Cap Rates Nationwide? Where is everyone investing?

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Zachary Inman
Specialist 路 Indianapolis, IN 路 Member since 2021 路 312 posts 路 282 votes
4y

Cap rate compression is real, and the risk premium has been reduced. With all the capital trying to get into multifamily right now, your best bet is to pick markets with the best fundamentals (population growth, job growth, schools, infrastructure, etc.)

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  • Kim Meredith HamptonBusiness Member
    Real Estate Broker 路 St Petersburg 路 Member since 2014 路 2k+ posts 路 2k+ votes
    4y

    @DongHui Patel Those great days are long gone. Here in Florida, I typically see 4-5cap with potential after value add proponents, could be 6-8 cap. The longer you wait to get in, the harder it is to build up your portfolio. Most investors are focusing on appreciation, and the rewards on the backside, not necessarily the cash flow at this time.

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  • Brian Pownall
    Investor 路 Houston, TX 路 Member since 2020 路 77 posts 路 66 votes
    4y

    Hate to break it to you, but generally not going to see those sort of cap rates in this economy. See a graph below of national trend. I recommend visiting Marcus and Millichap, NorthMarq, or CBRE sites and downloading their 2022 outlook. Should give you a good national overview.

    2Reply
  • Arn CenedellaPro Member
    Rental Property Investor 路 Greenville, SC 路 Member since 2008 路 786 posts 路 1k+ votes
    4y

    @DongHui Patel

    That ship has sailed. 馃榾

    Average cap rate nationwide is low 5%.

    Top markets like Austin DFW Phoenix now trade at 3% caps.

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  • Zachary Inman
    Specialist 路 Indianapolis, IN 路 Member since 2021 路 312 posts 路 282 votes
    4y

    Cap rate compression is real, and the risk premium has been reduced. With all the capital trying to get into multifamily right now, your best bet is to pick markets with the best fundamentals (population growth, job growth, schools, infrastructure, etc.)

    2Reply
  • Jordan MoorheadBusiness Member
    Real Estate Agent 路 Austin, TX 路 Member since 2015 路 5k+ posts 路 3k+ votes
    4y

    @DongHui Patel those are back in 2012, I'm seeing 5 caps at best even in C properties at any market I've looked at

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