Cap Rates?

[CBBoston]

Getting cap rates from market player can be challenging. If they give you a cap rate you never know what's included in the I&O. Half the time I feel like I'm getting their best guesstimate of I&E. Only occasionally will anybody dig in the file to find the actual numbers. Getting equity rates is just as bad. In addition you really have to find out the loan terms for the comp. I've seen several deals lately with "special" financing. In the Boston market there have been so few sales in the last 9 months of most proprty types extraction isn't an option. Unless of course you're extracting the cap rate from where the sun don't shine.

 

[Abester]

Be careful of the appraiser that says the income approach not applicable because the subject is owner operated or is not rented. That in itself is no reason not to complete approach.

It's not a reason TO complete the approach either. The original poster has never clarified the issue of the typical market participant.