I found all these rates and investment return to be very amusing:
average CD rates: 4.5-5% Highest CD rate ever recorded: 7% (how they could made money over this I dont know) Typical MF cap rate: 4% Average 30YFRM= 6.5% best 10Y ARM ever in last 6 months: 4.99% Typical CMBS loan: 6% Medium Risk Low LTV Hard Money Loan investments: 6% Higher Risk Low LTV Hard Money Loan investments: 8-10% Second Position Highest Risk LTV Hard Money Loan investments: 12% Cash Secured Loan: 2% Typical NNN/syndication rates after fees: 4-6% SVOL short volatility ETF "dividend": 17% (higher risk as NAV may go down 20% if Black Swan event occured) Typical A-Grade Corporate Investment: 4% Gov Bond rates at 17 week: 5%
I found all these rates and investment return to be very amusing Typical MF cap rate: 4% Typical NNN/syndication rates after fees: 4-6%
Not to mention money markets, easily paying 3.7%+, some FDIC insured.
Last night I was 'selling' a duplex with a master lease option.
He asked why I am selling. I said grass. Tired of taking care of it.
Then I asked why the heck he was buying. I can earn your cap rate effortlessly and risk-free. Gotta be honest!
In 2021, goverment is throwing money to us by giving 30YFRM a 2% rate. And residential market explodes. Now the goverment is throwing us money again to us, by giving 5%-7% to almost riskless cash position LOL
A CD is loaning the FED money and paying the government taxes on the return. No thanks! The beauty of real estate is all the tax deductions, plus it’s a physical asset that will always be a necessity. If you do it right, you will get a lot higher than a 7% return and have minimal effort.
so real estate in my view is the way goverment throwing us money to us via 30Y fixed rate, bank is becoming the baggage holder of public asset, so once we have fantastic return from real estate, we give it back to gov, and they give us 5%, not so bad way of doing business LOL :)