CAP Rate On Mortgage Amount?

Hi guys. Is it normal practice for a real estate agent to give a cap rate based on the mortgage amount instead of the purchase price?



From my reading, cap rate should always be NOI/purchase price?



This agent gave a cap rate with nothing down (purchase price), then a higher one with the 20% down (correlating mortgage amount with purchase price)



Thanks

Comments(3)

  • cjmazur20th January, 2008

    I hve an issue w/ bluntness that I am working on. Thanks for the clarification.

  • PosCashFlow20th January, 2008

    Thanks guys. What is interesting is that this agent is very knowledgeable. I have a feeling he is trying to manipulate the facts to make it seem like a better deal while at the same time trying to gauge my level of understanding.

  • PosCashFlow21st January, 2008

    I see, good point!

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