@Jeffrey AlmonteWhen using leverage with an IRA, Roth or Traditional, your IRA may owe UBIT as a result of generating UDFI, which is a form of UBTI.Those terms get used interchangeably, but do have distinct meanings.UBIT = Unrelated Business Income Tax: This refers to actual IRA tax liability; the amount that it owes to the IRS, based on compressed trust tax rates.UBTI = Unrelated Business Taxable Income: This is the type of income that generates UBIT liability.UDFI = Unrelated Debt Financed Income: This is subset of UBTI.A leveraged real estate deal may-or-may-not generate UDFI.

2X over 5 years, 2.5X over 7 years, 3X over 10 years is a pretty common projected return.IRR and cash on cash return (by year) are also great metrics to look at.That being said, you want to make sure that the proforma is conservative and that they are not banking on cap rate compression on the exit.

I decided that compressing the learning curve to a few months was worthwhile, as opposed to just learning lessons myself the hard way over a few years. 

Cash flow is still possible with STRs, but it is a lot more compressed.  

Also what could happen is we buy all cash now at higher cap rate and then sell with cap rate compression when interest rates hopefully fall by a good amount again.Otherwise just keep holding that dirt in the strong area will typically keep going up in value.As for 8 pref those are theoretical investments.

Especially these last few years with interest rates being so low for so long, every decent asset class has seen cap rate compression for several years.

However, cap rates compressed a lot in the last 3-4 years and I think that the pendulum should swing to the other direction in the next 5 years.

Lakewood and Cleveland vacancy rates are greatly compressed and there is still pent up demand. 

Cap rate compression (cap rates well below historical norms) adds a risk factor  many do not understand.

How much do rents typically compress and how wide will cap rates get before you want to start deploying capital in the east bay?