@Steve F., I purchased this in the Lowell district which is a C class area. From what I was told by my realtor is that it is an area being fixed up as time goes on due to its proximity to down town. However I am not really sure now that where my property is if it will ever get fixed up per se. There are some sfh in the area being remodeled.
Purchase price was 275K, rents at that time were around $2400/month which were under market value. Some of the rents had not changed in 10 years from the lease agreements I saw.
Your right on the cap rate not really defining the value of the property since it is considered residential. Its been quite the up and down with this place in the last 1.5 years. Evicted a tenant right off the bat that was paying $650, and turned over unit and rented out for $750. Unfortunately the gal that moved in has not paid rent for 3 months because she lost her job due to COVID so that sucks.
One of the tenants that was paying $625 passed away in April, turned unit over and is currently rented for $795. The other 2 units are still section 8 and I raised rents $25 last year so they are at $650 which is obviously wall below market. Was going to increase again this year and then virus messed that up. I can only raise 8% a year now do to new laws so it will take a while to reach market rent without a turnover.
Property value is probably around $325 at the moment and would be higher if the rent in the other 2 units were higher.