Development beats high interest rates

[John Anderson]

High interest rates have evaporated most cash flow opportunities. A severely low housing stock and unmet demand means that development is a promising strategy in this environment.  Whether it is land development or vertical construction, these type of projects have substantial enough margins to absorb the higher interest rates. 

[Chris Seveney]

Quote from @John Anderson:

High interest rates have evaporated most cash flow opportunities. A severely low housing stock and unmet demand means that development is a promising strategy in this environment.  Whether it is land development or vertical construction, these type of projects have substantial enough margins to absorb the higher interest rates. 

 I think this depends on the location as well as how you are raising your capital. While interest rates are high the lenders are still requiring a significant amount of capital. 

For me, I do not know why people do not do private lending. With rates as high as they are getting mid double digit returns on private lending is something that can be accomplished and you can manage risk based on LTV and borrower credentials.