Nikolai Ray is the founder and CEO of the MREX, creating marketplaces for multifamily markets and secondaries market for real estate. Nikolai discusses with Rand Partners how people overemphasize cap rates in value-add deals.
Key Information:
Cap rate is the annualized return on investment if you purchased a property all cash
The problem with focusing on cap rates with value add deals is that:
Debt is used to purchase real estate (leverage)
Cash flows aren’t stabilized, but cap rates are based on annualized cash flows
Don’t look at averages of exit cap rate, look at ranges
Connect with Nikolai:
Invest with Rand Partners
We're here to help create real estate entrepreneurs...
About Jake & Gino: Jake & Gino are multifamily investors, operators, and owners who have created a vertically integrated real estate company. They control over $350M in assets under management. Connect with Jake & Gino here --> https://jakeandgino.com.
Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.
