Although there are many variations, a cap rate is often calculated as the ratio between the net operating income produced by an asset and the original capital cost (the price paid to buy the asset) or alternatively its current market value.When we are talking about CAP rate in this scenario, obviously we are talking about initial acquisition cost.If I have two properties, identical in every way.

Hopefully the projects have budgeted to produce some sort of distributions from the start but I do understand sometimes it takes time before they have can, although if their projections were done right then it should be in line. 

However, prior to the last couple/few years, commercial residential syndicators had many years producing outstanding returns.  

Depends on so many factors: - What it yields- What you're trying to achieve- What headache factors you're willing or not willing to have - What tax implications come from selling (and if you have to replace your debt in a 1031 exchange)With 1.7-1.9mil that would be a 6-10 unit out here in Reno, NV that with cash could produce probably a 6-7 cap with upsides in rents. 

Long term, option 2 produces significantly more wealth over time.

If the deals were so good then why would they need to sell why not raise money in a fund… @Chris I think there was no real intention to conduct business in an ethical manner, Jason Walsh rather laid the foundation to use RE to produce a pretty large Ponzi scheme and I think we all know how those end. 

Maybe that is one of your interview questions.If you are very top producer there can be some advantages, like employing your kids, SEPs or retirement plans and maybe if you have a big team some shield of liability if you set it up right and practice what your attorney teaches you to do to keep everything separate.

@Jaron Walling What's the best way of knowning/calculating whether the renovations made will produce a positive cash flow after moving out?

Our livelihood depends on the volume of deals that we produce so existing deals where most of our capital is tied up are priority.

There's several cities not discussed on here that I am investing in and I see other large individuals invest in that do not fit the cash flow $500/mo in the philosophy, but I'd take over almost any area that's producing legit cash flow.