Real Estate Investor · Englewood, CO · Member since 2013 · 988 posts · 258 votes
Lose Your Competitive Edge With Debt
The more debt you have, the larger the loan on the property, the less competitive you are.
Is your goal to have as little money tied up in an investment property as possible? He who has the least debt is the most competitive.
Consider this:
In 2006, you buy a similar house next door to mine. We both own the properties as rental investments. I own mine free and clear. You aggressively sought a loan with the least down payment. Because the properties are the same, we both attract the same target market. Both houses rent for $1,000 per month.
Now, it is 2008. The target market is no willing or able to pay $1,000 per month. There are fewer people who qualify to rent your house because you rely on credit checks and I do not.
I lower my rental price to $850 per month and my property remains occupied. You cannot lower your rental price because you still have mortgage payments, overhead, and other debt payments. Your property will not cash flow below a rental payment of $1,000 per month. When you bought the house, you hoped to raise the rent the second year.
While my house has a tenant and is cash flowing at the $850, your house sits empty for more than a month. You are struggling to make the mortgage payment. You cannot find a buyer for the house. Finally, your savings are gone and you give up. The property goes into foreclosure, as many investors’ properties did 2008 and beyond.
Yes, my comments are completely contrary to the many books on the subject. They are based upon decades of experience and observation. My goal is to make deposits. I spend less time massaging numbers and never borrow money. It is very difficult to compete against me.
Just consider the options to determine what works best for you.
Your comments are welcomed and encouraged. We all learn from others ideas.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Tom Goans:
The more debt you have, the larger the loan on the property, the less competitive you are.
Is your goal to have as little money tied up in an investment property as possible? He who has the least debt is the most competitive.
Personally, I disagree with these statements...at least in some circumstances...
The first statement is mathematically incorrect. I can have more debt today than yesterday, but have it spread out across many more properties, each with a lower LTV. More overall debt, less overall risk.
In general, the absolute value of debt is meaningless without more information.
As for the second statement, I know some very competitive investors who are 100% debt laden. Many of the institutional investors who are buying up Atlanta (and other cities) right now are working off 100% debt and are tremendously competitive (if you define competitive to mean they have an acquisition advantage). While I'm not going to comment on their business models (they often make bad investments), they are extremely competitive because they have the ability to leverage large amounts of (borrowed) capital.
Donald Trump is another good example. Back in the early 90s at one point, he was $900M in personal debt. He borrowed about $3B at that time and was able to use it to dig himself out of debt and today he's doing okay for himself.
I'm not advocating large amounts of debt by any means (many people are bad with money and more debt equals more problems)...I'm just pointing out that blanket statements like "He who has the least debt is the most competitive" make absolutely no sense to me.
The bigger questions are how that debt affects your overall financial picture, how you use your debt, how you manage your debt, and what the risk associated with that debt is.
Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
13y
Originally posted by Patrick G.:
Yes, I understand that taking on debt may increase your Cash on Cash Return. (A little) My arguement is that it's not worth it becuase it increases risk.
Patrick, this does not make sense. The idea of risk is being confused here.
If risk can be measured by loss, who stands to lose more? The guy who invested $100k or a guy who invested $20k?
At the worst, the investments are the same if a deficiency judgement is pursued against the borrower. In that case, both losses could be equal at $100k. Adversely, both situations could sell the house for $50k and still have an equal shortfall.
I think this is the epicenter of the difference among investors. Is debt an additional risk?
My personal answer, no. I don't view debt as asset risk. The asset has risk, the debt is just a bill. Same as a water bill. The risk is not getting cash from the investment or return from the investment.
Abingdon, MD · Member since 2013 · 193 posts · 60 votes
13y
Originally posted by Dion DePaoli:
Originally posted by Patrick G.:
Yes, I understand that taking on debt may increase your Cash on Cash Return. (A little) My arguement is that it's not worth it becuase it increases risk.
Patrick, this does not make sense. The idea of risk is being confused here.
