Yeah, the cap ex is only one of five factors.

Purchase price: $81,000 Cash invested: $30,000 I acquired this property at an 11% cap rate, which provides strong immediate cash flow.

This cushions potential value drops.Syndicator vetting: Only partner with syndicators who have a strong track record in different market conditions.Market and asset class knowledge: Understand market cycles and the specific real estate types (multifamily, industrial, etc.) you're investing in.Avoid chasing trends: Just because a market or asset is “hot” doesn’t mean it’s solid.You’re right that this approach doesn’t cap your upside, quality diversification can still generate huge returns while managing risk.Best regards,Drago

Would you be willing to describe a bit more about how you determined your utility caps? 

Thank you. mortgage probably but not PITI, cap ex, management fee etc let alone any cash flow..:( due to high interest unless you put more down

And where you'll see cap rates go up is in the older assets and smaller markets.

It was a pain, but in the end, I came out ahead as there are rent caps in the area and got good tenants. 

Hi, Jaycee The deal makes sense for me after accounting for all expenses including vacancy, cap ex, and repairs.

when I used a capital gains calculator online, if I put zero money down and put the 2 loans, the cap gains is a lot lower than if I just recorded 1 loan and entered the money from the downpayment loan under cash.

When we create our business plan, we also include our exit plan.We'll only proceed if we can clean this up, acquire new tenants at higher rents so we can increase our NOI, which in turn should reflect our cap rate and profits.Since this asset class is new to us we will tread cautiously.Scheduled to preview tomorrow.