CAP RATE QUESTION
Hi,
I´m currently starting to invest on real estate. My first transaction was a sale and leaseback operation. It went out well and we are currently seeking similar transactions. We are investing between 20-30% and the rest is financed by our bank. By doing this both ROI and CAP RATE indicators look good.
However, I have takes to some people that evaluate the CAP RATE by: dividing the INCOME/SALE PRICE. They leave out behind the Expenses.
Is this a correct way of getting a CAP RATE? any comment will be appreciated.
Thanks
Thomas