User Power
Value/Post Ratio
456%
- Jul 24, 2007
- 4,228
- 19,294
I feel that this is the biggest reason that people struggle in real estate.I wouldn't even consider it until is was a 7-8% Cap.
This property is not a good deal based on the stated information but there is much that has not been said. Cap rates are extremely distorted in almost all situations. Income and expenses are easily manipulated on paper and difficult to disprove without strong market knowledge. I used my own models for income and expenses while ignoring the lies put forth.
Here is the kicker.... I made more money from ZERO or negative cap rate deals than from positive ones. It takes experience to make this happen though. 14 out of 15 of the commercial deals I made in the past 9 years were less than 1 caps at the time of purchase.
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