Well, with all due respect for the missives you have attracted thus far, you now have enough information that you would eventually find the pony, but you do not have the definition of "Cap Rate"
A cap rate is not a percentage and though it may be the reciprocal of the rate of return, and therefore related, it is not the rate of return.
The cap rate is the number of years it takes to get back your original investment (the capital).
That is to say that a cap rate of 8.25 means that if you invested 10,000 in your buddy's deal, you would expect to get back 1,212.12 per year, which would return your capital in 8.25 years.
The rate of return, incidently, on the investment, would be ~12.12%.
Since your buddy used the term "8.25%", he sounds like a fine financial genius who I personally would follow to the ends of the earth.
He doesn't work for Citicorp, does he????
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