@Bryant Blackwelder, You may want to adjust. your time horizon if you want to 1031. 

Which areas would you consider emerging with a horizon of 5 years that will appreciate by then ?

There will be ups and downs along the way (like natural disasters, problem tenants, recessions, bad property management, etc) but if you can keep pushing through all these obstacles and keep your eye on the horizon that seems very far away, you're likely going to make money in the long run.

Conversely, a 6.5% cap deal might be a dog if there’s no upside from making improvements and negative rent growth is on the horizon (like you are seeing in San Francisco right now).If a genie were to grant me three wishes I think I just might use one of them to to ask that all real estate investors would immediately stop thinking that the cap rate associated with a real estate purchase means a darn thing.  

I do not know what your time horizon is. 

My question is: did you take into account the original poster's differing investment time horizon when you posted your response to me?

With the pandemic changing our lives daily and the sight of vaccines on the horizon, I'm very interested to see how that policy changes moving forward.

It takes 2-3 years for the regular lease rent amount to catch up with year 1 rent by the room rent amount  When analyzing only year 1, it’s hard to see anything making sense in our market, but if your time horizon is long enough, this market outperforms many when combining cash flow and appreciation.

Generally, they all wanted to start with something like 5K, and we showed them the numbers on how the ROI and time horizon beat stocks, etc.

That doesn't mean you should strive to waste your money, only that you shouldn't put too much weight on those factors if your horizon (as it should be for most) is measured in years instead of months.