Muting this twetepic.twitter.com/egrOT7IMoe
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Conflating a lot of concepts here, not really comparable as stated. Most stock equities already leveraged at corporate level. Margin call forces sale of securities that one has offered as collateral (to avoid add’l personal recourse) Can definitely use recourse on RE as well.
If stock equities are already leveraged at corporate level it doesn’t make sense to compare 20 PE to 5% cap rates because cap rates don’t include interest rate payment expensing like stock earnings do. Anyways, even if I was wrong about financial contagion, I still believe that
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Thé nature of leverage in real estate is better than that of equities because you’re not going to get margin called in RE. So there are plusses and minuses for each but it seems to me you can turbocharge your wealth faster with the RE.
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Get margin called pretty quick if your cash flow doesn’t cover debt service
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