Newbie with Cap Rate and Area Questions
Hello North Carolina!
Just trying to do some due diligence for a deal that I've come across and wanted to see if you could help me out!
I'm looking at a mid-sized multi-family complex (9 units) in Rocky Mount and wanted to see what you guys could tell me about the cap rate for similar properties and the area class around there. I've spoken to brokers and to the owner of the property and I get mixed results. One broker has told me the going cap rate for the area is 7.5% another said 10%. The owner says it's a class C low income area, but others say B.
Obviously area class is mainly subjective, so I get the differences there. But I just wanted to see what opinions and such I get back from the helpful community of BP to help me sift through everything :) I'm looking to figure out the cap rate just to help determine the "retail" value of the property, and area class, well, so I don't buy in a war zone or have issues down the road.
This would literally be my first deal ever, but I am going to be partnering with my father who has over 20 years investing experience, but he would be new to investing out-of-state, so we just want to make sure we know enough about the area/market there before we dive in and submit an offer.
Thanks a ton!