Why are the cap rates in mid-western cities so high?

[Aaron McMahon]

I've been looking for multifamily units in mid-western cities like St. Louis, Cincinnati, Dayton and Louisville. I've noticed that in some cities like Dayton, the cap rate for smaller MF properties is around 10 to 12%.  What's the reason for that?  Should I be suspicious or excited?

I'm looking for MF properties from 4-plexes up to about 20 or 25 units, so maybe it's just the smaller properties that have high cap rates.  The prices seem very low, too, and I'm not sure why. Example: a 4-plex for $79,000 with a cap rate of 13%. The pictures of the units look fine and it's not a dump.

Anybody know anything about these markets and can you explain what's going on?  Thank you!