Advice on cap rates in BC

[Marco L.]

Llooking for advice on cap rates in bc. I'm on the look out for a multifamily apartment building smaller size 12-20 units and I'm finding some deals in the valley in the 3.5-3.8% range. All normal expenses deducted management maintenance landscaping and so on.

Does that sound about right?

[Mike Lang]

Quote from @Robert Ellis:

Quote from @Mike Lang:

While I can’t speak for what others are paying, I can tell you the cost to build new here is not inexpensive. 

 I have been running numbers on a 40ish unit new build on a property I own in what would likely be looked at as a 3rd-ary market. 
I am having trouble deciding if I should go ahead for a few reasons, one being that I would require outside investment and the cap rate could be as low as 4%, once rents are stabilized.
Now, that is using todays rents, somewhat conservative numbers, with a 3% vacancy when effective vacancy is 0%. 
The property is rural so cost of utilities and development may be higher, but on the flip side there is currently no competition, extreme demand and very few other properties that could potentially compete in the future.

 4% is crazy. I'd recommend getting involved early on in land acquisition, rezoning, vertical development and construction facilitation your equity will be substantially higher 

 It is not what I was hoping for! I’m creating the lot through subdivision and would need to be re-zoned so don’t think I can get any earlier on. I’d love to know what others would be looking at as a cut off cap rate for a similar sized new build in the area.

Are you working in the area? It looks like your in Ohio.