What is a good cap rate for apartments? Are they really better than SF and small Multis?
I am fairly new to investing, but want to grow aggressively and have been considering taking cash I have and investing in an apartment building (currently looking at 6-10 units).
I've done a lot of digging on the site and listen to the podcasts. I keep seeing/hearing the number "10% cap rates" come up, but I've yet to find a definitive answer on what is considered "good" when it comes to apartment buildings and what I should aim for when buying.
I have a few duplexes and single families and get great cash flow on them (which is what I personally want and care about) and they are all at 10-15% cap rates in A to B- neighborhoods (just selling on the regular ol' MLS) and don't really require a lot of upkeep, maintenance, etc and rent easily. I am familiar with the pros and cons of buying a small MF vs SF and large apartments, but even still, why would I pay a huge amount of money down to get a smaller cap rate of 10% when I can find much better cap rates elsewhere?
I ask because it seems to me that the average trajectory of an investor is to start off with smaller properties and eventually buy bigger ones, but these numbers don't really seem like growth to me. Again, I'm newer to investing, but is the economy of scale and ease of one building really worth it? In my case and market (Rochester, NY), should I be aiming for higher cap rate buildings?
Let me know your thoughts.