Whats the difference between a cap rate and the gross rent multiplier?
***ANSWER: Cap rate is the opposite of a price/earnings ratio, used with stocks. Here are some random cap rates and GRMs in San Diego: Cap\GRM Area 4\15 Pacific Beach 5\13 North Park 5.3\12 El Cajon As you can see, as cap rates go up, gross rent multiplier goes down. Generally speaking… When you buy, you want a high cap and low GRM. When you sell, you want a low cap and high GRM. Hope that makes sense! San Diego Real Estate Investment Advice Free DVD of a Gary Kent Seminar http://www.sandiegorealestateinsider.com/free1031.htm Negative Amortization “We’re starting to shop lenders and loans before we buy a condo in University City. One gal we talked to told us about a loan that has negative amortization. What exactly is that, and is it something we should avoid?” ***ANSWER: Some adjustable loans allow payments that don’t cover all the interest due, thus letting you defer some or all of the interest (which is why they’re also called “deferred interest” loans.) The interest is added to y
