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borrow to invest in RE fund

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  • #31
    Originally posted by PhysicianOnFIRE View Post

    And apparently, Warren created at least 7 Berkshire billionaires with 0 cash flow going to those now-billionaire shareholders. The point being that it's misguided to focus on cash flow while disregarding the metric that actually matters when investing, which is total return.
    Agree total return is the measure.
    $1B shareholders are different than $1B appreciation.

    The easiest way to become a billionaire seems to be to sell a business for $1B. Maybe I misread the article.
    The last 10 years have been below the S&P 500.

    ”The climb hasn’t always been smooth. Berkshire shares were punished in the wake of the 2008 financial crisis, and the stock has returned less than the S&P 500 Index over the past decade. But investors sticking around since 1964 have seen a staggering gain of 2,472,627 percent, or roughly 165 times more than the benchmark. A $10,000 investment 55 years ago would be worth more than $170 million today.”

    55 years is a long period to wait. Just saying, any RE project has a development stage and needs to start cash flowing or there is likely going to be significant problems. These funds aren’t the next BRK by any stretch.

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    • #32
      I'm invested in the fund. It has earned 12% in the last 12 months but the year before that was not nearly as good. There is already leverage in the fund so you are adding additional leverage.

      My recollection is you could invest with only $100K. Maybe it would be easier for you to swing that and add more later. It's an evergreen fund after all.
      Helping those who wear the white coat get a fair shake on Wall Street since 2011

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