Start factoring in leases rental increases, tax depreciation, cap rate compression and the cash flow is nice and so is the equity growth.I don't like dumpy areas that are cash flow only.

That's the only way to insulate yourself from a downturn like this. are you seeing that kind of price compression in Scottsdale right now and across the board ? 

I'm in the DFW market and cap rates have compressed to the point where larger multifamily deals will not support the 1% rule or 10% cap rate.

In fact, your statement kind of proves my point, at least the point being made between the lines - too many PPMs being floated today are desperate attempts to load up on inventory ahead of the perceived further compression of deal flow. 

This yield “compression” is not just applicable to conventional residential mortgage loans; it’s across all asset classes.  

Also returns get compressed when you have normal fees involved like tax returns, corporate filings, form D filings.I recommend nothing under $5M today. 

I'm watching Twin Aire very closely as the city has some developmental plans going on.http://liscindianapolis.org/media/Twin-Aire-Abridged-Plan-ilovepdf-compressed-1.pdfThere are also several westside projects scheduled over the next 5 years or so that will be changing the near West side and the Riverside/United Northwest Areas.Personally, I'm a bigger fan of already established areas on the outskirts of town where we can get good tenants now.

Profit margins will compress yes, but at a point it is at a minimum standard and it is take it or leave it.

This is why, for example, the Smoky's prices have soared astronomically over the past couple of years: the gross rents justify it until the returns are compressed enough that investors no longer will pay more. 

I would be happy to take some risks if the upside was worth it, but at the moment cap rates are still compressed, so maybe not worth it.