We are looking in relatively good areas such as Cleveland Heights, Shaker Heights and the like.What we discovered is that unless you go to poorer areas you are not seeing as good of a cap rate on the units.

Whether a cap rate is good or bad is very market (and neighborhood) dependent.

Trouble is, few of them have a cap rate worth investing in, let alone a cash on cash return worth investing in considering leverage, and even then, the cash flow is very small compared to the total return on my SFH's.

He says that you could rent each unit out for $1000/mo, but I'll analyze 20% less and say $800/mo (Im awaiting information on that market right now).So If we are all in at $340K with aAnnual Gross Operating Income of $57,600 ($800 in Rent x 6 units = $4800 x 12 mo)minusAnnual Operating Expenses of $28,800 ( We'll say 50% of the GOI)EqualsNet Operating Income of $28,800...Divided by the GOI ($28,800/$340,000) you get a Cap Rate of 8.4% Now to my knowledge; I should be shotting for a 10 Cap.

A million bucks for a dump apartment with a cap rate of 4 maybe.

=NOI---net operating incomeyou can divide NOI  by purchase price to get a cap rate though most people rarely use this on SFRonce you have this info you can deduct your financing (if you have any) to get BTCF--before tax cash flow...also don't forget...one item not mentioned is CapEx---which is major repairs...and cannot be deducted in the first year as an expense but rather depreciated...this is a quick general guide...and if you ever become an agent you may be taught this.

@Alberto Stein Rios I'm not fully sure if there is a capability on that platform for that, but  I maybe wrong because I haven't used it years.

@Bob Bowling I would say "silly cap rate" was a cap rate that was less that 2 or 3 basis points above the cost of money for that investor.

Most have a CAP rate of 4-7% and the asking prices are well over FMV.

Put a cap rate of just 8 on that and you just increased your value by $375,000.