To fairly compare with the stock market, you’d have to leverage stock market return by the same amount.
1 Like
Just to be clear, after the purchase the bank revalued it at 1.2m. He was able to snatch such a good price because the owner died and the heirs wanted to sell it fast. I’m still puzzled as to why would people sell for less in such a supply constrained market.
Yes and no. If you leverage stocks by 5:1, a 20% drop will liquidate you. And you won’t get a good interest rate. It’s just not realistic to do the same thing with stocks as with real estate.
Maybe heirs are quite rich themselves and don’t care 
There are always bargains and anomalies. I know of a few cases where sold at under market value.
A friend of mine bought such a house, it was owned by a guy who had received social benefit, so any profit he made on the sale would have to be given to the gemeinde. So to stick the middle finger to them, he reduced the price to whatever value created no gain, since he’d receive none of the gain anyway.
4 Likes