If risk can be measured by loss, who stands to lose more? The guy who invested $100k or a guy who invested $20k?
Dion.
The man who invests 20k in 5 houses is at less risk of loss on a single house. He is at more risk (to the tune of $500k) on a market variation. Which I don't believe you are considering.
The best measure of risk, is like J Scott, look at insurance companies. Think to yourself, how much would an insurance company charge me to insure that I do not lose money on this deal.
Dallas, TX · Member since 2011 · 308 posts · 59 votes
13y
Originally posted by Patrick G.:
Yes, I understand that taking on debt may increase your Cash on Cash Return. (A little) My arguement is that it's not worth it becuase it increases risk.
What I was trying to say in the sentence above was the increase in COCR is small, very small, especially if you look at the advantages of debt being used in an appreciating market. I am sure we are all familiar with the concept,
If you invest $10k into a $100k house and in 10 years that house is worth $200k, then you can sell it, pay off the $90k loan and have $110k. The potential to make money is insanely high.
What is your definition of "small"? In the example you provided, the guy investing 10k would have seen a 1000% return on his money, whereas the guy who invested 100k would have seen 100% return.
If you run the numbers without taking appreciation into consideration, say for a 100k house that rents for $1500 at 80% LTV vs owning outright, with 50% expenses and 30 yr, fixed at 5%, I get a 9% return for the cash guy and 19% return for the leverage guy. Is that what you'd consider a "small" difference?
Abingdon, MD · Member since 2013 · 193 posts · 60 votes
13y
Originally posted by Bryce Y.:
What is your definition of "small"? In the example you provided, the guy investing 10k would have seen a 1000% return on his money, whereas the guy who invested 100k would have seen 100% return.
If you run the numbers without taking appreciation into consideration, say for a 100k house that rents for $1500 at 80% LTV vs owning outright, with 50% expenses and 30 yr, fixed at 5%, I get a 9% return for the cash guy and 19% return for the leverage guy. Is that what you'd consider a "small" difference?
I consider the COCR small in comparision with the potential gain using inflation. I also consider it small in comparision to the added risk of going bankrupt for a first time investor taking out that 80%LTV. That is a personal measure of risk. The extra 10% a year may be worth the risk of going banktupt to others.
I will accept your numbers, but it gets a smaller when you factor in the loan costs, and vacancy.
For me right now, I wouldn't risk it for the 10% extra. However if I already had two or three investments free and clear, then I may consider it. As I mentioned before, the main interest for me, would be earning appreciation on borrowed money. I would consider the 10% "icing on the cake", not visa versa.
So Bryce, out of curiousity, since you recently ran the comparision. You looked at 80% LTV, which avoids PMI. Which is great. If you ran the same numbers and paid yourself $100 a month to self insure, what does that do to your ROI?
I did it a while ago, rough numbers of course, comparing one house to 5 leveraged house, and the 5 leveraged houses still came out ahead, but it was only a very small difference.
Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
13y
Originally posted by Patrick G.:
Dion.
The man who invests 20k in 5 houses is at less risk of loss on a single house. He is at more risk (to the tune of $500k) on a market variation. Which I don't believe you are considering.
I am sure that made a lot of sense to you but not me. How can I lose $500k if I only invest $100k in 5 separate deals?
As I mentioned, if the idea is that there maybe some deficiency judgement for any loss on the loan, you are drastically exaggerating that idea improperly. This is the root of the idea that an all equity investor has less risk in the last couple posts. That is not true.
If I invested, $100k, I stand to lose $100k. Assuming that all the sudden the collateral would be valued at zero and I would loose my down payment plus all debt dollars certainly can't be ruled out but is not all that likely and in most cases is improbable. In the event the cash flow does not afford debt service, the bank forecloses. The bank only has $80k invested. If the bank nets $80k, I have no deficiency. (provided the state even allows it) If the property sells for $50k net to the bank, I lose my $20k plus the $30k debt portion. Yes! But so does the equity investor in the exact same situation. The home sold for $50k, he bought it for $100k. It is the same.
