This is really what a "Cap Rate" is, is the risk associated for a given level of cash flow (generally higher risk deals have a higher cap rate)...

Yes, a cap rate measures what the market will pay for your NOI. 

I agree with Ned, RE investors and even appraisers use a CAP Rate as the quick and dirty way, by definition, it's very difficult for a RE investor to get a true CAP Rate as it is based on alternative investments to compare to, or opportunity costs, which are hard to nail down for RE investors.....unless you have other deals on the table to compare to.

I'm able to calculate a property value if I input a CAP rate on this NOI.

Last spring I sold my 6-plex producing NOI of $64800 and a cap of 8.64%MFU inventory was zero at the time and the listing produced a bidding war - - small wonder with that cashflow & cap

@Mike Dymski I definitely agree, but not sure of legality in charging higher rent to couples as opposed to singles......I use the Maryland Association of Realtors lease, it's not stated anywhere specifying a cap for guests and I don't remember it being stated in their lease.

You can then use a Gross Rent Multiplier (GRM) to determine the ARV or back into a number using a CAP Rate.  

If you know your expenses and the internet will give you a cap rate range, grab your calculator and do some work !

I had some cash and invested in a shopping center with a cap rate 7.50 plus minus.

If it can't be corrected, the prohibited transaction results in penalties, taxes and fines that could wipe out your entire retirement savings.Believe me, you want a capable custodian handling your accounts and reviewing your transactions for peace of mind.Just my opinion.