Cash vs loan, what is most efficient for faster growth
Patrick P.Pro Member
Member since 2021 · 1 post · 2 votesCash vs loan, what is most efficient for faster growth
Most Popular Reply
Joe VilleneuvePro Member
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesThis is a very simple math problem, and REI is really nothing but math with $$$ in front (NOT %%% behind).
Loans, loans and loans.
The actual cost to a REI for every property they buy, is only the cash they spend on that property. The debt isn't a cost to the REI since the tenant is covering it. Profits, like in any business, is only achieved after all costs are recovered.
So, the smaller the amount of cash spent on any property, means the cost of that property is less.
Example 1: $100k property
1 - Buy all cash; Cost to REI = $100k
2 - Buy 20% DP; Cost to REI = $20k
Note that the CF on the property with no debt may "appear" to be better, it is in fact NOT. Remember, how much income you get isn't important. What's important is what you keep.
Example 2: Same $100k property. CF with no debt = $10k/year; with debt = $5k/year
1 - All cash buy = $100k cost to REI; Time to recovery of cost (and start of profit) = $10 years. Total PV = $100k
2 - 20% DP buy = $20k cost to REI; Time to recovery of cost = 4 years; profit after 10 years = $30k. Total PV = $100k
What if both REI started with the same $100k in cash?
Example 3:
1 - All cash buy is the same as it is in Example 2. Total PV = $100k
2 - 20% DP can do 5 times what they did in Example 2; Recovery of cost is the same as in E #2; Profit after 10 years = $150k. Total PV = $500k
Note that appreciation applies to PV, so the REI buying with debt, starts out with 5 times the total PV, and will appreciate (at the start) 5 times greater than the all cash buyer...and, that increase grows exponentially from that point forward.
29 Replies
- Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes4y
@Patrick Power don’t have time for a longer text but one thing that will pay “dividends” is targeting a couple of banks that do real estate for the holding of any cash liquidity say 250k in an account. Then talk to the senior commercial real estate person about ongoing loan relationships for real estate loans. You’ll be glad you did
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes4y
Leverage will help a poor man get rich and a rich man go poor
- 4yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
This is a very simple math problem, and REI is really nothing but math with $$$ in front (NOT %%% behind).
Loans, loans and loans.
The actual cost to a REI for every property they buy, is only the cash they spend on that property. The debt isn't a cost to the REI since the tenant is covering it. Profits, like in any business, is only achieved after all costs are recovered.
So, the smaller the amount of cash spent on any property, means the cost of that property is less.
Example 1: $100k property
1 - Buy all cash; Cost to REI = $100k
2 - Buy 20% DP; Cost to REI = $20kNote that the CF on the property with no debt may "appear" to be better, it is in fact NOT. Remember, how much income you get isn't important. What's important is what you keep.
Example 2: Same $100k property. CF with no debt = $10k/year; with debt = $5k/year
1 - All cash buy = $100k cost to REI; Time to recovery of cost (and start of profit) = $10 years. Total PV = $100k
2 - 20% DP buy = $20k cost to REI; Time to recovery of cost = 4 years; profit after 10 years = $30k. Total PV = $100kWhat if both REI started with the same $100k in cash?
Example 3:
1 - All cash buy is the same as it is in Example 2. Total PV = $100k
2 - 20% DP can do 5 times what they did in Example 2; Recovery of cost is the same as in E #2; Profit after 10 years = $150k. Total PV = $500kNote that appreciation applies to PV, so the REI buying with debt, starts out with 5 times the total PV, and will appreciate (at the start) 5 times greater than the all cash buyer...and, that increase grows exponentially from that point forward.
- 4yJoshua MessingerBusiness MemberProperty Manager · Poconos, PA · Member since 2020 · 443 posts · 264 votes
Hey @Patrick P.!
@Joe Villeneuve really blessed us with some wisdom on this one. "Remember, how much income you get isn't important. What's most important is what you keep."
So far based on my experience with helping investors using cash for deals vs traditional conventional financing methods, either type of route could play a huge role in different scenarios. If you are facing a lot of competition on a deal and there is a highest and best scenario for a deal then I would recommend going the cash route. But, if you are looking to get a deal and there is no other competition on it I would recommend working with leverage so you don't have too much capital going into the one deal and can get more.
