a B property in a B area. Such a property would nor- mally trade around an 8 cap rate (they’re expressed in percentages, so technically it’s .08). Let’s look at what the formula tells us for value: = Value of $5,000,000 NOI of$400,000 Cap Rate of .08 Now let’s see what happens when the property is viewed by in- vestors as more risky, and thus acceptable only at a cap rate of 9: = Value of $4,444,444 NOI of$400,000 Cap Rate of .09
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owner: Redemption - (no access) - [David_Lindahl]_Multi-Family_Millions_How_Anyone_(b-ok.org).pdf, p84