Cap rates for 1-2 br condos and apts?

4 Replies | Philadelphia, Pennsylvania

What sort of cap rates are you getting? I am an out of state investor, and want to make a long term investment where I can put some of the responsibility on the HOA if they allow you to rent.

@Patrick Martone

Cap rates aren't used in condo. They are for commercial RE (MF 5-units and up). Also they vary in different areas of any given city. 

You should find another metric to use to analyze your deals. Perhaps ROI or CoC that you would want to have from your investment.

Hope this helps 

Originally posted by @Yuriy Skripnichenko :

@Patrick Martone

Cap rates aren't used in condo. They are for commercial RE (MF 5-units and up). Also they vary in different areas of any given city. 

You should find another metric to use to analyze your deals. Perhaps ROI or CoC that you would want to have from your investment.

Hope this helps 

Maybe ROI is a better language. Off the top of your head, what kind of roi are people getting on one and two bedroom apartments and condos?

@Patrick Martone

There is no specific number for ROI in general for any area. You can have very different ROI on the same property bought for the same price. It all depends on how you buy it (FHA, conventional, cash, private money etc.) Some of the properties that you can use BRRR strategy can have an infinite ROI. I try to keep all my properties around 2% rule. Some of investors I work with buying properties with 1% rule and some go below 1%. It all depends on your personal goal and type of properties (neighborhoods) you are investing in.

Hope this helps.

Yuriy