Cap Rates: How to get accurate Cap Rates in Southern California

[Matthew G.]

First off I'm a newbie.

I'm searching on loopnet for MFP 4-6 units in Orange County in the $1-$1.5M range. It appears that even when I'm reviewing the pro formas for properties within a quarter mile of each other the cap rates are very different (up to 2% difference at times).

I'm trying to do some pre due diligence before I consider contacting the seller and ask for rent rolls etc. but it appears these brokers are just adjusting the Cap Rates to justify their asking price.

Further for most of these properties I'm seeing when I calculate loan payments for the year with 25% down I'm not even close to cash flowing.

Am I missing something?

Is investing in orange county strictly based on speculative appreciation of the property in lieu of 60% down payment to cash flow?

Maybe I should look for a larger property in a better market in another state? However since I live in So Cal I wanted to purchase my first REI property close.

Any thoughts? Anyone have solid ideas on how to find accurate cap rates? I want to value the property myself based on prior performance but clearly need to understand how these rate fluctuate so much.

Thanks