June 10, 2024 | Leveraged Gambling Ends Badly, as Usual

The lure of easy money delivers time-worn outcomes, once again. See how Real estate investors are wiped out in bets fuelled by Wall Street loans:

Lynn Nathe was growing tired of the meager gains from her family’s retirement account. In late 2021, she invested $200,000 with a company that was making 30% returns by buying the hottest ticket in global real estate: US apartments.

Now, she says, most of that money is gone.

For Nathe, a business school graduate who invested earnings from her husband’s dentistry practice in Yakima, Washington, the loss is a personal calamity. Yet the story of her ill-timed bet — and the collision of social-media fueled investing, Wall Street’s securitization machine and sharply higher interest rates — also shows how FOMO and easy money once again combined to burst an American real estate bubble.

Hmmm…you don’t say:

“When you’re at a casino, you know what you’re doing is gambling,” said Aleksey Chernobelskiy, whose firm, Centrio Capital Partners, runs a service helping retail investors salvage their investments in multifamily deals. “Here, people were gambling but they didn’t know it.”

Danielle Park June 10th, 2024

Posted In: Juggling Dynamite

Next: Enjoy The Moment »