Compressing cap rates has tightened deal flow while rental demand continues to rise.

Most newbies are young, all the more reason not to compress the preparation/learning phase as you have your whole life ahead of you.

ROI is getting compressed with every investment class at the moment, but yes they are much lower than a year ago, or a month ago.

“Considering the amount of capital targeting this real estate sector, there is sufficient spread between the cap rate and bond yield to allow for modest continued compression in cap rates as we saw in 2021,” when rates declined about 10 basis points.An encouraging sign is that rising interest rates probably won’t significantly impact key loan-to-value or interest-only provisions.

I look for groups that never compress cap rates on exit relative to entry, but also in today's market UW exit caps that align with market cap rates back in the early to mid-2010's, i.e. buying at a 3% today and underwriting a 3.5% on exit in Dallas is not conservative enough for me.  

Cap rates are pretty compressed right now, historically speaking, so most of us right now are underwriting with some expansion in mind.

I did not want to pay this inflated price and was naive. 2 years later I purchased the same property for $1.2 Million and nothing changed in those 2 years besides everything appreciating and cap rates compressing.

@Jake Fugman and I run an investor focused realtor team in Chicago and lately we’ve seen a shift where we are finding a ton of great deals for clients in the mixed use space above $1m but it seems as though pure multifamily cap rates for 5+ units above $1 million are just compressed (thus values overinflated).

The market could be at the top, or it could just be ROI compressing.

That said, prices have increased quite a bit on multifamilies which has compressed returns.