Small Multi-family homes (2-4) 15MI radius around Joliet IL

[Shawn Alexander]

Hi all!

I currently have 1 SF rental in Joliet IL, been saving up and ready to start tansitioning into a small MF (2-4unit). With that being said I am looking at these MF homes and just confused on who wants to actually buy them. Most are selling from 300k-500k with a cap rate of 5% and a CoC return of 1-5%. Dropping 60k-100k for only 1-5% CoC return and a cap rate of 5% seems to be a waste of funds. Just bad deals or does anyone have any input? I could be missing something here.

Thanks!

[Lucas Miles]

@Shawn Alexander lot of this has to do with market cycles. Last 10 years real estate has been a very good investment to most people. This has led to a lot of people who've made money, gained appreciation, etc and have a lot of cash to deploy into another investment. This  high demand to invest combined with record low interest rates and very easy to obtain financing have pushed cap rates down and people taking on deals with smaller margins. Who knows if this will continue or not or if there will be a correction. In today market you have to get creative by either finding better deals or creating better deals.