Posted by Mike P on December 30, 2004 at 18:08:18:
I like to see around 10% or better. Be mindful of buying large number multi’s with the current low mort rates. Despite many “discussions” I have had recently, cap rates are intimately related to total property value. Be careful, run your numbers.
cap rate - Posted by Chris
Posted by Chris on December 25, 2004 at 22:50:09:
I am just learning commercial after a couple of years of SFR’s. What cap rate do you look for in apartment complexes for you multi family people?
Re: cap rate - Posted by ray@lcorn
Posted by ray@lcorn on December 27, 2004 at 12:47:41:
Chris,
For a different view on cap rates, see this article:
http://www.creonline.com/articles/art-216.html
ray
Re: cap rate - Posted by Brian (No CA)
Posted by Brian (No CA) on December 27, 2004 at 10:33:44:
Cap rates for apartments have come way down in the past few years. As an appraiser, we typically cap multi-units at 6.0-7.0%, at least here in CA. Nationally, cap rates for the third quarter 2004 average 7.2% according to a well-known real estate research group.
Re: cap rate - Posted by Don Dion
Posted by Don Dion on December 26, 2004 at 22:57:04:
This is a very good question. To get the real answer you need to do a market survey in local market of the buildings your looking at. Normaly I would say a one mile radius but that might not apply in a smaller town then chicago.
As for underwritting once the package is submitted I use 8.5% and have not had it questioned by any of the lenders I use for my clients.