Investing in a low cap rate environment

[John Stanley]

Hi everyone,
I live in Germany and have been looking at buying rental property for about a year. In my area, buildings have gotten quite expensive but rents have stayed relatively low. In residential I'm seeing cap rates of 2-3% with full occupancy. I would have to put about 50% down in order to not have to pay out of pocket every month on the mortgage, which can mean 500k€ up front. In commercial property it's possible to find deals with 6-7% cap rate but the banks don't want to finance these as they see it as higher risk. People here tend to stay in their homes for a very long time so if you buy a rented residential property it's seen as a safe investment. How would you approach a situation like this? I don't want to get stuck with a money pit that I'm having to float along just to try to make profit on the back end when I sell the property. Thanks for your insights!