cap rate =  net operating income (NOI)

                      current price

 

In general, a property with a higher cap rate is a better deal, assuming the subject property doesn’t have significant deferred maintenance 

or is in need of expensive repairs.

 

In looking at the Q1 & Q3 2022 multi-family (apartments) cap rate spread, graphed with the 10-year treasury yield from Freddic Mac, 

the cap rates are actually lower than what you’d expect an investor would have to pay for a commercial loan.  In this example, multi-family properties 

are expensive (low cap rate) therefore not as good of a deal during that time period.