Cap rate = NOI/Purchase price Therefore,  if you can increase your NOI by either decreasing expenses or increasing revenue, your cap rate will go up. 

So if you know you want to invest in Pittsburgh (just to make up a random city) and your plan is to scale to 10, 20, 30, etc. units then you really decrease the marginal travel costs. 

@Blaine Cox It CAN work, but its largely based on geography and how shrewd of a negotiator you are, it sounds like in the example above you needed a lower purchase price or a way to decrease the rehab cost 

Keep in mind you may get a 7 year term on a 20 yr am - which would increase payments and decrease cash flow accordingly. 

- What level of rent decreases can you sustain if new units become available?

The value of money decreases. 

This would make your property value decrease and be less marketable.

With competition, quality rises and costs to the consumer decrease.

I have seen everything from single-family homes, apartments, and large multi-family buildings go green/near-net-zero and at the same time: increase revenue, decrease warranty issues, decrease turnover, and have happier renters who take better care of their units. 

The only good news I can think of is my insurance and taxes may decrease however I did buy this property with the intention of having 3 separate units.