traderdad– I’m reluctant to post this, but the reason one invests in real estate is because of the leverage potential of investing an amount of money that is less than the value of the property itself. In other words, gains are a percentage of the value of the property, not the amount of your investment. Only when you buy outright, are the gains the same.
Levers work both ways though and the effect in the other direction can be fairly devastating. In this way, real estate is different from “simple” investments like money market funds in that you can easily lose money beyond your original investment.
