@multifamjunk It’s a way better way to diversify risk and compete on returns. The higher entry points may create friction. I believe more beginners need to work with partners/small groups for the best outcome.
It’s amazing how easy it is to build with AI. I was working on an idea to make real estate investing more fun and built out a demo.
Concept is to allow ownership to back a trading card collectible. Open packs to allocate automatically and returns would build to allow you to keep collecting.
Try the link below and let me know what you think.
The illiquidity premium is a strong adder to returns that many investors forgo in public equities. If your retirement/ long term savings are not needed today you should be searching for that premium
Most individuals hold all their savings in public stocks, arguably the most competitive arena available. Private investments introduce return sources that market lacks. Yet the premium is not guaranteed; it accrues to investors with genuine access and an advantage, after fees.
Historically ~300bps (35-yr avg 3.2%), so ~8% caps at a 5% 10Y. You can justify ~150–200bps only if you underwrite real NOI growth, since cap rate + growth is the true comparison. Today's ~120bps means buyers are betting on falling rates, not getting paid for illiquidity.
With a 10-year US Treasury at 5%, what spread do you need on cap rates for core real estate to make them attractive purchases?
The first being truly passive and the second bringing risk and illiquidity.