CAP Rate Question?

[Kevin Johnson]

Hello All,

I am a new member that has minimal experience with single family homes.  I've got 2 rental properties that I've owned for many years.  I intend to move towards multifamily units and increase my portfolio.  At present I am "practicing" evaluating properties to buy.  

I had found this (see link below) near a condo I own. From what I understand CAP Rate = NOI/Cost Basis.

The price is $1,700,000.00 for a 28 unit property and they are advertising a CAP Rate of 7.46%.

http://www.loopnet.com/xNet/MainSite/Listing/Profi...

That is 1,700,000.00  x  0.0746  =  $126,820.00  (Gross)

$126,820.00  /  28 Units  =  $4,529.00  (Gross)

Am I calculating that correctly? They have 24 x 1 Bedroom Apts @ 700 sq/ft and 4 x 2 Bedroom Apts @ 1,100 sq/ft. There is no way they are getting and average of $4,529.00 per unit for these apartments. Am I missing something...or is the CAP Rate being advertised grossly overstated?

Thx for your input!

Best Regards,

Kevin