Investor Encyclopedia

Going-In Cap Rate

Going-In Cap Rate: a practical Canadian real estate investor guide to definition, deal math, underwriting use, common traps, and Realist.ca implementation.

Definition

Going-in cap rate is the cap rate based on current or first-year NOI at purchase, before the business plan is executed.

Example

In underwriting, tag going-in cap rate beside the exact source input and rerun the model when that input changes. The point is not a pretty metric; it is a better buy, hold, refinance, or walk decision.

Why It Matters

going-in cap rate changes what a disciplined buyer can pay, how much debt the asset can safely carry, and whether the return is coming from operations or fragile assumptions.

Investor Interpretation

Use it to kill bad deals quickly. If the back-of-envelope version does not survive conservative assumptions, do not spend five hours making it look alive.

Realist Tie-In

Realist.ca can make going-in cap rate searchable as an encyclopedia entry, link it to property underwriting, and show it beside listings, saved analyses, market pages, and investor lead magnets.