In any situation where there is no personal guarantee or allowable deficiency, the debt guy clearly has less risk because he stands to lose less if all things are equal.
We invest in an institutional manner and we deal with this concept every day. Those investors with debt provides for a cheaper cost of capital. This allows those investors to make smaller margins work, which is the competitive advantage. I think if one can not see this in any equal example, they are contriving the example in an unfair comparison.
Real Estate Investor · New York, NY · Member since 2012 · 210 posts · 15 votes
13y
OP's fundamental premise is that lowering rent 15% makes the owner go bust. If people buy any asset with zero margin of safety, then their risk of going bust increases. Borrowing at 4% is a no brainer. Borrowing 100% of the purchase price without any safety cushion is stoopid. Buying 1 asset with 100% cash because one is afraid of debt (and soley for that reason alone) is also stoopid. There is a middle ground.
Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
13y
A footnote the PMI / Self Insured discussion.
This too is headed in the wrong direction. Those are not similar comparisons. If you pay yourself $1, that is $1 more than the other scenario innately. How could it not be better?
What is being missed is the claim on the policy event. Paying yourself means you get more money period. In the event a claim needs process, you pay out more money if you 'self insure' anything.
I am not positive how one could 'self insure' themselves for a mortgage. The idea really makes little sense to me. You can not pay yourself a premium which in the event of default and claim by the Mortgagee you then pay the Mortgagee for their loss percent.
That is apples and watermelons and frankly I am pretty sure impossible.
Abingdon, MD · Member since 2013 · 193 posts · 60 votes
13y
Originally posted by Dion DePaoli:
Originally posted by Patrick G.:
Dion.
The man who invests 20k in 5 houses is at less risk of loss on a single house. He is at more risk (to the tune of $500k) on a market variation. Which I don't believe you are considering.
I am sure that made a lot of sense to you but not me. How can I lose $500k if I only invest $100k in 5 separate deals?
Maybe we are not talking about the same scenerio.
If you invest $20k into a $100k house five(5) times, then you are on the hook for $500k. You pay $20k now and are signing your name and saying I will pay $80k over so many years, regardless of the market, I will pay this money.
Unless you are saying that you would take out 5 loans for $80k a piece and then if the market went bust, you would just walk away and accept the "ding" on your credit. To me that equivelant to stealing. You are not signing a loan saying "If things work out I will pay back this money" you are signing a loan saying "I will pay this money back whether or not things work out"
Abingdon, MD · Member since 2013 · 193 posts · 60 votes
13y
Originally posted by Dion DePaoli:
This too is headed in the wrong direction. Those are not similar comparisons. If you pay yourself $1, that is $1 more than the other scenario innately. How could it not be better?
Okay, So instead of paying yourself $100 per month for 'self insurance'. The analysis should pay $100 a month to an actual insurance company.
Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
13y
Originally posted by Patrick G.:
Originally posted by Dion DePaoli:
Originally posted by Patrick G.:
Dion.
The man who invests 20k in 5 houses is at less risk of loss on a single house. He is at more risk (to the tune of $500k) on a market variation. Which I don't believe you are considering.
I am sure that made a lot of sense to you but not me. How can I lose $500k if I only invest $100k in 5 separate deals?
Maybe we are not talking about the same scenerio.
If you invest $20k into a $100k house five(5) times, then you are on the hook for $500k. You pay $20k now and are signing your name and saying I will pay $80k over so many years, regardless of the market, I will pay this money.
Unless you are saying that you would take out 5 loans for $80k a piece and then if the market went bust, you would just walk away and accept the "ding" on your credit. To me that equivelant to stealing. You are not signing a loan saying "If things work out I will pay back this money" you are signing a loan saying "I will pay this money back whether or not things work out"
Do you agree?
NO, I do not agree.
If we invest $100k into 5 houses, we have invested $100k and we owe $500k in debt and equity. I agree with that.
So what?
We can't walk away from the idea that the collateral has a value. Let's assume that at the time of the investment, the value matches the invested dollars. So each house is worth $100k.
