Lower CAP rate more desireable?

Posted on: Sat, 01/21/2012 - 16:33

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Lower CAP rate more desireable?

I am new to this, a work in progress, still learning the language. I had a guy ask me to find him a couple of MDU's- apartment buildings - in a certain area. I did some research, found a couple that met his criteria, and presented them to him. The properties were physically very similar and in close proximity to each other. One of them had a CAP rate of 10.5%, while the other was at 6%. He said the lower CAP rate was more desirable. The conversation went in another direction at that point, thankfully. My question is, why would a lower CAP rate be more desirable to an investor?

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by midamerica
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Posted on: Sat, 01/21/2012 - 16:42 #1

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lower CAP

lower risk

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Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools

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Posted on: Sat, 01/21/2012 - 18:16 #2

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lower CAP rate

Thanks for the information, Mike. I REALLY need to concentrate on "speaking real estate investing"!!

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