Investing in low cap rates, how does it make sense?

[Eric Berkner]

In the portland metro area, like most areas now, are low cap rates, near 4.5%. Mathematically it doesn't make sense to invest, however I am comfortable in this market and I know it very well. I'd be nervous dumping several hundred thousand dollars into a market in say the midewest that I know nothing about just for a higher cap rate/return. How can I make it work to invest locally with the low cap rates? Value Ad?