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    ltifamily is often expressed as a function of the Gross Rent Multiplier (GRM), but more accurately reflected in the capitalization rate (cap rate).

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    I had the opportunity this past week to answer a number of questions about apartments. I find a great deal of misinformation out there concerning the financing of this excellent type of income producing investment. Before going into some common misconceptions, I should explain the state of the apartment market in general.

    Apartments are seeing an overall increase in rents after a long period of stability thanks to the increase in single family home and condo prices over the past few years. Some markets, such as Houston, are overbuilt. Others, such as Los Angeles, are radically over priced. Pricing in multifamily is often expressed as a function of the Gross Rent Multiplier (GRM), but more accurately reflected in the capitalization rate (cap rate).

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    ncing of this excellent type of income producing investment. Before going into some common misconceptions, I should explain the state of the apartment market in general.

    Apartments are seeing an overall increase in rents after a long period of stability thanks to the increase in single family home and condo prices over the past few years. Some markets, such as Houston, are overbuilt. Others, such as Los Angeles, are radically over priced. Pricing in multifamily is often expressed as a function of the Gross Rent Multiplier (GRM), but more accurately reflected in the capitalization rate (cap rate).

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    Apartments are seeing an overall increase in rents after a long period of stability thanks to the increase in single family home and condo prices over the past few years. Some markets, such as Houston, are overbuilt. Others, such as Los Angeles, are radically over priced. Pricing in multifamily is often expressed as a function of the Gross Rent Multiplier (GRM), but more accurately reflected in the capitalization rate (cap rate).

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    ondo prices over the past few years. Some markets, such as Houston, are overbuilt. Others, such as Los Angeles, are radically over priced. Pricing in multifamily is often expressed as a function of the Gross Rent Multiplier (GRM), but more accurately reflected in the capitalization rate (cap rate).

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    ltifamily is often expressed as a function of the Gross Rent Multiplier (GRM), but more accurately reflected in the capitalization rate (cap rate).

    The GRM expresses selling prices and value as a multiple of the annual gross rents. A property selling for $1,000,000 with $100,000 in annual income has a GRM of 10. However, it doesn’t tell the whole story. The cap rate measures the return on investment for the capital invested in a property. Using our GRM information, we could have two vastly different cap rates on two seemingly similar properties.

    The cap rate assumes that the property is purchased all cash and is calculated by dividing the Net Operating Income (NOI) by the purchase price. If we had two properties selling for $1MM with Gross Rents of $

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