These LOCs are typically interest only and adjustable rate, which of course is planned for, again with the equity and the cash flow of the investment, it shouldnt be a problem to at the very least break even, even in the worst of scenarios.

Than maybe with adjusting the vocabulary to REALIZED performance and UNREALIZED performance, we can start correcting understandings. 

Excluding the periods of “tulip bulb” irrational exuberance, a property must produce enough of a risk adjusted return to satisfy both the ROI demands of the “limited partners”, and the income/time requirements of the sponsor.  

Your town may have just undergone a comprehensive reevaluation which adjusts the property values of the whole town.

On our recent fund when we sell off the performing notes in year 5, that will be a capital gain from the difference from the adjusted cost basis of the assets to the net sales income, but the income to our fund members from the loan payments up to that point will be ordinary income. 

Time allows for adjustments, scaling, and reinvestment in ways that short-term projects simply can’t achieve. 

Now, let's adjust structure type as that alone will get some really good focus right.

I agree that rates have naturally adjusted with the rise in the Fed rate, and it seems like the 10-14% range may become the new normal for a while.I’m curious—what’s your outlook on how this rate range will impact new investors entering the market?

I have financed a number of STR properties and they will usually be appraised as a pure real estate as vacant value and a cash flow adjusted commercial value, sometime separated as going concern and real property.  

However, if you bought it and managed it as a market rate apartment, your experience would be very different.My point is, I can control how fast a unit turns simply by adjusting my asking rents.