> Finding investors willing to take less than 5% return

If it’s safe I can leverage it.

> get on a 10 or 30 year federal bond with more risk associated with it

5% is 10 bps over the 20 year. Not a lot. But I picked a round number. Point is why couldn’t it be undercut? If it can’t, easily, it’s correctly priced.

> If it’s safe I can leverage it.

Loans to private persons are very unsafe, for example they can move abroad and just stop paying as the article is talking about. Every person doing that raises interest for everyone else.