would you invest with cap rate 8.22?

[Steve R.]

4 plex

list price $400k

fourplex : monthly total rent 900*4 = 3600

(appreciation stay the same for past 5 year)

• Capitalization Rate: 8.22

• Gross Annual Expenses: $10,700

• Gross Annual Income: $43,500

• Insurance Expense: $2,500

• Net Annual Income: $32,800

[Bjorn Ahlblad]

@Steve R. If the building is new and the tenants pay ALL utilities then doubling is overkill; but only then. There is a lot more to expenses than just payables. Vacancy, capex, mgmt, maintenance, bad debt (uncollectable rent). Expenses never include the increase from the new selling price which affects insurance and taxes. 

Always do your own underwriting as listings are very misleading. It is the sellers job to sell. All the best!