IRR used this way, which is very common in PE funds, is not very favorable to you in this circumstance since you are putting up about half the capital.

It's because so many chains have been purchased by private equity firms in recent years, and PE firms have overloaded them with debt.  

It seems to me that the returns in the stock market for the next few years could underperform, as is historically true at the current P/E."

We've lived in here in San Diego with PE companies buying up places like Active Network and literally moving the HQ to Dallas. 

Not surprising.Large PE firms are already ‘flipping” although they like to call it ‘when we see an asset that only needs a small equity injection of 20 thousand or less that we can sell for a high profit then we do it.’

Although with the properties I have now, my cash on cash return is about 14%, since my anticipated 10 year stock market returns are miserable because the Shuiller PE ratio is so high, this looks especially good.  

I looked at household income and home cost and did a ratio, like a P/E.

Remember in PE it goes up and then it goes way down.  

Yes, in most markets if you apply a standard finance metric like the p/e ratio, the returns don't make sense to invest. 

It gives you a lot of construction knowledge, the PE is more or less a paper pusher (think review submittals, some buy out of subs, create RFIs, update documents, work on change orders, etc.).