Simply measuring CAP rate vs. Interest Rate to determine the viability of an investment will often push an investor to over-pay for a property, particularly during periods of deflation. If nothing else, the CAP rate vs. Interest Rate “positive financial leverage” misnomer significantly increases the risk profile of an investment by accepting a low yield today (because your debt service allows you to) in exchange for future POTENTIAL income growth. In other words, the majority of the investment’s IRR is placed in “market momentum”, or appreciation, which, I would argue, is more “real estate speculation”, as opposed to “real estate investing”.