The Chase for Double-Digit Returns

Many investors are obsessed with chasing deals that project double-digit returns. 16%, 18%, 23%—anything is exciting as long as it isn’t a “boring” single-digit.

But too often, that chase comes with over-optimism and blind spots about risk.

Think about it: the very same investors willing to run around the world for that coveted double-digit IRR could find it right under their nose—high-yield bonds. They trade daily, they’re liquid, they’re accessible. So why not just buy them?

Simple. When it comes to bonds, people intuitively understand that high yield means high risk. Junk bonds are called junk for a reason.

Yet with real estate or private deals, that logic sometimes disappears. Suddenly everyone’s a hero, and double-digit projections are treated as a given.

The reality: double-digit returns usually mean developer-level risk. That doesn’t make the deal bad—but it does mean it’s not automatic.

If there really were safe double-digit returns lying around, they’d get bid down fast. More investors would pile in, prices would rise, and returns would compress… right back to those “boring” single digits.

Bottom line: if you’re prepared to take the risk, chase the double-digit. If you want something solid, stick with single-digit.

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