[berettafan]

has nothing to do with poor advertised cap rates. i'm not even sure where you're seeing that? what it has to do with is cap rates that were based on pie in the sky estimates. in fact the most insideous part of these 'investments' was the hard sell which wasn't on paper. the suggestion that the x% return + value of deferring the tax + estimated increase in value of the property, when all combined, would be a home run.

many people pushing these investments KNEW better but didn't care. like securities investment firms the income is made on the churning. has nothing to do with good old fashioned value analysis. various professionals (be they attys, accountants, realtors) were given FAT commissions to bring these sheep to the slaughter.

the 'facilitators' of these deals are no more r/e gurus than i am a pro football player. you'd think they were born and raised being fans of (insert project name here) based on how highly they speak of it but the truth of the matter is they likely never even visited it or if they did it was a brief walk through.

The investment marketers started playing all kinds of games to get to the magic cap rate. occupancy figures, rents, etc. were manipulated with no concern for reality.

read my initial post. it is kinda complex but very much understandable.