small markets and smaller buildings seem to cashflow better...true??

[Joe Smith]

From the research I've done, it seems there is a frenzy in the "big" markets like LA, NYC, etc that has pushed cap rates on fancy Class A buildings to ridiculously low levels, while the "secondary" and "tertiary" markets have far better deals out there if you really want to make cashflow.

This seems odd to me. Why is there this frenzy in the big cities, when, as soon as rates go up, all these 4.5% cap rates will suddenly be in a situation where either the investor has to sell at fire-sale prices, or, rents would have to increase considerably?

To me (someone who has only invested in SFR and Duplexes so far) this seems like a warning siren to stay away from the big markets.

I don't see rents increasing at a rate that will make these big city buildings profitable down the road, unless these new buyers take a bath on them at some point...am I right??

It seems to me that you make more dough cashflow wise on 5 $850k 20 unit Class B or C buildings in Akron, Ohio than on one 10 million dollar Class A in New York (if such a thing even existed at that price).