BiggerPockets

to those of you who buy and hold, do you base your purchases on the market cap rate or just your personal standards.

I mean, if you are getting a property that beats the market but is only giving you a 8.5 cap does this fall in line with your criteria or do you hold strong at 10 cap even if the market is giving 8?

this is assuming the property still fits your cash flow standards and your cash ROI.

I agree with Jon, as I use my own criteria because I want to be sure the deal will be profitable on my terms. The things mentioned by the OP are somewhat useful for filtering properties, but ultimately an investment must make money.

Forget the CAP RATE! There is no such thing as a true market cap rate for reasons that I've explained a thousand times (I suggest that you do a search on cap rate). Cap Rate sounds good at cocktail parties but is a big joke in the real world!

I use the 50% Rule for expenses (see the sticky thread; the 2% Rule for screening properties; and $100 per unit per month as a minimum cash flow (using the 50% Rule for expenses).

Mike