I was in my office one day, when a real estate investor called me on the phone. He said, “Garry, I just had one of my tenants move out – and they took the refrigerator with them! They said it was theirs.” Uh oh.
They took the refrigerator!
I immediately called the seller, who explained that those particular tenants had previously sold their home, and so they had brought their own refrigerator with them. He had simply forgotten, and there was no mention of it in the lease.
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Walking and Talking … Cap Rates!
Cap Rates. You hear about them all the time, from people who specialize in investment real estate. They’ll says things like, “That property sold for a 6 cap,” or, “We’re looking for properties priced in the 9 to 10 cap range.” Today’s Walking and Talking podcast is all about Cap Rates!
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Today, you will learn 5 things:
- What is a cap rate?
- The reason why so many people are often confused about cap rates.
- The best way to remember how to easily calculate a cap rate for any investment property.
- The five main factors that influence cap rates.
- Why you should beware that all cap rates are not created equal!
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What they all have in common. This was what I wanted to know. In my first book, Walking and Talking – 57 Stories of Success and Humor in the Real Estate World of Business, I recounted stories from some of the top real estate professionals in the Midwest. After observing their careers and listening to their stories, I asked myself this: Other than their sheer success, what do all of these winners in real estate have in common? This is what I learned:
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4 Characteristics of Top Real Estate Pros …
1. They create structure in an unstructured environment.
Real estate is not your typical 9 to 5 job, where opportunities are clearly identified and day-to-day responsibilities are well-defined. It is up to the real estate professional to identify the problems and opportunities; to set a plan of action that will bring success. They are not told how to allocate their time, or which deals to pursue or ignore.
The successful ones create a great framework for activity.
I will never forget the day I learned my first lesson in commercial real estate. It came shortly after I joined a team of 25 brokers at Coldwell Banker Commercial Real Estate. They ultimately became a who’s who of Columbus real estate that included Richard Schuen, Ed Joseph, John Hall, Don Matsanoff, Greg Schenk, Chuck Manofsky, Doug Goddard, Ted Hobson, Bob Matias, Benton Benalcazar and several others.
The Day I Learned About Walking and Talking
One of those brokers was Wayne Harer. Wayne played 10 years of minor league baseball for the Red Sox and Yankee organizations and actually won the