All Forum Posts by: Bryan Mitchell

@Ryan Canfield- Good question, but why smaller banks? Are larger banks out of the question and if so, why? Thank you in advance.

Mr. Villanueva,

Thank you for sharing. Yes, as investors seeking to increase net worth along and with earn a positive cash flow, the cash on cash return with equity is better since it factors in appreciation. For buy and hold strategists, appreciation of the property is key. Another way of looking as the article states, is to view rental income as dividends while the value of the stock is when you sell it. If you after all expenses you sell for 7% more, then you may have at least meet the the average return for the stock market. Take out inflation and you have a honest 4% (or so) return. 

David,

As the article above states, one should use caution when using CAP rate as an analytical too for evaluation a real estate deal it does not factor in the costs of financing (mortgage payment). "If financing is planned, then Cap Rate cannot be used as an estimate of value."