The term "cap rate" stands for capitalization rate.
To figure the cap rate, take the net operating income (NOI) and divide by the sale price.
So a property with $75,000 net income, which sold for $850,000 would have an 8.82% cap rate.
(75,000 / 850,000 = .0882 or 8.82%)
I hope this helps.
Sep 10, 2013