Debt Free
Does anyone know any players in RE that do not use debt? I know people who flip houses and small buildings with all cash but the ‘flip’ aspect makes it unscalable.
I’ve read that the guy who founded solil management in NYC wasn’t using any debt or very little and accumulated +600 properties in NYC. Granted it was the 70’s and he was probably the only buyer but it’s impressive and honorable.
I found and own in a niche rental market that doesn’t need debt but it’s tempting considering what it’ll do to the returns. I just can’t stand dealing with banks and being beholden to them.
Given interest on debt payment is less than inflation in RE assets - answer is no.
Rates track the 10 year? So it’s not necessary less. Maybe today it is but banks don’t lend with the expectation that inflation is going to run higher than their rates for an extended period of time.
Yes. Many of the Life Companies purchase all equity for their General Account.
I'm sure there are groups who do it but generally speaking the ability to use high amounts of leverage relative to other asset classes is one of the main characteristics that makes real estate attractive and unique.
We have a JV with Morgan Stanley Prime Property and it’s an unleveraged private reit deploying across asset classes
Morgan Stanley uses 100% equity with our deals. They're one of our LP's at my firm.
Many REITs do not use leverage - believe Prologis was one name doing so.
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