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Updated over 5 years ago on . Most recent reply

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Robert Chambers
  • New to Real Estate
  • South Florida
11
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43
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Constant Leverage vs Over contributing

Robert Chambers
  • New to Real Estate
  • South Florida
Posted

As I am a new investor, I was wondering the difference between doing a Grant Cardone style approach and constantly leveraging your debt so that it is always growing versus leveraging your debt to buy but than using extra cash flow from the property to apply to the principle. What are the different mindsets here? I believe this really matters if you have multiple properties or one single unit. I can't grasp my head around it because if both examples goals are to sell and double-triple your money in 5-10 years. Why wouldn't you shave off interest? Your equity hold would increase profit when sold. 

Looking for different views and opinions. Thanks

Most Popular Reply

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3,507
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John Teachout
  • Rental Property Investor
  • Concord, GA
3,256
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3,507
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John Teachout
  • Rental Property Investor
  • Concord, GA
Replied

If you have multiple properties and you're going to pay extra on the mortgage. Apply all the payments to just one property to get it paid off vs spreading it across the portfolio. A whole bunch of properties with equity still require a monthly payment. Some paid off and some leveraged properties can add stability to a portfolio vs all leveraged even if there's equity in all of them.

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