Want to know how to determine your price per door and the capitalization rate for properties in California and similar markets? First Cornerstone Group, LLC., real estate coach Terri Dobbs shows you how in this Q&A video.
Sean writes: “How do I determine price per door and cap rate for properties in California or markets like California?”
If you’re flipping the property, Terri said it is important that you find out your market cap rate by calling your broker. Students of real estate entrepreneur Lance Edwards are encouraged to fill out their deal sheets included with their Small Apartment home study system.
In general, properties in California, Washington state, Florida, New York and parts of Arizona will feature a cap rate lower than the national average, because the properties are priced higher. Terri said the reason is land is more highly valued in those regions of the country, and therefore, you will pay more per for acreage than the actual property. The land prices are also why you will find higher prices per door in California.
When you flip the property, you will want to make the cap rate “at least one solid point higher than your market cap rate,” Terri said. “That’s when you’ll know it’s a good deal.”