Three minutes before Ed Fernandez, president and CEO of 1031 Crowdfunding, speaks with GlobeSt.com, he's writing off a project.

"I walked away from a deal I was supposed to go hard on before the end of today," he says. Why? Interest rate cap costs. To make things work would have needed a whole lot more capital.

"That means you're using a tremendous amount of dry powder just to make one deal work," he continued. "At these rates, debt causes negative leverage and that hurts your cash flow." The irony was that they had the capital, but they also had investors. "You can't deploy capital that won't offer that return on the hope you'll find another deal that will make a blended rate. It's too much of a risk for us." His investors would shake their heads, point to the ability to get 4.5% to 5% from a set of bank deposits with zero risk given FDIC backup, and walk.