This cap rate is not completely out of the realm of what things are trading at.  

I specifically want to call out one of their Senior Accounts Associate, Charlotte Cunningham, who helped me through the process on my first purchase as I needed to buy a sizable amount of furniture quickly and she was able to help me make moves quickly...and didn't make me feel bad whatsoever when I pulled back a few items at the last minute I was able to find them cheaper elsewhere.

I think you're right, it has always been a beneficial trade for both parties.I have not seen the inside yet, but the owner said he is more than welcome to show me once I have a pre-approval.

As time went on, prices came down because buyers saw the challenges with rebuilding--trade labor, insurability, not knowing what will be built on adjacent lots (like one lot where the owner built a house that looked like a concrete mushroom and that devalued the adjacent new construction homes built to more conforming architecture), and so on.The weakness with moratoriums such as these is that it is now illegal to offer less than FMV as of 1/6/25--but what was FMV on 1/6/25? 

Both offer unique advantages, but understanding the trade-offs is crucial for making the right decision.

Lates on a mortgage trade can impact your ability to get loans in the future. 

By definition, these type of loans are not the same quality as what is traded on wall street. 

It is the lowest common denominator of the construction trades.

You're trading high growth/stability for lack of cash flow.2.

Additional Info —Key Details:Location: Outside Santa Fe, NMProperty Size: 20 acres (valued at $80,000)Project: Two new STR unitsExisting Experience: Family has two fully-occupied LTRs nearby, generating $2,000/monthConstruction Approach: Self-contracted with licensed trades for electrical/plumbingCost Assumption: $80,000 per unit, plus ~20% for inflation (based on 5–8-year-old build costs)Financing: Using land equity as down payment on construction loan (expecting closing costs to be major expense)Request: Looking for feedback, potential pitfalls, and general guidance