flow  

It seems odd that a buyer would want to purchase property with zero, or
no cash flow.  As opposed to purchasing an income producing property.
Question, why would a commercial buyer be interested in zero cash flow
properties?  Also, feel free to comment on anything else about this criteria
you feel that's worth mentioning.  Thanks in advance.

Steve

Answer
The agent/broker is likely looking for properties whose owners may be motivated to sell at liquidation prices. Another possibility is that he/she is compiling a database of potentially distressed properties.

If you are considering selling I suggest interviewing several local, EXPERIENCED (emphasis added) agents/brokers to opine on the current market value of your property, after which you can make informed decisions.

As an aside, real estate brokerage firms are made up of agents/brokers who are generally acting as independent contractors. These agents are, in effect, self employed salespeople.