Cap Rate, Important or NOT?

[Fletcher Clardy]

As a value-add investor, cap rate is not a main focus of ours when evaluating an exit.

We do not control the market and neighborhood cap rates when investing in multi-family. We can still manipulate the NOI based on our underwriting, but no control over the cap rate.

How important is cap rate to you? Do you use it? Does it matter?

If cap rates are important I would love to know how the rate factors in your underwriting and how it assist in your overall evaluation.