All Forum Posts by: Gandharv Kashinath

A cap rate is a number that allows you to compare the ratio of the Net Operating Income ( NOI ) and the property value or price. It gives you the number in a percentage. Cap Rate = NOI / value. The higher the NOI in comparison, the higher thecap rate.

@Marc C.: Precisely why I posted on this forum so you guys can help me make an informed decision. Thanks for your valuable input. What does the cap rate tell me? How can I get an invite to the Breakfast club?

@Mark B: I was thinking starting out with an SFR. I have started looking at some real estate data in ABQ to pick the right area. Do you have any multi-family units and how is their performance? PM me...

@Sam Newell: ABQ is about 5.8% as on Q1 2013. So having a higher cap. Can you tell me how to understand cap rates?

Thanks again!

@David Faulkner Point well taken and totally makes sense to me. I was contemplating this but just the fact that other cities may have higher growth rates threw me off. Start from level 1! 

This is fantastic! Appreciate all the feedback.

@David Torres I will be there!

@Justin R. I agree with you. From all the reading I have been doing, it looks like there are certain skill sets that you acquire as you do more deals and searching locally gives me the flexibility to go and see a house, inspect a neighborhood, develop some relationships in the area and learn. By looking at markets outside I'm making the learning curve steeper.

Based on what I'm reading online, I'm seeing that the cities I named above have a better potential for growth compared to ABQ. Maybe I should do more research on ABQ itself before I eliminate it? I can cut down on expenses but maybe I'll lose out on the growth and renting opportunities that other cities offer.

Also, I have been trying to move out of ABQ but nothing has materialized so far.

Hi Guys,

It's been a few weeks since I found out about BP and I'm loving all the information that's on here. I want to get started with REI and I have saved up some money for down payment and other expenses. Since this will be my first investment, my goal is to buy and hold and hopefully get a reasonable cash flow going by renting it out.

After doing some general research on good growth markets I have narrowed down my choices to Denver, Austin, Portland, Seattle and San Diego. I currently reside in Albuquerque and with this in mind I'd like to know how I can narrow down my city of choice. Here are a few points that I'm mulling over;

1) I intend to hire the services of a property management firm so this will automatically be factored in to the cash flow.

2) In the circumstance that I need to travel to any of these places, I have found that Austin and Portland would have higher travel expenses only because they are not travel hubs (airports) like Denver, Seattle or San Diego. This will obviously feature in the expenses and will end up impacting the cash flow.

3) Based on proximity, I'm leaning towards Denver with all else equal since it's the closest city to me.

I would appreciate any inputs from you guys. If someone can share how they picked the city for their REI, it would be great.

Thanks a lot!

- GK