What is “Leverage” in Real Estate?

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  • Rental Property Investor · Smyrna, GA · Member since 2018 · 974 posts · 645 votes
    6y

    Think of the fable of Atlas - using a fulcrum to move the world... Use something small to move something big.  The fulcrum is leverage.

    Leverage in real estate is using $20,000 to buy (control) a $100,000 investment property. You are using a smaller thing to control or move a bigger thing. If you buy a duplex and live in one side (house hack) you could buy it FHA, put 3.5% down and you're using A LOT more leverage to control a bigger asset.

    Hope that helps!

  • Rental Property Investor · Springfield, MO · Member since 2019 · 462 posts · 365 votes
    6y

    Well.. here you go, the below link will tell you all you need to know about leverage. 

    What is leverage in real estate?


  • Member since 2019 · 4 posts · 1 vote
    6y

    @Joseph Firmin

    Thanks for the input!

  • Member since 2019 · 4 posts · 1 vote
    6y

    @Jon Reed

    Great explanation!

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