What is a Capitalization Rate? | How To Calculate Cap Rates for Commercial Real Estate

Do you know what cap rates are and how to calculate them on your commercial multifamily real estate properties?

In today's video we catch-up with Alfonso Cuadra, AKA the Godfather of Real Estate, and he breaks down and explains what capitalization rates are, how they help determine the value of a property and how to calculate them!

Did you enjoy and get value from this video where Alfonso explains how he finds multifamily properties & apartment buildings? Want to see more of Alfonso on the channel?

Make sure to SMASH the like button and leave a comment down below!

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[TaherAfridi]

This is so much value and simply delivered! Thank you 🔥🙏.

Q, please: does the property condition affect the cap rate for the same area? Say between a turnkey property and one that's a little beat and needs some TLC?

[Walina-gvph]

Cap rates do not measure returns, Cap rates are a value metric. All a 10% cap rate means is that an investor paid $10 for a possible dollar of NOI. V=i/r $10=$1/10% A 5% cap rate means the NOI sold for $20. See, there is no "return" there.

[mattbarge]

What about cap rates of multifamily short term rental? I want to know the right cap rate for a 10-unit building comprised 100% of short-term rental in downtown Dallas TX