But I wouldn't call this rate "Cap Rate" because it doesn't capitalize anything.Another perspective I'm offering is if you could accept that Cap Rate is conceptually equivalent to Price Earnings ratio (P/E ratio) of a stock then it's easy to see that Cap Rate is not (or should not be) a measure of return because P/E ratio is never used as a measure of return of a stock investment.

I liquidated my PE firm a couple years ago, but still use my VA for my personal portfolio.There's a lot of bad apples out there within that industry, so I just would make sure to do your due-diligence until you find a VA company that really works for your business and model.

We are a PE firm out of San Francisco.

But walk with me for a minute...You can combing Private Equity PE in Non Owner Occupied deals up to 80%.

Lending is out of my realm of expertise, so learning the lending business and building deal flow would distract me from my more lucrative real estate PE business.

Most QOFs are looking for pretty standard PE returns, although with an emphasis on (tax-free) long-term capital gains instead of (taxable) operating distributions.As mentioned, you need to get a securities lawyer involved to properly set up the LLC with equity classes, write OZ language into the incorporation documents, and draft a business plan and timeline for the QOF's records. 

I acknowledge that investing in the stock market is a good plan for diversification, but I have no interest in learning about P/E ratios, guidance, technical analysis, etc.

If this is some sort of PE-type vehicle then you will probably be facing illiquidity and/or other constraints i.e. you can't sell like the normal REITs.

My buddy worked at a large RE PE shop and they had picked up 4,000 or so pads as part of a few NPL bundles from banks.

As a Catholic School Teacher of PE and Reading, we work on virtues every week, like honesty, integrity, honor, and respect and if I lost other people's money, that would kill me.