If you have any more questions please don't hesitate to reach out!
All the best,
Josh
- 4yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesNot completely accurate.
Quote from @Joshua Messinger:
Hey @Patrick P.!
@Joe Villeneuve really blessed us with some wisdom on this one. "Remember, how much income you get isn't important. What's most important is what you keep."
So far based on my experience with helping investors using cash for deals vs traditional conventional financing methods, either type of route could play a huge role in different scenarios. If you are facing a lot of competition on a deal and there is a highest and best scenario for a deal then I would recommend going the cash route. But, if you are looking to get a deal and there is no other competition on it I would recommend working with leverage so you don't have too much capital going into the one deal and can get more.
If you have any more questions please don't hesitate to reach out!
All the best,
Josh
In your comment, you need to replace the word "deal" with the word "property". The goal is to collect "deals" not "properties". Paying all cash might get you a "property", but the "deal" disappears. See the math in my first comment. - Lender · Boca Raton, FL · Member since 2014 · 250 posts · 133 votes4y
I would use a conservatives amount of leverage but be be careful and dont do to much to fast. Take it nice and slow
- Rental Property Investor · Carthage, NY · Member since 2019 · 72 posts · 47 votes4y
About 60% leverage seems to be the optimal consensus of investors I confer with. This uses leverage a key benefit of real estate investing, while leaving room for any market downturn or unanticipated stumbling blocks. My own concern, not having self managed more than $1M or 15 units at a time in real estate; would be my own or another person's experience if they havent invested in real estate before, and scaling capabilities in things such as human resource management to consider going too big too fast.
- 4yNick ZupecPro MemberInvestor · Saint Joseph, MI · Member since 2022 · 31 posts · 44 votes
I agree with most of the comments above about the math favoring getting mortgages and increasing your leverage. This will allow you to buy more properties faster which will speed up the scaling process. This is especially important if you are buying in markets with a lot of appreciation as you will benefit from that appreciation across multiple properties. The obvious counterpoint is not to get overleveraged. Since you have a large sum of cash up front, I would set some of it aside as reserves. That way if you have a non-paying tenant that causes damage and needs an eviction, you don't have any concerns handling that and paying the mortgage. Also, you can still buy properties with "cash offers" and get a mortgage as long as you have the funds and waive your financing contingency. Good luck!
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes4y
There's no comparison; you will get further faster with leverage than with cash. I started out all cash and I missed out on a lot of deals waiting to save up my next all cash deal.
Skyline Properties - Real Estate Agent · Saint Paul, MN · Member since 2019 · 10 posts · 8 votes4y
Agree with several of the people within the forum– look into analyzing each deal individually to see if it is smartest to come in with cash or if financing make sense. It also all comes down to what your individual real estate goals are (Ex. if you are looking to maximize your cash flow as soon as possible or if you are buying properties you plan to hold over the next 20-30 years and wait for some appreciation and do not care as much about the immediate cash flow).
Additionally, beyond the cash vs. financing question it is about deciding what type of real estate investment strategy or type you are most interested in based upon your personal interests and goals (long term buy and holds, fix and flips, short term rentals/Airbnbs) etc. to ensure not only are you prepared for the cash needed but preparing for putting the systems in place for maximum growth!
Generally speaking, your biggest return can come from using leverage to buy the asset and having your rental income from the tenants paying down the loan instead of needing to use your own cash. Who doesn’t love having somebody else pay down equity of an asset that you own?! This would enable you to have your cash go 3x 5x 10x farther than paying cash for each deal.
You mentioned how to assess rental values for a property - I use a software called rent-o-meter that pulls data from a variety of sources to assess what the rent could look like for different types of property. You can also check popular rental websites (Zillow, Apartments.com etc.) and observe what other similar properties are listed for.
Please don’t hesitate to each out - happy to help with any deal analysis or chatting through any investment strategies as a local investor/realtor myself!
- Member since 2022 · 1 post · 1 vote4y
Hey Congrats on the sale!!! That is a huge win!! I will have to take you out for a beer on the sale!
Very impressive!
