...This is a cyclical nightmare in my head...
Yep. You're chasing your own tail. You got the formula correct, but the "cap rate" should be the cap rate of comparable properties that have recently sold in the local market. Sometimes this cap rate is referred to as market cap rate. You don't calculate this rate, you find this rate by speaking to commercial brokers in the area as they would have this information. Again, you calculate the value of the property you're analyzing by taking the verified NOI of the previous 12 months and then divide that by the MARKET cap rate. So you do not use the cap rate of the property you are analyzing... this is what led you to chase your own tail (or cyclical nightmare, as you put it).
As far as the article that you referred to, well... you need to read the articles on BP with a grain of salt. Some of the authors of BP articles should not be considered an authority on the subject, sad but it's a fact. I always read BP articles with a grain of salt... on some articles I have to add tequila... LOL
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