This is only the start of the article's problems. The next thing he advocates is putting 20% down on a $6.5 million apartment complex, effectively leveraging 5 to 1.
Leverage has no place in any retirement account, period!
This entire article is a recipe for disaster.
Do you have any personal experience with multifamily real estate? It's valued based on the income stream, so unless the income stream is inflated, it's not really overvalued. And increasing population + more single-member households + fewer people buying houses now = more renters. Where the hell do you think all the people losing their homes right now are going to live?
Avoidance of the kind of knee-jerk reaction that you're espousing is what makes good real estate investors incredibly wealthy.
The leverage thing I'm more willing to concede, but the numbers aren't terribly different if you just buy the property outright. And let's be honest: this isn't a true "retirement account".
Do you have a source for this? I think the number of single-member households is actually declining in most parts of the US. People move in together to reduce costs during a recession. College grads moving back in with their parents, 2 imigrant families share a 2BR apt, etc.
Depends. In general when everyone is panic selling you want to be buying. Obviously you never want to be buying crap (bad stocks, bad property, bad anything), but the panic times open up great opportunities for those with cooler heads.
Looking specifically at property many people still need places to live, but again it comes down to good versus bad. Should I invest in an apartment complex out in the middle of the desert, probably not. If I find a good deal on a complex in a city near a college, now we're talking. Rates are currently low and a lot of people are being forced into selling which makes many prices low. You can also look at the financials of a rental property and value it much easier than say a residential house. Examining a rental property is much closer to examining a business than pricing residential.
Now, the above ignores the work that goes into owning rental properties. Depending on the income level your property targets you may end up spending a full day in court every month throwing people out. Does the owner of the property have the stones to throw out a mother and her kids because they don't pay? Then you have repairs and other complaints. You can get a company to handle most of this, but that does cut into your profit.