“I never underwrite to a lower cap rate… if cap rates increase, you totally miss your mark.”

Frank Patilano · Ironclad Underwriting Podcast · Two Underwriters, One Deal: Why Real Estate Valuations Differ

Play from 21:39
21:39

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What was described

Advocates not underwriting to a lower cap rate even if market forecasts suggest it

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“At a 5% cap rate, essentially… for every $1 of rental income, we're getting 20 times that in valuation… if the lower it goes, so if it's a 3% cap rate, $1 of rental income is worth $33 in value.”
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