http://www.REIClub.com – Cap Rate Is How Investors Price Commercial Real Estate. Here’s What You Need to Know About Cap Rates For Your Real Estate Investment…
25 Responses to “Commercial Real Estate – Defining Capitalization (Cap) Rates”
So what does the CapRate mean on a tenant who is asking for a build to
suit? LL wants a 10% cap rate. The cost to buy and build is $1,000,000. So
should the tenant pay $100,000 per year?
Real estate is a “borrowed money” business. You cannot determine the
correct CAP rate from the sale of similar properties. The CAP rate is
determined from the cost and structure of financing. Check my excerpt video
at /watch?v=QB4ZM40VN7w for more information on correctly calculating the
CAP rate for a subject property according to the cost and structure of
financing that is available to you. Also check my other videos on income
and expense analysis. /watch?v=QB4ZM40VN7w
I love your videos but they only serve as a general overview of what an
investor needs 2 do… Which is GREAT!!!! It’s like from there it’s in our
hands to further our investigations to determine if a property is worth my
investment. But it would make an even more informative vid if you gave us
some real life examples… I kno each investment is different but an
example, I feel, would give alot of investors a better foundation or foot
work for this market
Good video. I am in real estate investing and this was a great, right to
the point description on CAP Rates. What about less than 5 units as asked
below? Any helpful advice on less than 5?
I sell commercial real estate investments via Sperry Van Ness Commercial
Real Estate Advisors (svncre.com) and found you explanation of CAP rate to
be very good. Interesting to note that commercial real estate investment
firms today will consider several valuation methods: CAP rate, price per
square foot, cash on cash return, internal rate of return (IRR) or some
other method such as re-positioning the property. Again, good video.
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Great info Frank, thanks!
Great video. Very informative
Excellent!
Are you an investor?
Well said!
So what does the CapRate mean on a tenant who is asking for a build to
suit? LL wants a 10% cap rate. The cost to buy and build is $1,000,000. So
should the tenant pay $100,000 per year?
Thanks! I’ve subscribed.
Real estate is a “borrowed money” business. You cannot determine the
correct CAP rate from the sale of similar properties. The CAP rate is
determined from the cost and structure of financing. Check my excerpt video
at /watch?v=QB4ZM40VN7w for more information on correctly calculating the
CAP rate for a subject property according to the cost and structure of
financing that is available to you. Also check my other videos on income
and expense analysis. /watch?v=QB4ZM40VN7w
good info
This video and information presented here is coming at the right time for
me.
Do you have any videos on how to find a good property management company
and how to deal with them?
Knowing what a commercial property is worth and how long it will take to
get invested money back is very important.
I just wanted to say WOW. You have a lot of really great info like this on
your website.
I love your videos but they only serve as a general overview of what an
investor needs 2 do… Which is GREAT!!!! It’s like from there it’s in our
hands to further our investigations to determine if a property is worth my
investment. But it would make an even more informative vid if you gave us
some real life examples… I kno each investment is different but an
example, I feel, would give alot of investors a better foundation or foot
work for this market
great info, and a nice, simple explanation.
How do you rate residential properties below 5 owned?
The best real estate investing info I have found on Youtube!
Clear and to the point. Thanks.
Great content!
Outstanding! Very explanatory.Thanks.
The CAP rate and gross Return on Equity depend entirely on the cost and
structure of financing. /watch?v=N_vRDWYT2gE
Good video. I am in real estate investing and this was a great, right to
the point description on CAP Rates. What about less than 5 units as asked
below? Any helpful advice on less than 5?
This is better than some programs you have to pay BIG dollars for!
I sell commercial real estate investments via Sperry Van Ness Commercial
Real Estate Advisors (svncre.com) and found you explanation of CAP rate to
be very good. Interesting to note that commercial real estate investment
firms today will consider several valuation methods: CAP rate, price per
square foot, cash on cash return, internal rate of return (IRR) or some
other method such as re-positioning the property. Again, good video.