The cap rate isnt 7%. You need to calculate based on the value not your purchase price. Return on Equity is the number you want to be looking at. You own the homes outright and they're worth 1.1m. Add up cash flow + expected appreciation + any tangible tax benefits and divide that by 1.1m to get your ROE. Rough numbers would be 43k cash flow + 22k appreciation (2%/yr)/1.1m which is a 5.9% annualized return. That doesn't get me excited at all. I'd start selling or 1031 into something different.
Statistics: Posted by Bikesy — Fri Jul 12, 2024 5:44 am