This is separate from a cap ex account.

@Antonio Scerra I think there are so many variables of what makes an investment good, but overall, I own a lot of property and I would say with a CAP of 27 he's doing very well.  

If this a cap rate in your area - fuggedaboutit - look elsewhere.Nick

Again I'm very new to the scene and was kind of putting a cap on what I could theortically offer on the property while still turning a profit based on a worst case scenario hard money loan.

The HML I spoke with would finance 100% of rehab and purchase price, so long as the LTV didn't exceed 70% for a flip (75% for a BRRRR).All the lenders I spoke with quoted 75% LTV as a cap for a cash-out refi, but I could keep looking.

Most people buying homes are not biggerpockets.com members, do not know what a cap rate is, have never heard the term "you make money when you buy," etc, so they offer at prices that might not make sense for you if you're trying to check all the "rule" boxes (50% rule, 1% rule, etc) that treat San Diego like it's rural Nebraska.

It’s hard for finance record keeping, doesn’t let you block partial payments and most importantly there’s a cap to how much you can withdraw to your bank account.

So is replacement cost insurance have a cap which is the insured amount?

You can look at a cap rate as an indicator of your margin of safety.  

Would you create your own pro-forma APOD using his claimed average rents and your knowledge of market-average expense rates, then apply a cap rate?