How to use Cap Rates to underwrite Deals?

[Chris Risi]

Hi all, for some reason cap rates confuse me. I was recently told, the lower the cap rate, the higher the property value. For some reason, I always thought the higher the cap rate, the more valuable a property should be. I know the formula is NOI/Market Value= Cap, but really not sure what investors are looking for in terms of cap rate?

Can someone help me understand, maybe with some exacmple numbers? I have a couple properties I would like to invite investors to buy into, and want to present them with cap rates/etc.