Multifamilies in Lincoln, Nebraska

[Matthew Carlson]

Good afternoon,

Newbie here.  My wife and I are moving to Lincoln, Nebraska and are looking for a 2-4 unit multifamily (conversion or original) to house hack.  I've been running some numbers on on-market multifamilies and (when assuming the 50% rule... I know, big assumption) I find that cap rates seem to float around 5-7%.  Most properties do not appear to meet the 1% rule, but some do (maybe 10-20%).  

Just wanted to make sure that those numbers sound accurate to investors in the area and that I'm not missing something. I'm not worried about attaining cash flow in the short-run, but want to make sure I'm not buying into multifamily-hype when the area has had prices get too inflated and push down cap rates. I've been told that the Lincoln market has been hot this year (like many markets) and I have seen properties fly off the market in days (mostly SFH but some MFH).

I'm going to buy something soon (SFH or MFH) on a conventional loan with the intention of moving on and renting it out a year later, and I'm trying to decide if multifamilies are just too hot to touch right now and if I should just look at SFHs (if they have better cap rates).

Any feedback and advice would be appreciated.  Thanks!

Best,
Matt