Cap Rate Determination - Twin Cities, MN

[Riley Blake]

Hi,

I'm trying to determine the cap rate in my area. I could look at sales comps, but are there other resources that I can utilize to find this percentage, or is it best to talk with local realtors to find out? I'm looking in the Twin Cities, MN area.

- Riley Blake

[Amber Gonion]

Shorthand currently for the twin cities pricing is projected rents times 1.1 (A/B class suburban good area Wayzata, Prior Lake, White Bear Woodbury types), (1 B/C class good area but surrounded by bad), (.9 C/D class poor areas), (.8 D class areas you wouldn't bring you mom to see the house this could be even less)  after multiplying by the above numbers multiple by 100.  That it a typical  sold price in the cities right now, of course many other factors go into it, but this is good for the ball park. 

So 1500/month rent on a a suburban duplex=$3000X1.1=3300x100=330,000.  Looking at tons of properties a day this is just what the prices tend to end up at, some areas are much higher some much lowers that these rates.