Creative Real Estate Podcast

AAA320 Listener Question: What is Cap Rate?

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In this podcast episode, you will learn:

  • Cap rate means how you capitalize after all of the expenses (rate at which you get your money back)
  • Ratio is purchase price and divide it by NOI
  • Cap rate is important because commercial multifamily properties are valued by cap rates instead of their comps.
  • It is a function of (buyers perception of) risk. Buyers are willing to pay more if they see area is safe and building is new.
    • Age of propertiy,
    ...more
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    Creative Real Estate PodcastBy Jason Lewis
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