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Elizabeth, Home Buyer in Miami Beach, FL

how can I find out what are appropriate cap rates for multi units in Miami South Beach?

Asked by Elizabeth, Miami Beach, FL Sun Aug 24, 2008

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What is "appropriate"? In general a cap rate is the return on investment- the higher the initial investment, the higher the cap rate, depending on income, expenses, debt service, etc. The initial purchase price has a great deal to do with the end cap rate too. There is no appropriate cap rate~ Investors generally would like to see about a 5% return on multi-family properties, that is not always possible- depending on the PURCHASE PRICE.
0 votes Thank Flag Link Mon Aug 25, 2008
Cap rates are returns on your investment in a percentage value. Every property and location have different cap rates and each investor has different needs. You should not generalize about what is "an appropriate cap rate" and should study each property individually. Remember that a current owner's cap rate may not be the same than when a new owner purchases.
You should work with someone that can advise you appropriately and knows the market's ins and outs as well as can scrutinize financial statements.
Web Reference: http://www.miamism.com
0 votes Thank Flag Link Sun Aug 24, 2008
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