Help me understand my marketplace... are these deals?

[Ian Bower]

Hey all, 

I've been looking for my first investment property in my local marketplace (2 hour radius around me) 

Here is what I have been finding for the most part... 

SFR - Low cap rate (3% or so)

Multi-Units - 10% Cap Rate, but poor condition*

Multi-Units - Low CAP rate, tenant occupied*

I understand my options for fixing things up at a property, but here are the issues I am running into.. 

*Tenant occupied properties usually have below market rent, often VERY below market. If the rent matched market prices it would be a good deal, what should I do here? 

*Tenant occupied properties that need a lot of work - especially when combined with my point above. I can't renovate with a tenant in the property, especially if they are paying below market rent.

I DO find some properties that are in good shape, even tenant occupied that have a low cap rate - or SFR that have a low CAP rate - Should I be considering these properties?

So I guess overall, my question is can you help me align my expectations with what I am finding, is this a case of "yeah, the market is weird right now, this is typical, you have to make a decision" or... "Look harder/Look differently"

Thanks!

FYI I think that low CAP rate is sub 5%, please correct me if I am nuts.