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Updated over 9 years ago on . Most recent reply

Kevin Dawravoo's profile image
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Kevin Dawravoo
  • from Hinsdale, Illinois
  • Member since Sep 5, 2015
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Kevin Dawravoo's profile image
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Kevin Dawravoo
  • from Hinsdale, Illinois
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Kevin Dawravoo
  • Hinsdale, IL
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Real Estate Deal Analysis & Advice

Cap rate vs. ROI

Kevin Dawravoo
  • Hinsdale, IL
Posted
I am just getting into REI so this may be a very basic question for most of you but I've been struggling to figure out what is more important cap rate or ROI. And is the ROI denominator (investment basis) only the amount of money you have put into the property and not the property value? I know the equations: ROI = Cash flow/ Investment basis CAP Rate = NOI/Property Price
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Account Closed
  • Investor
  • from Honolulu, Hawaii
  • Member since Nov 18, 2013
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Account Closed
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  • from Honolulu, Hawaii
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Account Closed
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  • Honolulu, HI
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Account Closed
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  • Honolulu, HI
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Are you buying commercial properties?  If not cap rates are not appropriate.

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