Multi-family Apartments with 10%+ CAP still exists?

[Thang Nguyen]

I have been investing in SFH rentals in the Seattle area and want to move to multi-family apartments ($2-3M value). I am using MLS and Craiglists but not have luck finding anything close to a 10% CAP rate. Does a 10% CAP still exists or am I using the wrong tools to find properties. Thanks for the advice.

[Brian Burke]

Sure, ten caps are everywhere. Just visit a war zone in a dead market near you. 

Ten caps are ten caps for a reason...but I sure can’t think of a reason to buy one. Don’t lose sight of the fact that high cap rates do not mean high return.  They just mean that the property and/or area is undesirable, thus the greater market places less value on the income stream than in better markets. 

If your buying criteria is a high cap rate, you are using cap rate improperly.