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Back to videos | Rick Melero, Commercial Investor, Real Estate Mentor, Member of HIS Board of Advisor's VideosRule of Thumb 3rd Filter CAP Rate
http://www.hisrealestatenetwork.com/351
Rick Melero explains commercial real estate investing term, "CAP RATE". In simplest form, the cap rate reflects the return the investor would receive over one year if the investment were purchased for all cash. By applying this return to the income, a value determination can be made. This is most popular method of valuation used in the commercial real estate industry to determine an asking price for income producing property. The brokerage community relies heavily on the assumption that market cap rate. The market cap rate is defined as the median indicated cap rate of recent sales for comparable properties in a market area.
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http://www.hisrealestatenetwork.com/351
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