How to make money with cap rate lower than current interest rate.

[Glenn Driban]

I live in a market with typical cap rates < 3%. Given current 6% plus interest rates and need to secure financing on any property I would purchase, how is it possible to make money? In the case I've described, the NOI will always be less than the annual mortgage payments typically even with 20% down. I'm just getting started and would prefer to purchase small multi-family in my local market, but have no idea how to make it pencil. Any input would be greatly appreciated. Thank you.

[Jim Pellerin]

@Glenn Driban

You have 3 options.

1. Shop around for better rates

2. Put down a large amount. Shoot for 30% or more.

3. Hold out for better properties with higher cap rates. Maybe look in a different market.