Sax32 wrote: ↑Thu Feb 09, 2023 8:53 am
NiceUnparticularMan wrote: ↑Wed Feb 08, 2023 2:57 pm
Sax32 wrote: ↑Wed Feb 08, 2023 2:32 pm
25% dp on a duplex is not sufficiently leveraged, it's a lot more conservative then someone who puts down nothing, 3% or 5%.
Well, 4X leverage is still 4X leverage, even if it is less than 20X or 33X.
But since most residential real estate did well between 2014 and 2022, it is not surprising it worked out for you.
Of course if you had done 4X leveraged investments in S&P 500 over that time, then those would once again be way ahead (unless you have omitted more from your story).
Generally, ultimately once you introduce leverage, you have to try to figure out what returns look like normalized to the same level of risk.
How many times have you invested in real estate?
Passively through REITs, many times. As a direct investor and landlord, twice. Neither time did I enjoy it, and each time it only made sense due to certain specific circumstances, such that as soon as practicable I exited the "business".
I've been in the biz for 10 years and recently sold all my properties because of the inflated prices and made a killing.
You seem to be under the impression I am denying that story.
Here is Case-Shiller's national repeat sales index, seasonally and inflation adjusted, over that period:
It does not in any way surprise me that people who invested in residential real estate over that period with leverage did well.
Of course here is the full Case-Shiller series:
Obviously not all periods have been as good as the period you referenced, and being leveraged in other periods would have meant (and in fact did mean) many people doing particularly poorly.
No I didn't walk dumbfounded into an investment property and got lucky, I was just very good at what I did.
I'm not going to try to persuade you differently.
But I will observe that if you had decided to try this out in, say, 2006 instead of 2012, it would have been a lot harder to do well.
Now, part of what you may be claiming is you would not have done this in 2006 but did do it in 2012 because you have the ability to predict the future of house price trends over 10 year periods.
And maybe you do! I certainly have no way of proving you don't.
Unfortunately for me, I do not have that power.
I mean talk about a good strategy I made with all of my sweat equity.
Obviously sweat equity is not costless, but again it is a lot easier for sweat equity to generate positive returns when markets are generally going up.