Let me ask you a question. Why did the real estate developers change from the traditional entity investment model to the highly leveraged financial model?

The profit rate is reduced, the land cost is doubled and the competition is fierce.

There are more and more signs that China real estate "has entered the second half of the spring tide". How to maintain speed in this context has become the primary problem faced by many housing enterprises. "Less than 5% capital investment, share more than 40% project income", the development model of real estate operation+real estate fund in tishman speyer, USA.

The "instability" of leverage comes from the risk of the business itself and the greed of people. In essence, leverage is an image statement, that is, using non-owned funds to "incite" investments that cannot be completed by self-owned funds alone. The "use of non-owned funds" here includes debt financing such as borrowing and equity financing.