That the cap rate is net operating income (NOI) divided by the sales price or value of the property? NOI is annual income minus expenses, before income taxes and interest.
A five unit apartment building with monthly rents of $3,750 would have a maximum gross annual rent of $45,000. ($3,750 x 12 = $45,000). If the total annual expenses were $25,200, the NOI would be $19,800. ($45,000 – $25,200)
If the sales value of the property was $450,000 the cap rate would be 4.4%. (19,800/450,000)