Remember that in recent years, sellers and buyers saw real estate with "diamond" glasses. Many people bought with the expectation that they were going to turn a fortune buying and selling.
In today's market, the effect is similar, except the seller may be trying to paint a picture and you can no longer afford to "speculate". Investment property cannot be seen with the same eyes as you'd see the purchase of your home. If the numbers don't support the transaction...walk away.
Buy right, take it slow (specially if you're not very experienced), do your due dilligence (inspect, run numbers by an experienced real estate accountant, etc) and listen to your insticts.
A low cap rate may not be bad if you have the means to carry the property, if the property could command higher rentals as-is or after some minimal repairs like mainentance issues (paint, landscaping, parking, etc), or if you feel you can improve the vacancy rate in the building among others.
Remember though, you may need to fund out of pocket for several months to up to 24 months depending in the situation. If you feel you may fall short, find something else.
Remember, luck is when preparation meets opportunity. Don't let it be about bad luck by going into one of these deals unprepared. If you found a good opportunity, still, take all the precautions and prepare for all possibilitied, good and bad.
You also have to take into consideration vacancy rates as well as management expenses if any. We are seeing a lot of investors that see the potential of long term investment in South Beach and are willing to take on the projects even with very low cap rates.