Real estate would be infinitely easier if those pro-forma spreadsheets always translated to reality.

It makes sense that the riskier you get as you approach non-performing notes, the wider the spreads will be, but even on relatively "safe" performing notes (first position, big equity, high FICO, well-seasoned payment history, etc.) my required returns are 50-100 bps above the offer price, which translates to 4-9% below ask (aka thousands of dollars).

This translates in my head as "How crummy of a tenant are you willing to take?"  

Since I live in Europe I'd like to ask how this creative investing game translates in the European market and are there any active investors from Europe here.

@Sharon Jones A family member could translate but I can't rely on that.

Always remember to translate the terms to your deal to see what the expected financing costs will be.  

BPers from their areas can chime in to verify but I read that the going cap rates in LA, NYC, and San Francisco are something like 2-3%, which would translate to the 0.2% rule/test!

I don't care what you're buying, when your cost of capital (They also give him 75% LTV) is 1.85%, almost any going in cap rate is gonna translate into an incredible return over a 2-5 year horizon.

@James Leos you wrote:rate will be about 4 points on top of the adjustable rate LOC I have (which is based on LIBOR or the equivalent U.S. benchmark)So, no, I don't think that translates into LIBOR + 4%. 

I had set it up assuming 80% primary loan with a 10% seller carry, which would translate to $262k in annual debt service on 30 year loans.