CoC and Cap Rate Correlation
Hi everyone,
I was looking at an investment property that returned a 5% cap rate after renovations.
The cash on cash return is basically 1%
Can everyone give their two cents to what their cap rate is on your properties as well as the CoC return. What is the correlation?
I don't see how a 5 cap (which is a decent return for today) achieves such a low CoC.
Note: I am putting 35% down once the building is stabilized.