To presume, that in the event of a default, no money would come from the liquidation of the real property is incredibly flawed. In order for the equity investor to have the upper hand in this discussion, that is the mistake that must be made. And frankly, that is the problem with the analysis.
To move the discussion into an ethical debate seems to just avoid the debate and not answer the questions at large. Clearly, most investor types do not intend to take a loan out without paying for it. So in the event the loan is taken and paid back, clearly the equity investor loses that race. That really is simple math.
So then, what happens in the case of default. That is the idea where it seems some say the risk is higher for the person who gets debt versus the person who only invests with equity. My response to that idea is it is false and grossly overstated. It relies on a false conception that somehow the investor who takes out the debt somehow loses more money when comparing two same transaction with a equity and debt distinction. That simply makes little to no sense and is not reality. In the event the debt shortfall is to be repaid, then the loss in both scenarios is equal to each other. In any situation it is a function of the recovery value of the real property. A shortfall in that value would impact both investors in the same manner.....IF...the debt investor is forced to pay the debt shortfall back. If that is not required, regardless of ethical stance, then the less risky avenue is stacking with debt, frankly. Plain simple and easily understood with simple math.
I have addressed the concept a couple of different ways. My arguement is there is not more inherent risk with debt or no debt. That is, debt in and of itself is not a risk, it is a bill. The risk is within the asset, such as the rental income is not as much as it should be or the resale value is less than expected, etc. These same risks exist for both the debt and equity investment on equal grounds.
Further, I explained and gave an exact example of how debt obligations does not create excessive loss in comparison to equity, in fact they are indeed equal. In fact, I point out that in any case where a personal guarantee or a deficiency can not be enforced, in fact the loss can be less for the investor who uses debt.
I really don't think these are hard concepts to garner. In fact, every institutional investor in the world understands and knows these metrics. If you theory was correct, then hedge funds would not leverage their equity nor would banks have a fractional reserve system. So in reality, the world is operating in stark contrast to what you are interfering in your claim that no debt is better than debt.
I suppose for the last bit of clarity, and I do enjoy the debate, explain where the additional risk in debt comes from in contrast to the lack of risk in equity. It is important to not compare apples to oranges here though.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Patrick,
I think this is what Dion is trying to say...
Which of the following situations provides an investor the greatest risk of loss:
1. Buying a $100K property by paying $100K in cash.
2. Buying a $100K property by paying $20K in cash and borrowing $80K.
#2 clearly incurs more debt.
And Dion and I would argue that if you don't provide a personal guaranty, #2 provides less risk because you only have $20K to lose rather than $100K.
Obviously, there are other risks -- hurting your credit, hurting your reputation, etc. But, from a purely cash perspective, the risk of #2 is 80% less than the risk of #1.
Debt is helping the investor incur less financial risk.
Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
13y
Originally posted by Patrick G.:
Originally posted by Dion DePaoli:
This too is headed in the wrong direction. Those are not similar comparisons. If you pay yourself $1, that is $1 more than the other scenario innately. How could it not be better?
Okay, So instead of paying yourself $100 per month for 'self insurance'. The analysis should pay $100 a month to an actual insurance company.
I don't fully understand what the question is here. I do recognize the misnomer of 'self insured'. A borrower can not self insure the mortgagee against default and loan loss. That is since the borrower's role is to pay the debt service and that action is the opposite of default. Perhaps we don't understand what Mortgage Insurance really does and we are just irritated it means as a borrower more money is paid to service the debt.
The idea of paying yourself $100 per month for self insurance does not mean the same thing as paying $100 for any type of insurance. If in month 13 a claim on the insurance exceeds $1,200 how does that get capitalized? The self insured guy only paid, $1,200, what if the claim is $10,000? While in an institutional insurance situation, whether MI or Hazard or alike, there is a pool of capital that the $1,200 would afford a claim against and payment from. So this concept of 'self insured' is misguided, IMO.
Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
13y
Good Summary J Scott. To add a question, perhaps the idea of risk should be further described. I am not trying to advocate for unethical behavior but I am discerning what I would say is real risk, which is risk of financial loss, everything else to me is background noise.
Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
13y
Originally posted by Patrick G.:
Dion,
We just won't agree on this.
If you were to say all that to a loan officer, you wouldn't get the loan.
I don't understand why you bailed out of this. To say we just don't agree does not illustrate what it is, you do not agree with me about.
Let's get past any idea that I don't have a very acute understanding of what a loan is or how to get one or even how to originate, underwrite, fund or acquire a loan. I got all that handled pretty well.
The rebuttal that if you told a loan officer what I am saying, I wouldn't get a loan is also not true. In fact, it is know. That is how the guidelines for investment property loans are structured. The debt provider is in a second loss position. The borrower is in a first loss position. This is why investment property loans have debt service coverage ratios or carte blanche reductions of gross rents to account for vacancy loss, etc. Lenders understand the diversity of risk amongst the utility or real property for primary, secondary and investment purposes. They also understand the ramifications of default. I don't think this is the same as saying, "Bomb" in front of TSA when at an airport.
Telling a loan officer that if the loan goes into default, they will have to foreclose, is not a secret, it is actually what happens. Look, most of that is an angle to turn the debate into some ethical argument, which is not my intention nor do I wish to participate in.
I do, however, enjoy the spirited conversation of what is risk, who has more, if any, how is it quantified and what affects that risk.
Real Estate Investor · TX · Member since 2012 · 59 posts · 15 votes
13y
I am in general against debt. However, I believe that used properly it can be used for good. for example reale estate leverage. used unproperly ( example - credit cards for consumer goods) can be a bad thing.
now, when you use a specific scenario as you did Tom Goans, you can make a point. answer me this.
you -you pay cash for a 100k house and rent it for 1k a month. you have no cash left. you owe no money on the house so you can lower rent to $850 if needed.
me - put down 20k and borrow 80k for the house, but i have 80k in reserves. I can now either ride out the wave or pay of the loan and lower rent to 850?
who has more competitive advantage here?
from the above you can see my opinion, but i do like these types of conversations because it make each of us think as well as the answer my be different depending on your risk tolerence, interest rates, age ect.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Patrick G.:
Originally posted by J Scott:
Patrick,
I think this is what Dion is trying to say...
Which of the following situations provides an investor the greatest risk of loss:
1. Buying a $100K property by paying $100K in cash.
2. Buying a $100K property by paying $20K in cash and borrowing $80K.
#2 clearly incurs more debt.
NO, clearly NO
Both scenario risk $100k.
I'm kinda shocked you would sign your name for $80k and walk away and shrug your shoulders.
Patrick -
First, this is a mathematical issue, not an emotional one. Whether I would walk and shrug my shoulders is not at issue. What is at issue is whether I COULD walk away and shrug my shoulders.
If this is a non-recourse loan, not only COULD I walk away, but I wouldn't even consider it unethical. The lender is accounting for this possibility by charging me higher rates. In other words, he's accounting for his increased risk when he makes the loan (his risk being increased by virtue of the fact that my risk is decreased).
So, given the situation where in option #2 I'm only risking $20K (and again ignoring any emotions I might feel), who has more financial risk -- the guy paying all cash or the guy who borrows some?
Clearly, in this situation, there is more financial risk when being debt-free. Perhaps that's not intuitive, but as an engineer, you know that what is intuitive isn't always accurate. And once you fully grasp it, it does become intuitive.
Abingdon, MD · Member since 2013 · 193 posts · 60 votes
13y
Okay guys,
If you can take out loans, and not pay them back if investments fail, then you are 100% right, the numbers are much better, I can't compete with that.
Look, I've had three home loans, you guys have probably had thousands between you. If you say that the banker is okay with a non-recourse loan and he's letting you sign papers stating that you can walk away from the house, then I can't argue. And yes that would not be unethical if you are just following the contract.
