Trulia Voices—North Hollywood

Top Voices      Member Search BETA      Create a profile

Ask a question

Browse

Search

e.g.: "San Francisco, CA"
e.g.: "Parks" or "Schools"

Email me when:

RSS
 
Share this: 
  • del.icio.us
  • Digg
  • Reddit
  • StumbleUpon
  • NewsVine
 

How important is the cap rate for income property of four units or under?

Describe the relevance of cap rate and GRM in income property value
Sat May 12 2007, 21:51 - North Hollywood - Home Buying - 2 answers
 
Useful
(0)
 
 
Not useful
(1)
 
  report get email alerts email a friend
 
Keith Sorem
Real Estate Pro
in Burbank
Keith Sorem, Real Estate Pro in Burbank in Burbank
Answers (2)
Show me:  Recent Answers     Oldest Answers     Highest Rated  
 
simplenickel was FIRST TO ANSWER California M… received BEST ANSWER
BEST ANSWER
This is a great question. I'll answer from a financing perspective. The cap rate is NOT as important when trying to secure good financing for a 4 and under because they are residential loans. It is all important for a 5+ because that is a commercial loan and rate is determined by DSCR. From a valuation perspective, I think it is equally important in any case but I'd defer to a real estate expert. I'd be interested in your opinion, Keith. I hope this link to an article I wrote helps:

Sat May 12 2007, 23:32
Web Reference: http://delmar.typepad.com/brianbrady/2006/12/hard_money...
 
Useful
(2)
 
 
Not useful
(0)
 
 
report
 
FIRST ANSWER
Is it commercial or residential?

I would say that for commercial its extremely important, less so for residential. There is more wiggle room in residential. My guess is because commercial renters are primarily interested in square footage. Hope this helps.

Sat May 12 2007, 23:29
Web Reference: http://www.flippingpad.com
 
Useful
(0)
 
 
Not useful
(0)
 
 
report
 
[+] Save this question Send this question to a friend
Permalink: http://www.trulia.com/voices/Home_Buying/How_important_is_the_cap_rate_for_income_property_-3825--recent