Sure you could invest in Lubbock TX, with flat (compared to inflation or national average) economic growth with a huge transient population of about 1/5 - 1/4 being college students and succeed in getting around 1%.

I see my equity rising rapidly on these apartment complexes, due to the forced appreciation, increased cash flow and significant paydown of the loans, just in the first 8 months to 2 years of ownership.To be forewarned is to be forearmed.  

As these markets begin to gain strength from supply of empty space being absorbed, job growth and population growth will again propel these markets.Real estate value investors are presented with inefficient markets when the prices drop below rising strong fundamentals.Find Inefficient MarketsMarket forces drive real estate prices higher or lower than intrinsic values.

And tracks inflation.... milk goes up - you can bet your parking tab will as well...... and best of all, you can't escape without paying your bill - unless you're trying to get rid of your car!

Will prices continue to slowly rise as they are doing now?

Interest rates are going to rise...

Assume a project cost in the 10-50mm range in gateway / primary markets 90/10 dealI currently use the following UW Assumptions: cap rate expansion: 5-10 bps per yearrent growth: 2-2.5% annualProduct type:                      mid rise affordable MF spec developmentTerm:                                 3 yrs holdYOC:                                   6-7%Trended ROC/spread:          150 bps > exit capLIRR:                                   16-17% EM:                                      2xLTC:                                    65%LPs pref:                              9%Waterfall:                            80/20 to 13%                                           70/30 to 18%                                           65/35 thereafterLook forward to what others have to say

And, unless you can reinvest it for 2.5% (rate of inflation) PLUS the mortgage interest rate, you'll be losing money. 

This changes the effective rate of financing to 4,000/100,000 = 4%.Additionally, after accounting for annual inflation of about 2% this gets reduced to 4%-2% = 2%.

When Genius Failed: The Rise and Fall of Long-Term Capital Management - By Roger LowensteinI think there's a good lesson for all of us in being humble, understanding the limitations of own brilliance and prowess, understanding the limitations of "overly-calculating" prices and risks that all the data and math in the world cannot account for (no offense "big data" folk and economic statisticians)!