What is your target Cap Rate?

6 Replies

I have been looking at loopnet and other sources at multi-families and other investment properties. In my area the Cap Rate range seems to range from 3% topping out at 8%. I am curious what everyone's target, obtainable, Cap Rate is. 

So what is your target Cap Rate? 

12% in my current markets. I buy cash, 50-65k houses right now, and seller finance. I let the occupant maintain it, after I do some light rehab. It's the best type of SFH investing, in my experience. (get to know dodd frank if you want to do these types of deals).


I have 11 SFH's in rent-to-own contracts (tenant/buyer responsible for maitenance) at an average cap of 13.7%

Originally posted by @Dave Fontana:


 Same here.

The SFHs I do would be 25%. If I were to do a small multi  I want at least 10%. As big a concern for me is "Can I pull the deal off?"

@Brandon Cooper  In CA the cap rate is going to be much lower because of lower assumed vacancies and appreciation rates built into returns that have averaged much higher than other areas in the past number of years. The greater supply of investors in CA also contributes to lower cap rates. 

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