Roy
- Rental Property Investor · Los Angeles · Member since 2018 · 844 posts · 1k+ votes4y
Quote from @Patrick P.:
I am soon going to receive a decently large cash sum (~3 Mil USD) from a company buy-out in a tech company. There are a lot of ways in my head that I have thought about investing this in real-estate.
Is it more efficient to buy the houses in cash, and then use that rental income to take out additional mortgage, or would it make more sense to pay 15-20%, may a mortgage, but then buy more asset.
One thing to note, is I carry a mortgage on my primary residence of $248,000, but have a stupid low rate on it (1.875% ARM 7/1 that is only in year 1) and I just closed on a flip/remodel that I will have a $325,000 mortgage on that I intend to flip within 4 months.
I am very new to this, so any tips/tricks on Tax assistance, and how to assess what a property would rent for, would be of great assistance.
Leverage will magnify whatever direction you are going.....whether that is building up and growing or if that is bleeding money and losing properties. As such, arm yourself with as much knowledge as you can, not only from BP but also from other sites. You've gone beyond being an accredited investor. You're now a qualified client and there are investment forums out there where folks like you discuss deals. Spend at least 6 months learning as much as you can before pulling the trigger on any deal...regardless of whether or not that is a private syndication or direct ownership.
- Lender · Kansas City, MO · Member since 2016 · 141 posts · 71 votes4y
Quote from @Patrick P.:
I am soon going to receive a decently large cash sum (~3 Mil USD) from a company buy-out in a tech company. There are a lot of ways in my head that I have thought about investing this in real-estate.
Is it more efficient to buy the houses in cash, and then use that rental income to take out additional mortgage, or would it make more sense to pay 15-20%, may a mortgage, but then buy more asset.
One thing to note, is I carry a mortgage on my primary residence of $248,000, but have a stupid low rate on it (1.875% ARM 7/1 that is only in year 1) and I just closed on a flip/remodel that I will have a $325,000 mortgage on that I intend to flip within 4 months.
I am very new to this, so any tips/tricks on Tax assistance, and how to assess what a property would rent for, would be of great assistance.
You are in a position where you should pay 100s or 1000s which is a drop in the bucket for yourself for professional tax advice. The tax benefits of real estate largely seem to be ignored here on BP because most people who need those benefits are high income earners or high net worth individuals which YOU are and 99% of people on this forum are not. Lots more to real estate than just cash flow at your level. If you could buy enough property without any leverage (so in cash) to create enough cashflow to pay for your living expenses that may be my advice. That would be super low headache and allow you to work full time in whatever is your passion which may be your current tech job. Really for anything of substance you need to elaborate more.
As for your question there is not even a debate if you want to grow and expand your portfolio significantly. Leverage is always the option. Buy with 20-30% down to limit risk and don't leverage more than that. If whatever you buy cashflows with margin for repairs/capex saved up who cares if some call it risky to leverage.
- Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes4y
We buy all our properties in cash. We make enough money to do so.
We are not in a rush to get as many propwrties as possible. Our priority is having fun doing this.
Then when we rehab it put a tenant in it and we refinance the money back, we get more out than what we put in, and we do it all over again.
When dealing with loans, the way I see it, I don't care about what I physically have left or not after the deal... what I look at is that in the long run I spend more money in fees and stress dealing with loans..
Remember, profits is not just money. It is also stress. See it this way, you spend money for a massage right? for vacation and meds for stress... by eliminating lal that, that is money you don't have to spend just because you didn't have to spend a little bit more in the beginning.
This goes against what Joe mentioned and I know he is way more of an expert than I am so my logic may be flawed, but regardless, that is my logic on it and it works for me.
- Lender · Kansas City, MO · Member since 2016 · 141 posts · 71 votes4y
Quote from @Jerryll Noorden:
We buy all our properties in cash. We make enough money to do so.
We are not in a rush to get as many propwrties as possible. Our priority is having fun doing this.
Then when we rehab it put a tenant in it and we refinance the money back, we get more out than what we put in, and we do it all over again.
When dealing with loans, the way I see it, I don't care about what I physically have left or not after the deal... what I look at is that in the long run I spend more money in fees and stress dealing with loans..
