I find the cap rates for these to be very compressed on the West coast.. and can be very high out in the mid west deep south..

My biggest concern for his business is margin compression.  

That was recently lowered to 4.26 million, and even achieving that could be a struggle if mortgage rates don’t move sharply lower.The positive spin to all this is that every year we have existing home sales below 5 million units is just “compressing the spring” further.

Considering this is the outcome of a foreclosure, achieving this strategy would compress the timeline and save on legal expenses.

In lower vacation/rental cycles of the year your margins could get compressed. 

My initial properties were purchased with the understanding that compressing interest rates and high housing demand would allow for an agressive buy/hold and refinance cycle.

Now that we are in a high interest rate environment with high prices, real estate yields have been compressed, and are generally not worth it given their risk profiles.Thank you for taking the time to reply with your opinion.

They were based on assumptions that low floating rates would stay low forever and so would cap rate compression.

They carry a giant debt load and debt service, there income is HIGH RISK for compression and decline, so no, they scare me. 

Whats worse is I know some GP's do not even know what the definition is. precisely, there should be like 10-20 self-certification question, for example givethem question like this:a) if gp is buying with 5% cap rate and interest rate is 3% with rate of change of appreciation per year is 0.25% cap rate compression, what would be the IRR for investment ?