What would you recommend for someone who wants to start something similar to a REIT, but on a much smaller scale?

Similarly, you wouldn't catch me dead try to short sale a property.

The one time I tried a similar tact (OK, well how about you giving me a loan, Mr.

Its a graph from Credit Sussie.http://bubbleinfo.squarespace.com/journal/2008/6/7/neg-am-reset-update.htmlYou can see one peak of Neg Am loans approaching by the end of this year but then a bigger peak in Oct.This is just with one company, but you can imagine the peaks are similar throughout the entire industry.Most were 3 -5 year adjustment periods.So if a good portion of these loans were done 04-07 the wrath is really just begining for foreclosures.Unless the government steps in and works out rates and reduces prinsicpals.

McDonalds and the grocery stores have something similar here . . .

Chris thanks for the info, chris i also found out that my thoughts were correct.there is no set value, the value of the property is based on what makes sense for you to achieve your investment goals (that's it).some will say to not rely on the cap rate for your purchase decision (which i agree), but to use it to compare to other similar properties that have sold in the area, which is actually not reliable because 1. there will be less comparables, 2. how properties were purchased vary from deal to deal, 3. the inner workings of most transactions are confidential.so the best way to analyze a deal (while using cap rates) is to add your financing terms into the picture (principal + interest and etc) and calculate what the deal is really worth to you.see the normal NOI/Asking price = cap rate is based on if someone were to pay all cash, this is the return they could expect first year, but paying all cash for a property doesn't happen all that often (bank funding will be use for a large portion of that cost).so i found the best way to use this formula and analyze my deals is by look at all factors but also including my financing terms with my desired return objectives into the picture to get a proper view and value to me.

., but rather compare to other similarly sized 3/2/0 properties.

There are other threads on "determining ARV" or similar topics.

If you decide to use the opportunity cost as a proxy for the discount rate, than it would make sense that a similar investment of similar risk would require a higher rate of return for the leveraged investment as well.

Lesson learned, I am moving on.I just looked at what similar places are selling for in the area.