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  • CAP rate question

    If purchasing a value add, is the cap rate based on the future value after your improvements?

  • #2
    What do you mean by "purchasing a value add"?

    CAP rate is based on actual numbers that are on paper, not future numbers that could be anything. NOT what the seller says they are or could be. Ask the seller to provide the paper to back up his/her numbers

    Also there is more than one way to figure the CAP rate so make sure both of you are talking about the same numbers

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