I didn't read the whole thread, but valuing investment property you intend to derive income from based solely on exit comparables is ludicrous.

Also, I need to understand how basis points are derived.

They should not expect to derive (too much) current benefit from their stock portfolio.

The reality is that Washington State recognizes the legal owner of real estate as the party who is lawfully entitled to all rents derived from that real estate. 

From there, I've worked in accounting for various investments including securities lending, loans, derivatives, bank debt, corp bonds, long/short equities, etc.

Folks using 2008 as a mirror of what can /did happen is a mistake.Mainly because 2008 crash was from massive amount of bad mortgage loans/fraud that shook the foundations of huge wall street banks that had bad investments i.e. mortgage /insurance Derivatives on such loans around the world it spread like the flu of 1918 around the world.I just don’t see the real-estate getting slammed like that again the loans on the books mostly are solid loans.Still a great demand for homes here below 300k, builders not keeping up or not wanting to keep up?

I am a big proponent of having your income derive from mulitple sources, and the stock market/muni bonds being a strong piece. 

You can still have flat prices with tight inventory if people don't derive the same satisfaction and have other alternatives.Inflation is the erosion of purchasing power of a currency (mostly due to excess dollars in circulation like in Venezuela as the government keeps printing).

.- Insurance companies also pay a dividend, but how they derive it is totally opaque.

In effect, they derive from ordinary deductions.You generally can't offset ordinary deductions against capital gains and you actually generally prefer not to.