Account Closed Cap rates have indeed compressed across all CRE asset classes however if you can lock in solid non-recourse low interest 10 year fixed debt/30 am then that 5MM, B class (stable or growing) apartment complex, 7 cap deal is a solid deal.  

I have looked at rates and fall in the top percentile of what it could rent for based on the size and location. median rates may have raised but I haven't seen the max rents increase at the same amount with a compression toward the top end. 

The area may be up and coming where market cap rate is projected to compress to 5%.

The attic space had blown-in cellulose that was deeper than the rafters, so you couldn't put a floor in without compressing the insulation and losing R value.What he should have done was to go out to look at other $600K homes in the area to get an idea of floor plans, finishes and materials. 

If you think a recession is coming soon then model out how that might affect rents over the next several years and purchased based on those compressed rents. 

Interest rates are helping the compressed cap rates.

Yes, yields aren't what they were a year ago, but the flip side to compressed cap rates is that for any given increase in NOI you create, you add that much more value to the property.Now if you buy at a low cap rate and then they start increasing, that's a problem.

Cap rates across the valley are compressed and I really don't see that as changing anytime soon.

Compressed wood cabinets which are now being replaced with real wood because they are literally falling apart with time. 

Caveat is that turnkeys sell for the high-end of market value, so disposal in the first few years will likely lose moneyCONSSpecific market and asset risk is long-term (per property - mitigate by diversifying across different markets and property types)Spreading risk across multiple assets and markets requires multiple investments and quite a bit of due diligenceTurnkey properties (along with most other single-family homes) are becoming harder to acquire and thus more expensive, compressing returns and making it harder to find properties to buy with solid cashflowPortfolio risk from individual units is high (until sufficient number of doors achieved to mitigate this risk)Using leverage requires qualifying with personal credit - may become harder/more expensive with recently-announced changes at Fannie MayRequires some effort (to "manage the property manager") and decisions required at some point for capital expendituresQUESTIONSWhat unique risks are there with the turnkey single-family rental model?