Remember, profits is not just money. It is also stress. See it this way, you spend money for a massage right? for vacation and meds for stress... by eliminating lal that, that is money you don't have to spend just because you didn't have to spend a little bit more in the beginning.
This goes against what Joe mentioned and I know he is way more of an expert than I am so my logic may be flawed, but regardless, that is my logic on it and it works for me.
As a lender surprisingly I agree with this you can always acquire with cash if you have the capital (which most people don't) and then get that cash back in the form of a cash-out refinance at an opportune time. For people like you Jeryll who have a high active income I believe this is ideal. Super insightful response
- Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes4y
Quote from @Jacob Trogan:
Quote from @Jerryll Noorden:
We buy all our properties in cash. We make enough money to do so.
We are not in a rush to get as many propwrties as possible. Our priority is having fun doing this.
Then when we rehab it put a tenant in it and we refinance the money back, we get more out than what we put in, and we do it all over again.
When dealing with loans, the way I see it, I don't care about what I physically have left or not after the deal... what I look at is that in the long run I spend more money in fees and stress dealing with loans..
Remember, profits is not just money. It is also stress. See it this way, you spend money for a massage right? for vacation and meds for stress... by eliminating lal that, that is money you don't have to spend just because you didn't have to spend a little bit more in the beginning.
This goes against what Joe mentioned and I know he is way more of an expert than I am so my logic may be flawed, but regardless, that is my logic on it and it works for me.
As a lender surprisingly I agree with this you can always acquire with cash if you have the capital (which most people don't) and then get that cash back in the form of a cash-out refinance at an opportune time. For people like you Jeryll who have a high active income I believe this is ideal. Super insightful response
Whooo hooo i got one right!!!!
Thank you my sharp looking dude!
- 4yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesThere are so many mathematical contradictions here I wouldn't know where to begin
Quote from @Jerryll Noorden:
We buy all our properties in cash. We make enough money to do so.
We are not in a rush to get as many propwrties as possible. Our priority is having fun doing this.
Then when we rehab it put a tenant in it and we refinance the money back, we get more out than what we put in, and we do it all over again.
When dealing with loans, the way I see it, I don't care about what I physically have left or not after the deal... what I look at is that in the long run I spend more money in fees and stress dealing with loans..
Remember, profits is not just money. It is also stress. See it this way, you spend money for a massage right? for vacation and meds for stress... by eliminating lal that, that is money you don't have to spend just because you didn't have to spend a little bit more in the beginning.
This goes against what Joe mentioned and I know he is way more of an expert than I am so my logic may be flawed, but regardless, that is my logic on it and it works for me.
- 4yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votesDo you understand what risk is in the case of REI properties?
Quote from @Jacob Trogan:
Quote from @Patrick P.:
I am soon going to receive a decently large cash sum (~3 Mil USD) from a company buy-out in a tech company. There are a lot of ways in my head that I have thought about investing this in real-estate.
Is it more efficient to buy the houses in cash, and then use that rental income to take out additional mortgage, or would it make more sense to pay 15-20%, may a mortgage, but then buy more asset.
One thing to note, is I carry a mortgage on my primary residence of $248,000, but have a stupid low rate on it (1.875% ARM 7/1 that is only in year 1) and I just closed on a flip/remodel that I will have a $325,000 mortgage on that I intend to flip within 4 months.
I am very new to this, so any tips/tricks on Tax assistance, and how to assess what a property would rent for, would be of great assistance.
You are in a position where you should pay 100s or 1000s which is a drop in the bucket for yourself for professional tax advice. The tax benefits of real estate largely seem to be ignored here on BP because most people who need those benefits are high income earners or high net worth individuals which YOU are and 99% of people on this forum are not. Lots more to real estate than just cash flow at your level. If you could buy enough property without any leverage (so in cash) to create enough cashflow to pay for your living expenses that may be my advice. That would be super low headache and allow you to work full time in whatever is your passion which may be your current tech job. Really for anything of substance you need to elaborate more.
As for your question there is not even a debate if you want to grow and expand your portfolio significantly. Leverage is always the option. Buy with 20-30% down to limit risk and don't leverage more than that. If whatever you buy cashflows with margin for repairs/capex saved up who cares if some call it risky to leverage.
