The Importance of Cap Rate in Real Estate

Tom Burns: Can you still find a property for $100,000 in the US? Oh, not, I can't, Tom Burns can't. One of the most important numbers in real estate is cap rate. So essentially if you bought that $100k property for cash and it had a 5% cap rate, essentially that's telling you that you'll make $5,000 a year. And that's after expenses, right?