BRRRR - Cap rate decreases

[Kevin Wasie]

Hi. 

I am considering a BRRRR deal. When analyzing many of them, one of the things that happens, after refinance, is the cap rate always decreases to a number that seems to low for our market.

I am just trying to wrap my head around this concept. 

Is the reason that this is okay is because you will have a minimal (or no) money invested into the deal? So, in actuality, your CoCROI is really great?

I am new to investing. Thanks in advance.