There are three parts to it:
1 - What is at risk. This is always the same thing in every deal, and what too many think is at risk, isn't what's at risk.
2 - Who is at risk. This always comes from the person in the funding that is running the risk of losing what's at risk.
3 - Who is the risk. This is always the person that the person who is at risk is taking the risk on.
Now, in a REI property, who/what are the three parts of Risk above. - Investor · Las Vegas, NV · Member since 2020 · 153 posts · 136 votes4yCongrats, Patrick. Question – what do you want?
If you want to leverage that $3M into cashflow to retire you for the rest of your life – there's no reason you can't acquire a $10M apartment complex that makes you 2.5% returns yearly ($250,000 to you) after debt service.
But if you want to own $100M of real estate, then you would use that $3M to leverage it into smaller loans and work your way bigger and bigger. This would mean breaking down the $3M into smaller loans on smaller properties and "flipping" your way up.
Clarify what you (and your partner?) want and that will help you narrow your choices. Wish you the best, brother. - Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes4y
Quote from @Joe Villeneuve:
There are so many mathematical contradictions here I wouldn't know where to beginQuote from @Jerryll Noorden:
We buy all our properties in cash. We make enough money to do so.
We are not in a rush to get as many propwrties as possible. Our priority is having fun doing this.
Then when we rehab it put a tenant in it and we refinance the money back, we get more out than what we put in, and we do it all over again.
When dealing with loans, the way I see it, I don't care about what I physically have left or not after the deal... what I look at is that in the long run I spend more money in fees and stress dealing with loans..
Remember, profits is not just money. It is also stress. See it this way, you spend money for a massage right? for vacation and meds for stress... by eliminating lal that, that is money you don't have to spend just because you didn't have to spend a little bit more in the beginning.
This goes against what Joe mentioned and I know he is way more of an expert than I am so my logic may be flawed, but regardless, that is my logic on it and it works for me.
It is quite simple honestly.
With loans you pay more as in total cost. The illusion is people thinking that THEY don't need to pay it when a renter is in the house. All the benefits you have going with a lender, you have buying it yourself IF you have enough money not to bog you down.
See it this way... the person that is lending you the money needs to get paid too.. where do you think THAT money is coming from? It doesn't come out of nowhere. Someone pays it. Without going for the loans.. the money that SOMEONE had to pay the lender.. YOU get to keep.
See.. the biggest benefit to to borrowing money is when you do not have enough of it to make your next deal (what ever your throughput number is)... but imagine you only have the resources to do 5 deals a week... if you have the money to do 6 deals a week... it doesn't matter right? You can only do 5. So why borrow money at a cost, when it doesn't give you any benefits. The math is not contradicting I assure you. The math is solid!
Lastly.. I didn't give advice everyone should follow. I told people what WE do, because of our high income. For US it makes no sense borrowing.. and if this dude gets $3M and he only wants to buy 1 house a year (exaggerated example)... for him it wouldn't make much sense (to me) to borrow either. Your own money is always cheaper!
- 4yNick ZupecPro MemberInvestor · Saint Joseph, MI · Member since 2022 · 31 posts · 44 votes
Some of these are valid counterpoints to the majority opinion, but I disagree that the only reason to take a loan is if you don't have enough money for your next deal. It depends on interest rates. My first investment property had a 3.25% interest rate. I wouldn't have paid cash even if I had the entire amount available. The other 80% of my money could make more than 3.25% pretty much anywhere else that I put it. Sure the bank is making some money on me in interest, but I am making much more than I'm losing by investing my money elsewhere at a higher than 3.25% return. It's an opportunity cost exercise. Having a loan costs more than paying cash in the long run, but the real question is if your money can make you more than you are paying in interest if you deploy it elsewhere. At a lower interest rate, the answer is usually yes. After all, you probably wouldn't give someone $100,000 if they promised to pay you back at 4% interest over 30 years. With rates in the 6s and an uncertain stock market, I might lean towards paying more in cash.
- Realtor · Mansfield, OH · Member since 2020 · 40 posts · 12 votes4y
Patrick, I have made prime examples to illustrate the difference on ACTUAL deals in my market:
All Cash: https://www.biggerpockets.com/...25% down: https://www.biggerpockets.com/...
