Whether or not it's a good cap rate depends on a lot of variables, most of which are related to your comfort level for risk, your investment goals, and what you can tolerate to achieve the top returns. High quality,low maintenence properties can sell for higher prices, hence lower cap rates if the market will bear it. If you are into turnarounds/rehabs, you should shoot for at least a 10-15% cap after the project is done. If it's running great on it's own without needing anything, some folks will buy at a 6% cap if their financing rate is low enough, or all cash deal.
Sep 28, 2009