I Borrowed 80K At 12% Interest--AM I CRAZY??

[John Thedford]

I BORROWED ALMOST 100K AT 12%...AM I CRAZY???How many would balk and walk? How many would tell me it is a BAD idea? How many would NEVER consider paying that? The fact is, it does NOT matter what you pay for money in many instances. Agreeing to 12% interest must be thought through. The big question is: for how long AND what is my return ON the money (interest expense). Actually, to be precise I borrowed 80K. At 12% interest that comes to $800/month interest only. The key to this arrangement was simple: I had use of that money to make well over 50K TAX FREE if desired...or taxable if I choose to go that route. However, If you string out the principal loan for very long, that would greatly reduce profits. $9600 per year is interest only. So, I got the new property rented, and along with other income, started on a strong FAST pay-off period. I was prepaying 5K/month along with the current interest due. Of course, when Covid hit, etc, I elected to go interest only which by that time was around $200/month. Anyways--the moral of this post is: It DOES NOT matter how much you pay for borrowed money IF the deal pays for itself and you have a solid exit strategy.