Am I over leveraged?

[Michael Simolke]

Hey guys and gals. I’m 24 just started investing in RE a year ago. I have 4 properties. 1 is break even 1 has $300 cash flow 1 has $500 cash flow 1 is going through eviction I have about $330,000 in debt. And $18k in cash reserves. Am I over leveraged? What steps should I take now considering the current market conditions.. thanks everybody!

[Al Williamson]

Hi Michael,

So there's negatively, neutrally, and positively leveraged debt.

You don't want negatively leveraged debt because you need to bring money to the table each month to pay for the bill.

Positively leveraged debt throws off cash each month. This is great if you have the right amount in your mix.

So, to answer your question, I'd like you to classify your debt and consider getting read of the negatively leveraged stuff.

Hope that helps.