What is a good Cap rate for a SFR in lower CT?

[Chris L.]

What would you consider a good cap rate and a minimum cap rate you would accept for a property in lower Connecticut? I'm looking at a property in Milford, in particular. 

[Jonathan Makovsky]

@Chris L.

Depending where in Milford it is, I would buy 5.5/6-caps all day. However, I'm not sure that's helpful because the problem with cap rates is that investors might underwrite assumptions differently. Our underwriting might come in higher because we tend to underwrite with slightly higher vacancies, cap-ex, repairs and we'll always include a PM fee.

Also, I'm not sure where in Milford it is, but just make sure that you find it if you'll need flood insurance (which can be a rental killer). Many homes in Milford - even if they're already raised - are not raised enough according to new FEMA standards.