I have a close friend who runs a fund that does exactly what you are discussing, and I have no money in it despite his stellar track record. A rising tide lifts all the boats and a receding tide lowers them. The up cycle in RE is over for now, it is too late, the easy money has been made. I for one think it is time to have money elsewhere for a few years. RE’s time will come again in the future. Chasing RE in places that have not risen much is like buying stocks in 2000 that had not dropped as much as the biggies, ultimately they all got dragged down.
This asset class is not the best place to have $$ right now, it is really that simple to me. Sorry for the bluntness. I would not risk tying up money in Austin, TX for example, in an illiquid asset just so that I could make 5% per year in it if everything goes great. You need the perfect storm for a T-Bill rate of return, and it makes no sense to me.
Just my opinion – no interest and I have a prime easy way into this arena (mortgages) if I wanted in.
