All Forum Posts by: Michael Janas

Thank you for the response! That is very helpful. Fortunately the commercial space is rented. Will be finding out more details on all the current leases but the building is fully occupied. Do you find that commercial mixed use is at a higher or lower cap rate in comparison to purely residential?

Hey everyone. I'm underwriting a potential deal on a 6 unit residential with a commercial unit on the bottom the floor. NOI is reported at 61k based on pro forma which I think after true expenses are accounted for is closer to 56-57k. Seller is valuing the property at a 7 cap off the 61k NOI. Wanted to know if this is a reasonable cap rate? My gut says that it's overvalued and that I should be offering more around a 8 or 9 cap based on the risk profile of the investment. This property is located in south New Jersey. Any input regarding what you are seeing from a cap rate valuation standpoint right now would be appreciated.