If your state has a security deposit cap collecting the year up front is problematic. 

Hey BP,I am looking at 5-plex opportunity deal and was hoping for a little insight on cap rates there.The property located in 35204 zip code.Does anyone happen to know what average cap rates are at right now in that area?

Hey BP, I am looking at 5-plex opportunity deal and was hoping for a little insight on cap rates there.The property located in  35204 zip code.

As well as moving from higher cap ex exposure to lower cap ex exposure.Cash flow may go down but when the other components of the IRR go up ( appreciation, depreciation, and amortization of the loan) your IRR goes to the moon and more than offsets any drop in cash flowJust make sure you stress test and can withstand any drop in cash flow.

You always invest on appreciation; forced or by speculation given the intrinsic properties of the investment-- location, scarcity, growth,  etc.The reality is low cap rates, likely non-intrinsic properties today are going to be better investment, if not best.

Many cities have implemented CAP's or maximum allowable licensable dwellings used as vacation rentals but some areas allow active STR permits can transfer to new owners upon sale.

Since there is a cap on the rental within the city limit, does that means there will be less competition for the rentals  

@Ashni Modi I really like new construction SFH in Casa Grande, you can find properties that make great rentals from $300-400k, they have a 7% rent to price ratio with zero maintenance repairs or cap ex.

Both are making money and have reasonable cap rates, a bit lower than I would like, however, not horrible Imo. 

I closed two weeks ago on a 3 BR in Lee Harvard It will have about 18% NET cap.