/biz/ - Business & Finance

>>16364009
Nothing is stoping you but the general sentiment towards real estate is “it can only go up!” When that is not the case. You are essentially leveraging an insane amount of capital. So you get insane growth but you also have huge downturns

Let’s give an example 20% equity 80% debt on a 200k property

The property value rises 10% you get a 50% gain on your initial equity.

The property value drops you lose 50%

Yes I understand the difference between realized loss and unrealized but it can also never go up again. Take Detroit for an example do you think investors thought that city was every going to turn into a bigger fest? No otherwise they wouldn’t have invested so much.

When your getting a mortgage you’re essentially doing an LBO on a property. Companies take years to figure out LBO transactions. Your really just gonna purchase in a couple months because a commission hungry realtor said it was “good”?