Northern NJ Cap Rates

[Jennifer Matesic]

It's My first time buying an investment property and I've been running numbers on a lot of properties in Nothern NJ. I am planning to do a Conventional 30/yr loan with 30% down and the cap rates are coming in real low - on average 1-2%. 

I am trying to figure out if I am allocating too much on vacancy (1 month) & capital expenses (1.5% of property value) .. what are investors here doing? 

Any feedback would be greatly appreciated.