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Updated almost 7 years ago,
Cap Rate when buying
To all the real estate experts out there i need a simple answer that is driving me crazy. Doing research says it is optimal to buy at high cap and sell at low cap. I cant see it, but know it is true.
400k purchase price and 60k NOI Cap rate 6.6
400k purchase price and 50k NOI
Cap rate 8.0
Why do i want to buy a property with 8.0 Cap rate with 50k N0I vs 60K NOI at cap of 6.6
Thanks, I know this question has probably been asked and answered thousands of times.