As a example, if you had 200K in cash, you could invest this in real estate with these 2 options.

Options 1: buy a house worth 200k in cash.  No mortgage.   Let's say you can cash flow 1200/month

Or

Option 2: buy 4 houses each worth 200K but using leverage, 75% LTV(50K down payment, 150K mortgage, 30 yrs loan at currently 7% interest rates)

let's say after PITI, you cash flow 0 under ideal circumstances(no major cap ex, no prolonged vacancies)

What is the better investment with higher returns long term?  I think it would depend on the location and whether you plan to hold for the long term or cash out at some point. 

decision making can be different in these 2 scenarios:

Scenario A(high appreciation/high rent growth area):  If your house appreciation + rent growth outpace 7%, perhaps option 2 might be the better choice and leverage may amplify your returns.  Although more house means more things that can potentially break and need repairs.  And in "hot markets", there's a risk of property prices going down and you run the risk of being "overleveraged" if vacancies go up.   

Scenario B(low appreciation/low rent growth area):  in this scenario, I think option 1 might be a better investment.  at current interest rates, it just doesn't make sense to leverage if you don't expense house prices to go up.  

Am I thinking about this correctly?  A lot of people say debt paydown is another benefit.  I think with 30 yr amortization, the paydown on principal is minimal in the first few years and I don't see much benefit.  If you are going to a hold house for 30 yrs, capex expenses also each up much of your cash flow as the houses get older.