Cap rates - small vs large multifamily

[Ryan Weddle]

Hi all, new investor here, learning how to value properties. I read the most recent CBRE cap rate survey and a few other sources for cap rate information. It seems those surveys are typically focused on larger multifamily properties (naturally - I can't imagine the garbage data you would get trying to put that info together for every 4-flat that sells).

So I'm wondering how you think those cap rates translate to smaller properties. For example, Class B cap rates in Indianapolis are shown as 5.5-5.75%. I would think cap rates on smaller properties would be slightly higher for reasons similar to suburban rates being slightly higher than infill, and Tier 3 cities being higher than Tier 2. Is that the case? And if so, what type of spread would you expect to see for a 4 or 8 unit building vs the survey rate? 

And as I hinted at with the "garbage data" comment above, I understand there will be a ton of variance in cap rates for small properties, but I am still very interested in your thoughts on the question.

Thanks!