I'd expect fewer points with a higher rate and vice versa.

We learn from past results what we can expect.

Did you get what you were expecting?

The vast majority of contractors are as honest as the day is long, but by clearly defining expectations you can stop problems before they come up.

If not, they will be a waste of time.If you don't have a formal coaching program, with contracts and specific expectations, then just have them learn on the job, by asking you questions and putting your teachings in to action.

Could you share with us How long you plan to hold on to the property Expected capital and rental growth rate Vacancy rate Utilities cost Typical cap rates in the area

Yeah… just offer 70% of asking but don’t expect to be accepted at that price right away.

In my area rents are 1250 for 3bd/2bth, which was acceptable when homes were 350K, but with homes now at 100k those rents will be 1.25 % of market value and with homes expected to drop (and in some cases already have) to 80K current rents would be 1.5 %.

Chris thanks for the info, chris i also found out that my thoughts were correct.there is no set value, the value of the property is based on what makes sense for you to achieve your investment goals (that's it).some will say to not rely on the cap rate for your purchase decision (which i agree), but to use it to compare to other similar properties that have sold in the area, which is actually not reliable because 1. there will be less comparables, 2. how properties were purchased vary from deal to deal, 3. the inner workings of most transactions are confidential.so the best way to analyze a deal (while using cap rates) is to add your financing terms into the picture (principal + interest and etc) and calculate what the deal is really worth to you.see the normal NOI/Asking price = cap rate is based on if someone were to pay all cash, this is the return they could expect first year, but paying all cash for a property doesn't happen all that often (bank funding will be use for a large portion of that cost).so i found the best way to use this formula and analyze my deals is by look at all factors but also including my financing terms with my desired return objectives into the picture to get a proper view and value to me.

However you should expect to put in cash of your own and you will need to have funds in reserve.