Usually only commercial properties with established operational expenses histories are evaluated by cap rates and then those cap rates can also be applied to buildings in certain areas representing higher or lower risk areas.

And I am wondering if it can apply to this case.

@Roger Garner the strategy will really depend on what level of involvement you want in the project.

Also, knowing the tech terms for a project benefits u bc guys will know you know SOMETHING about what is involved. 

Hi Fellow investors, I have been using BP to gain insights in real estate investing and have been applying them in my townhome rental units.

Additionally, E&O will become problematic when you sell your own real estate and view it as a conflict, especially when you are involved with the development team.

Hi Jessica, I put the house on the market instead as the MTR strategy involved significant upfront capital that I wasn't ready to for.

Just know the layers involved and be sure you are still able to complete due diligence on the sponsor. 

Of course, many investors bend/break this rule, but that's another risk.2) If your bid wins the foreclosure auction, you then have to deal with getting rid of any occupants - who may steal/damage everything they can in retaliation:(3) You MUST have a great crew on the ground that can minimize surprises - not easy to do on your first deal.Regardless if you buy a foreclosure or other property, read our copy & paste advice below:-----------------------------------------------------------------------------------------------Recommend you first figure out the property Class you want to invest in, THEN figure out the corresponding location to invest in.Property Class will typically dictate the Class of tenant you get, which greatly IMPACTS rental income stability and property maintenance/damage by tenants.If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.If you buy/renovate a property in Class D area to Class A standards, what quality of tenant will you get?

Quote from @Andrew Syrios: Welcome to KC Leo, I would definitely recommend getting involved in MAREI, the real estate investor association here.