Am I missing something?

[Seth R.]

Hello all,

This is my first post to this site and I'm excited to see what happens! I've been trying to find my first multifamily (4-16 units) deal for 3 weeks now and have hunted through every listing I could find by owner and otherwise (hundreds, I imagine). My experience so far is that selling prices are at a cap as low as 5 and occasionally as high as low 7's. After 50%, reasonable CapEx, and debt everything looks completely crazy to me. One of my friends showed me a beautifully done deal book pitching a "stupendous bargain" at a 6.8 cap, assuming an exit 6.4, which similarly seems preposterous. What am I missing here? I'm being told by some, "now is a great time to get in, because of rates" but the prices seem awful and at record highs? Any feedback will be appreciated.