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Started By
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Inverse Real Estate Investment Trust (REIT)
Posted on 5/14/21 at 8:27 am
Posted on 5/14/21 at 8:27 am
I'm starting to look at getting some exposure to the Real Estate Bubble. Some homes in the Bay area in SF are going for $1 Million OVER asking price. Also with Lumber shortages and build prices going through the roof along with the Fed potentially having to raise rates in the future, I see this bubble bursting.
DRV is the 3x Leveraged Inverse REIT so thinking of going with that one.
Thoughts?
DRV is the 3x Leveraged Inverse REIT so thinking of going with that one.
Thoughts?
This post was edited on 5/14/21 at 8:28 am
10
Posted on 5/14/21 at 8:31 am to LSUStjames
I'm not a fan of leveraged ETFs because the leverage is applied on a daily basis. And you might be early with your timing.
Posted on 5/14/21 at 8:51 am to LSUStjames
If rates rise, isn't real estate investment one of the safest plays? What exactly is DRV shorting? Housing prices or commercial REITs?
And echoing what Powerman said. Inversed ETFs are made to go to 0. If you're early, you're going to get smoked. They aren't for long term holding.
And echoing what Powerman said. Inversed ETFs are made to go to 0. If you're early, you're going to get smoked. They aren't for long term holding.
Posted on 5/14/21 at 9:09 am to LSUStjames
Inverse leveraged funds are unfortunately a lesson that is often only learned from experience. My experience is if you hold for any length of time beyond a day or two you are setting yourself up for failure. I won’t try to talk you out of it and I hope you have success.
Posted on 5/14/21 at 9:13 am to JimMorrison
It depends on what side of the trade you're on. MSR goes up, short mortgage - bad, long mortgage - good, valuation down depending on market.
Posted on 5/14/21 at 9:49 am to LSUStjames
quote:
Thoughts?
Seems like gambling.
Some people win. Some people lose. The people running the fund will make money no matter what.
Posted on 5/14/21 at 11:00 pm to LSUStjames
Not thoughts - real life for me - I got in too early on one of these and lost my arse.
If you do this, treat it as a gamble and be willing to walk away with zero.
If you do this, treat it as a gamble and be willing to walk away with zero.
Posted on 5/14/21 at 11:15 pm to LSUStjames
REK SRS and DRV are the 3. I'd rather short a company and not the overall market when it comes to RE
Posted on 5/15/21 at 12:18 am to hiltacular
After reading this, I’ll just watch from the sidelines until it starts to move and jump in late if it looks like a good play. I may just look at some of the national home builders instead as it seems safer
This post was edited on 5/15/21 at 12:19 am
Posted on 5/15/21 at 10:37 am to LSUStjames
You are probably right, but you can be right on the thought and wrong on the timing and be absolutely crushed.
It is 100% an educated gamble.
It is 100% an educated gamble.
Posted on 5/16/21 at 12:21 pm to LSUStjames
Seems like the bubble has a long way to go
Posted on 5/16/21 at 1:29 pm to LSUStjames
You should buy puts or sell call spreads, imo. On an individual name is best. Options are a much more efficient way of doing this than the inverse ETFs.
Posted on 5/16/21 at 2:00 pm to LSUStjames
(no message)
This post was edited on 5/16/21 at 2:01 pm
Posted on 5/17/21 at 7:20 am to LSUtoOmaha
this was sort of my plan. I was looking at buying long dated calls or leaps on the inverse REITs or Puts on the standard REITs. As said previously in this thread, I may switch over and short/buy puts against the national home builders as I think they feel the burst more sharply than the rest of the economy.
This post was edited on 5/17/21 at 7:22 am
Posted on 5/17/21 at 7:57 pm to LSUStjames
Nice plan. Depending on leverage and potential decay with the inverse REIT fund, puts on the standard REITs may be a better option. Or just sell Out of the Money call spreads, that way you can make money without theta decay (time isn't against you). Also, by selling OTM call spreads, you win the trade even if the REIT is flat.
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