Posted by Mark (SDCA) on February 11, 2000 at 11:23:41:
It completely depends on the area. Even different areas of the same town can have different caps. I won’t even consider anything below 10 and at this point (I am getting picky in my old age!!) 12 is pretty much the bottom line for me.
I don’t see how a 7 cap could cash flow out.
As for the 20% in the stock market… I wouldn’t count on that forever. The historical average is just over 10 (just over 12 for small caps). The last 4 years have been an anomaly. And actually most stocks went DOWN last year. ONly a few at the top are holding up the average. Maybe it is a “new era” or maybe we are just buying more tulips… Ever hear of the Nifty 50 and a “can’t miss, hold forever stock” called Polaroid?? Off my sopabox now…