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Chip Parrish, Real Estate Pro in Denver, CO

Denver Residential cap rate average

Asked by Chip Parrish, Denver, CO Fri May 7, 2010

what is a good resource to find average duplex & triplex cap rates for central denver colorado

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Chip,

I agree with what is below and will supplicate it with the fact that cap rates fluctuate within a building, even one as small as a du or triplex, even more so within a neighborhood let alone a city as a whole. Most duplexes and triplexes I have come across are between 4-12 percent. With higher rates being place with deflated sales prices. I would look at GRM (Gross Rent Multiplier) as a better way to hone in on your numbers, as these are easier to figure out, and not dependent on the word of the prior landlord. I would love to help you find a high producing rental property, let me know how I can help!

Regards,
Carl Larson
The Bartic Group
(303) 880-8778 - Cell
Larson.carl@gmail.com
TheBarticGroup.com
0 votes Thank Flag Link Sat Aug 2, 2014
Chip,
Excellent question. And a very difficult source of information indeed. As you probably know, the ellusive piece of data of the equation/calculation you are missing on such properties is the NOI. There is no central data source for this information.

The MLS does have a data field for NOI to be entered. So you can try searching Income Properties in the MLS and might be able to procure some market data there to calculate a Cap Rate. I have semi-successfully running such analysis in the past.

Curious, why do you want Cap Rates for such properties? In my opinion that would not be the best measurement/metric for properties like that. My business is investor based and I buy/sell a lot of <4 unit properties in Central Denver. The Cap Rate rarely makes any sense when comparing them. Plus, with a Cap Rate you are governed by the income & expense numbers some Joe Blow property owner is reporting or relying on the compentency of the listing broker advising them on Income Properties.
Web Reference: http://www.jonrroberts.com
0 votes Thank Flag Link Sun Nov 7, 2010
Hi, Jon
I have a buyer that is looking for the average CAP rate for Duplexes in Denver. They are relocating from San Diego and want to buy a duplex,tri or fourplex and live in one of theunits. I agree that CAP rate is not the best metrix. In your opinion, what do you feel is the best approach? Thank you, Lorraine at ReMax Cherry Creek (lorraine@guyteamhomes.com)
Flag Sat Dec 1, 2012
I would start with commercial appraisers and/or appraisers that are experienced appraising investment properties. They should be a great source of knowledge in this area.

@Brian Burke - Definition: Capitalization rate (or "cap rate") is the ratio between the net operating income produced by an asset and its capital cost (the original price paid to buy the asset) or alternatively its current market value. The rate is calculated in a simple fashion as follows:

Capitalization Rate = annual net operating income/cost (or value)

You could also try. http://www.caprates.net/ I am not familiar with the site but from the looks of it, it should assist in your search.

If you need any help getting in touch with a couple appraisers that specialize in this area, I would be happy to try to connect you. Please let me know if I can assistance you further.

Thanks,

Merritt Noel
0 votes Thank Flag Link Mon Sep 13, 2010
Are you looking for average rents? We call these "attached homes" these days and it depends on the area and the condition and the size of home. Please be more specific.
Brian
0 votes Thank Flag Link Sat May 8, 2010
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