Ok,
I’ve been looking at some properties I am thinking about buying but I have a few questions. I have yet to contact the broker and ask him these specific questions because I wanted to come here first.
My 2 questions are:
1. What is cap rate? The property I am looking at has a “Cap Rate” of 11.01%. Is a higher or lower Cap Rate better? I’ve seen them vary from like 4% to 12% but I don’t know exactly what that means.
2. What is Annual Debt Service? I know this has more to do with the actual loan I will be needing for this property but what is it in relation to the grand scheme of things? How is it calculated?
Here is the property so see the details if necessary…
http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=15400056&SearchID=336557013&SearchResultID=336557013&ResultCount=9&PageNumber=1&ItemIndex=3&PageSize=20&OptionType=Search&PgCxtGuid=18b1d233-04a1-4358-8a0d-197e98362bd3&PgCxtFLKey=&PgCxtCurFLKey=SavedPropertiesFS&PgCxtDir=Down




