Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
2y
If it is a commercial property, that is a very attractive Cap Rate. I would be pouring a lot of effort into underwriting with the potential to acquire the property.
Since I have not seen Cap Rates on commercial properties anywhere near that, I assume you may be referring to a single family, duplex, tripex, or quad. In that case Cap Rate is really not a relevant metric. The deal may be great or terrible at that Cap Rate. I would want to know if there was any equity capture and cash-on-cash returns after rehab.
If your goal is cash flow to retire early, would you buy an 11% Cap rate deal with current interest rates? (C-class neighborhood and property)
If it's a C-class neighborhood and property, it may not be the best deal. Is it in the path of progress at all, what's the tenancy, what does future cap-ex look like? While it looks good on a spreadsheet, there are too many unknowns to answer properly.