Two investors explain how to evaluate real estate deals with cap rates below 8%. They break down the relationship between property class and target returns, and show how net income adjustments can justify lower cap rates when the numbers align with your investment criteria.
Laura and I were sitting when we— Laura, we were in that theater in San Jose. God, a huge aha for me when I learned this and I got the correlation.
But I think there's also criteria that are necessary to understand them as well. So let's put the criteria. Speaking from the terms of investment property, properties that rates under 8%, what are the tips and nets on that property to be justified as anything under 8 cap? And then A, Class B, Class C, like, this is the criteria necessary to justify 5, 6, 7, 8 cap rates.
