The risk is compounded when the RE investor is making bad assumptions as to what is really going on.On the more general topic...What you are ignoring is the risk to the credit partner.

His latest book focuses more on the impact of compounding and the private paper investment opportunities.

An investor who chronically makes these mistakes will not long be an investor.The common mistakes made by experienced investors are a bit more subtle, but are perhaps even more damaging because over time the costs are compounded until the entire portfolio is affected.1.

I've always knew about this but never bothered to think of the tax free return compound growth.

My previous comment was meant to introduce reality, much like taking a 30.06 into the woods during bow season for deer, you aren't hunting rabbits or tree rats, so what are you up to?

So he enjoys the benefits of compounding during that period, and using DCF in example #2 is appropriate (at least according to this line of thinking).

Have a contract on a house, was appraised at 177k, offer was accepted at 140k, signed as is but has foundation issue on one bowing wall and mortgage company is wanting a certification from foundation inspector.

The $5 you spend on a latte is probably going to cost you 10, 15, or 20+ dollars over the decades considering that your money could have experienced growth in your asset column thanks to appreciation and a compounding affect. 

The good news is that deer season starts in Oct. with bow and turkey season ends in March here.

I'm going out on a limb here with an assumption but if he owned all 16 units there would probably be a 100% rental rate in the compound.