Cash on Cash is higher on the 25% down. I would love to send you more deals like this to purchase in Central Ohio
- Rental Property Investor · Member since 2019 · 69 posts · 38 votes4y
I’d also like to argue that a lot people like to talk about math but never the piece of mind way. Not everyone wants to own an empire of 1000 units to brag about. Sometimes it’s about piece of mind. Did you know that a paid off 30 units could also net you what a leveraged 150 units would bring in?
- Lender · Kansas City, MO · Member since 2016 · 141 posts · 71 votes4y
Quote from @Joe Villeneuve:
Do you understand what risk is in the case of REI properties?Quote from @Jacob Trogan:
Quote from @Patrick P.:
I am soon going to receive a decently large cash sum (~3 Mil USD) from a company buy-out in a tech company. There are a lot of ways in my head that I have thought about investing this in real-estate.
Is it more efficient to buy the houses in cash, and then use that rental income to take out additional mortgage, or would it make more sense to pay 15-20%, may a mortgage, but then buy more asset.
One thing to note, is I carry a mortgage on my primary residence of $248,000, but have a stupid low rate on it (1.875% ARM 7/1 that is only in year 1) and I just closed on a flip/remodel that I will have a $325,000 mortgage on that I intend to flip within 4 months.
I am very new to this, so any tips/tricks on Tax assistance, and how to assess what a property would rent for, would be of great assistance.
You are in a position where you should pay 100s or 1000s which is a drop in the bucket for yourself for professional tax advice. The tax benefits of real estate largely seem to be ignored here on BP because most people who need those benefits are high income earners or high net worth individuals which YOU are and 99% of people on this forum are not. Lots more to real estate than just cash flow at your level. If you could buy enough property without any leverage (so in cash) to create enough cashflow to pay for your living expenses that may be my advice. That would be super low headache and allow you to work full time in whatever is your passion which may be your current tech job. Really for anything of substance you need to elaborate more.
As for your question there is not even a debate if you want to grow and expand your portfolio significantly. Leverage is always the option. Buy with 20-30% down to limit risk and don't leverage more than that. If whatever you buy cashflows with margin for repairs/capex saved up who cares if some call it risky to leverage.
There are three parts to it:
1 - What is at risk. This is always the same thing in every deal, and what too many think is at risk, isn't what's at risk.
2 - Who is at risk. This always comes from the person in the funding that is running the risk of losing what's at risk.
3 - Who is the risk. This is always the person that the person who is at risk is taking the risk on.
Now, in a REI property, who/what are the three parts of Risk above.I'll bite, opportunity to learn here, when I say risk I define it as a liquidity problem which is a common problem I see as a HML lender (cash is king).
I personally try to leverage as much as possible and not have any of my own money in a deal because of my personal goasl/risk tolerance. So what I mean specifically for him as a risk is if he were to buy a bunch of properties leveraged 99% somehow with his 3 million and then his monthly gross incomes were not able to support that debt service due to Capex or vacancies or whatever he would then be paying out of his own pocket to support holding onto the property. At the large dollar amounts he is talking about that would probably be unsustainable to support from his own pocket. What most people would then do in that case is sell the property (maybe even at a discount) to liquidate and have cash once again. So specifically the risk I had in mine was a lack of cash on hand. This lack would result from not having sufficient cash reserves.
The biggest risk I see when it comes to real estate is not having the cash on hand to support expenses of holding a property. If the person doesn't want to hold the property and instead sell, their lack of cash is not a risk but an opportunity. But usually people want to choose when they can sell a property and therefore want to have the cash to pay for any expenses for a property until they want to sell.
So anyways what are the three parts of risk?
- Lender · Kansas City, MO · Member since 2016 · 141 posts · 71 votes4y
So now writing this out I guess leveraging more would allow him to hold onto his cash and not have the risk I described above. So I guess my new advice is to leverage to the max on everything! We know that works out well... anyways my advice stands the same from earlier but I am curious what the risks are in real estate according to you Joe?
Join the conversationCreate a free account to reply, vote on answers and follow this thread.