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Updated about 7 years ago on . Most recent reply

Arturo Borges's profile image
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Arturo Borges
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Arturo Borges
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Arturo Borges
  • Specialist
  • Miami, FL
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Multi-Family and Apartment Investing

what is a good cap rate?

Arturo Borges
  • Specialist
  • Miami, FL
Posted

Hey!

What is a really good, decent, and bad cap rate for multifamily deals, and does this number play an important role in the analysis of a deal?

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Mike Krieg
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Mike Krieg
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  • from Austin, TX
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Mike Krieg
  • Investor / Syndicator
  • Austin, TX
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Mike Krieg
  • Investor / Syndicator
  • Austin, TX
Replied

Lower caps aren’t a bad thing unless the market has no projected growth. Comparing cap rates in different markets or sub markets is a fools errand. I’d buy a 5 cap value add deal any day of the week in a growing market with the prospect of jobs over a 12 cap in a depressed area.

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