Newbie from Los Angeles - where have all the good cap rates gone?

[Daniel Smith]

Hello, BP residents! I'm a new investor from Los Angeles (Studio City, to be exact). I'm in the entertainment industry but ready to branch out to REI. Looking to start investing in SFR rental properties in the greater LA area or, alternatively, finding good turnkey opportunities in other areas (Las Vegas, Kansas City, Chicago?).

But where have all the good cap rates gone?

I've been focusing on some of the more desirable areas of LA that feature good schools and good potential for future appreciation. In the last month or so of sifting through every available listing, it seems as if every single property offers a cap rate somewhere between 0-2.5%. Yikes. I might be new at this but even I realize that's not a promising entry point for a new investor.