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Real Estate Broker · Seattle, WA · Member since 2020 · 62 posts · 33 votes

I am an investor and real estate agent and I've just secured a fantastic deal (duplex) for one of my clients, featuring an impressive 8+% cap rate with reliable tenants already in place, no repairs needed. Now, I want to hear from you seasoned investors out there – what are your thoughts on an 8%+ cap rate? Is this the kind of investment opportunity that gets your attention? Drop your insights and opinions below – let's start a conversation about what makes a great real estate investment in this market! 💼📈

Looking forward to hearing from all you savvy investors and/or new investors that want to learn more about opportunities like that!

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Michael SmytheBusiness Member

Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes

So little info in your post, sounds like all hype for more clients.

What Class is the property - A, B, C, D?

Please define, "reliable tenants".
- Did you make this statement based upon their credit scores?
- Rental payment history over the last 2 years?
- How long have they even been in the property?

When do the current leases end?

How thorough was the buyer's inspection?
- Was the sewerline camera'd?

If this is a Class A or B property and all the questions above properly addressed, then from what I've read of the Seattle are market, this appears to be a great deal.

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Linda LabbePro Member
Investor · North Bay, Ontario · Member since 2015 · 709 posts · 263 votes
3y
cape rate is relative to location.. I invest in Detroit Toledo area and we dont touch anything with less then 15 % after expenses everything we buy is at least on the 2 % rule. Some areas this cant be dine so people are happy for less because they want to stay local. We specialize in finding projects for people doing 1031 exchanges
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Michael SmytheBusiness Member
Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
3y
So little info in your post, sounds like all hype for more clients.
What Class is the property - A, B, C, D?
Please define, "reliable tenants".
- Did you make this statement based upon their credit scores?
- Rental payment history over the last 2 years?
- How long have they even been in the property?
When do the current leases end?
How thorough was the buyer's inspection?
- Was the sewerline camera'd?
If this is a Class A or B property and all the questions above properly addressed, then from what I've read of the Seattle are market, this appears to be a great deal.
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Julien J.
Investor · CO · Member since 2016 · 757 posts · 1k+ votes
3y
Well done @Marcela Hoag!
Sounds like a unicorn in our market.

Do you have a steady pipeline? I have a fair amount of buyers of this type of product and nothing on the MLS fits an 8% cap in the Seattle area.

Do share more details, I am curious.
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Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
3y
8% net or gross? If gross well sorry I would not touch it. All my personals are about 15- 20% NET, based on cash purchases.
All the best
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Nathan Harden
Real Estate Agent · Puyallup, WA · Member since 2022 · 551 posts · 379 votes
3y
It all depends on where you found it? 8% is great for some zip codes and mediocre for others.
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Eric Yu
Real Estate Agent · Seattle, WA · Member since 2019 · 243 posts · 246 votes
3y
Quote from @Marcela Hoag:

I am an investor and real estate agent and I've just secured a fantastic deal (duplex) for one of my clients, featuring an impressive 8+% cap rate with reliable tenants already in place, no repairs needed. Now, I want to hear from you seasoned investors out there – what are your thoughts on an 8%+ cap rate? Is this the kind of investment opportunity that gets your attention? Drop your insights and opinions below – let's start a conversation about what makes a great real estate investment in this market! 💼📈

Looking forward to hearing from all you savvy investors and/or new investors that want to learn more about opportunities like that!
Depends on the area for sure. 8-cap in Seattle area is fantastic, especially if it's a multi-family type property. I'd be interested in 8-cap deals out in Seattle & I know plenty of investors who would be interested as well :)
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Ran Iarovich
Real Estate Agent · WA · Member since 2021 · 254 posts · 173 votes
3y
Are you in Seattle? If so that is insane for your location because of the added appreciation. I guess in the end it depends on whether it is net or gross.
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Engelo RumoraBusiness Member
Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
2y
Quote from @Marcela Hoag:

I am an investor and real estate agent and I've just secured a fantastic deal (duplex) for one of my clients, featuring an impressive 8+% cap rate with reliable tenants already in place, no repairs needed. Now, I want to hear from you seasoned investors out there – what are your thoughts on an 8%+ cap rate? Is this the kind of investment opportunity that gets your attention? Drop your insights and opinions below – let's start a conversation about what makes a great real estate investment in this market! 💼📈

Looking forward to hearing from all you savvy investors and/or new investors that want to learn more about opportunities like that!

Hi Marcela,

8 cap is decent if it's completely hands off and has upside.

Personally, as a turnkey provider and property manager and someone that is on the ground working the market, I wouldn't get out of bed for anything less than 15%.

Granted, I have the "luxury" of living/working in a tertiary market like Toledo so I can sit and wait for a deal with great numbers to come along.

For example, just looking at a 6 unit in a B+ area for $160,000. Rehab needed is $50,000 - $70,000.

ARV is $350,000 and current rents are $3,500 and should be increased to $4,500 combined monthly.

Thanks
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