Announcement

Collapse
No announcement yet.

Cap Rates

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Cap Rates

    We have a refinancing coming up and I am checking on cap rates being used by appraisers. Mortgage Bankers are telling me they are about 6.5% to 7.0%. Anybody hear anything different? Thanks.

  • #2
    Cap rates will vary depending on how attractive your property is to large buyers. If you have a large class A property in a major market, the cap rate would be lower than a basic site in a small market.

    So without knowing more about the property it would be hard to say if it's good or bad. About a year ago mine (small market site, new construction) was appraised with an 8% cap rate. So to me your rate sounds good. But I have no idea if its an apples to apples comparison, and rates have been low lately due to the amount of money chasing these properties.

    A have seen two different appraisers more than $50k apart on a property. Numbers can vary very widely from one to another, especially if one of them does not have experience in the industry.

    Steve

    Comment


    • #3
      Steve is right. They can be anywhere from 5% to 8%. We had a rough warehouse in Toronto at a 5.5% cap. I think 6%-6.5% is decent.

      Comment


      • #4
        Echo the above 2. We have seen everything from a 5.25 to 10+ depending on market, physical quality and how well the facility is run.
        Chasing Perfection to catch Excellence

        Comment


        • #5
          Appraiser's accuracy makes Weathermen look perfect. It's a guess and there is no accountability in the system. But it's required so everyone uses them. Unfortunately, your livelihood and financial future can depend on their guessing. Good luck.

          I am seeing 8-9% in actual purchases in upper Midwest.

          Comment


          • #6
            If interest stays low 4.5% to 5.0% a lower cap rate ( 7%) might work, but if they go up to 6% or 7% go with (9% or 10%)
            Dave (Woodee) Scott

            Comment

            Latest Topics

            Collapse

            • razorback
              Reply to Disposal of returned lien sale property
              razorback
              Thank you for all the advice. This is the first time in over 10 years that a buyer actually brought stuff to me! I called the man and told him that I would hold his stuff for 2 weeks. He did come to get it. Afterward the buyer brought me a box full of personal papers. I just shredded them and went...
              Today, 12:29 PM
            • razorback
              Reply to I think I have a sneaky tenant
              razorback
              I had this problem back in November. Trust your gut on something like this and take time to look back at your security footage. My sleeper turned out to be hiding from his parole officer in his unit. Guess him and his wife didn't think that I would notice her dropping him off in the evening and picking...
              Today, 12:22 PM
            • Advantage IT
              NCSSA May Seminar 2018 Cornelius
              Advantage IT
              Anyone going to the NCSSA Event at the Penisula Club in Cornelius in May?

              Cindy Ashby and I are doing a Managers Seminar "Back to the Basics"

              We also have Megan Smith, a well known Self Storage CPA, is coming in from LA to do the owners line on Hot Topics as related...
              Today, 11:07 AM
            Working...
            X