Spokane, Wa cap rates?

[Reinhard Kurzen]

What are the typical cap rates right now in Spokane, WA? I am looking at a 25 unit and it needs alot of rehab and tenant turnover work. The upside is that there is lots of room for improvement. Its selling for about a 4% cap rate on actuals but it has the potential to improve to a 7-8% cap rate (rehab included) which would allow me to refinance and pull out my initial downpayment. I have seen deals on the market right now claiming to be a 5.7% and 6.4% cap rate. Based on this info would this be a good deal?

[Melissa Murphy]

Cap rates alone can be deceiving since an owner could have deferred many necessary repairs, and their effective cap rate would be higher than an owner who is consistently improving and upgrading a property. Anything over a 7 cap is gone in seconds, 6 caps are rare, and 5 is more common, but again always verify verify verify the underlying numbers provided. A 4 cap that has recently had a lot of capital improvements would make sense in the right location, perhaps not one that then required a lot of CapEx.