Where Should I invest for 7% Cap Rate and 3% Annual Appreciation?
Hi All,
I am a first time real estate investor approved to buy a property that is about $1MM. I am from West Los Angeles, CA, which is a market where cash flow is hard to come by. I have decided I may need to invest out of state to reach my investment criteria. Does anyone have unbiased advice or some ideas on where I should invest if I am looking for a 7% cap rate and 3% annual appreciation (if that deal exists).
Thank you in advance for any help, I really appreciate it!
-Lance
Most Popular Reply
Whoa, whoa, EXACTLY what do you think a cap rate is guaranteeing? All a cap rate is doing is telling you what ratio you paid for a NOI. Doesn't mean that you will collect that NOI or that EVEN if you do you will turn a profit. AND if you don't have a reliable source for market cap rate comps it won't even tell you if you grossly OVERPAID the property.