All Forum Posts by: Karl Markarian

Just because it's a 4.5 CAP today doesn't mean you won't reach higher CAPs in year two and beyond. The real focus should be on the asset's future value and potential — not just the immediate return

Totally agree with you William.  Cap rates are helpful, but they can definitely lead you down the wrong path if you don't dig into how they're calculated. I’ve seen that replacement reserve issue pop up more than once, and it can really throw off your valuation if you’re not careful.

You're spot on about supply and demand too, especially for long-term rentals, it’s not just about the numbers today, but also what the market is likely to do in the next few years. Appreciate you jumping in with this perspective.

When evaluating a commercial multifamily property, many investors laser-focus on the CAP rate — but is it really the #1 factor?

The truth is, CAP rate is just one piece of the puzzle. Here’s what you should weigh alongside it:

Location – Markets with strong job growth, population increases, and renter demand often outperform.

Rent Growth Potential – Can you raise rents through market trends or value-add improvements?

Property Condition – Deferred maintenance can kill returns fast. Inspect thoroughly.

Value-Add Opportunity – Underperforming assets with room for upgrades can significantly boost NOI and future value.

Tenant Stability – Solid, paying tenants are worth more than a high CAP rate with shaky occupancy.

Financing Terms – Great debt can sometimes outperform a "better" CAP rate on paper.

Remember: A good deal isn’t just about today’s CAP — it’s about tomorrow’s potential.

I am happy to source any types of deals across the country. I'd love to hear what does your criteria deck look like. 

Thank you Meghan 

Happy to help. Originally from Toronto and now here in Los Angeles 

Welcome to BP . Newbie to Bigger Pockets myself. Loving it so far

With over 30 years of experience in Commercial Real Estate, I specialize in the sales and dispositions of investment properties across Los Angeles and the U.S.  My expertise spans across retail, mixed-use, multifamily, and development opportunities. Let’s connect to discuss opportunities