I haven't heard of loans like that. The only loans I've heard of are typical bank loans that say if you stop paying they will take the property , garnish your wages and do whatever we have to do to recoup the full loan amount. I've heard of non-recourse bankruptcies, but not non-recourse loans.
Abingdon, MD · Member since 2013 · 193 posts · 60 votes
13y
Originally posted by J Scott:
If this is a non-recourse loan, not only COULD I walk away, but I wouldn't even consider it unethical. The lender is accounting for this possibility by charging me higher rates. In other words, he's accounting for his increased risk when he makes the loan (his risk being increased by virtue of the fact that my risk is decreased).
J Scott, Does this really happen? Do you really get those loans? Could I get one? This is a completely new concept to me. If I can get a non-recourse loan, I will sign up tomorrow. I really want just small rowhome in Baltimore City to rent out. A $40k home could bring in up to $1,200 in gross rent, I could put $5k down and my wife and I have over an 800 credit score.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
Originally posted by Patrick G.:
J Scott, Does this really happen? Do you really get those loans? Could I get one? This is a completely new concept to me.
Non-recourse loans are much more common among private and commercial lenders, but there are plenty of them out there. Most of the private loans I get (which comprise most of the loans I get, in general) don't come with a personal guaranty, so the property is all the lender can take if I were to stop paying.
Not to mention, even in the government-backed financing world, there are plenty of situations where a loan is essentially non-recourse. For example, if you were to do a short sale, you could very likely negotiate away a deficiency these days, so most of those people who bought property with nothing down back in 2004-2007 are now dumping their houses as short sales, and the only financial hit they're taking is a dent on their credit. Even the IRS is waiving taxes on the loss!
Imagine if those people had bought their houses for cash -- they could have easily lost 10%, 20% or even 50% of their "investment". Instead, they lose nothing but their pride and a ding on their credit. And these are typical homeowners, not sophisticated investors.
Fort Worth, TX · Member since 2011 · 20 posts · 10 votes
13y
Nice post. Yes, it goes against 99% of the advice and conventional wisdom you'll hear on real estate discussion forums and in local real estate investment groups, but I've followed the no-debt and/or pay down debt as fast as possible approach and I would highly recommend it. It's definitely a challenge to get that first property paid off but then the second one is easier, the third even easier, etc. I won't dispute the fact that using leverage is one of the most attractive features of real estate investing and unless you are born with a trust fund it's how almost all of us will start out in this business, but having done it both ways I can say that it is a different world once those mortgages go away. That said, the one property I do still have a mortgage on is by FAR my highest cash-on-cash returning property but that's due to a confluence of factors that I can't necessarily replicate. (Primarily due to refinancing several years ago when we lived in that property and mortgage rates had hit rock bottom.)
Something to keep in mind is that once you have a free and clear property you can take out a HELOC against it and you are now a "cash" buyer for the next property, with all of the advantages that entails.
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
13y
We could still be discussing this topic 1 year from now.
Everyone is going to have a different idea of what they perceive as risky.
How someone views debt is also relative to their spending levels and annual income.
Someone making 50,000 a year might see 100k of investment debt as risky as they are not able to save much above living expenses in case of emergencies. Conversely I have high net worth clients that buy triple net properties and apartment buildings. They make a bunch of money annually with their high level businesses or corporate jobs. Instead of having 8 million debt exposure which they see as too much they are happy with 2 million or 3 million relative to their situation.
The numbers just get bigger but the same questions arise with how much debt to take on but the structures get more complex. I believe in good debt. If you have everything paid off that money is not working for you and is decreasing in value each year because of inflation. If you can have the money work at a harder pace than the cost of the debt and structure it correctly than it works.
Where people became in trouble is using leverage AND overpaying for a property in the wrong cycle. That is where a majority of nightmare cases are heard about. The others are generally related to not performing a specific due diligence item before purchasing that hurts you later on.
For me with my highest ROI I have not come across anything that touches my business model of my commercial brokerage. I mail out a 50 cent letter for 12 months in a year (total cost 5.60). The client buys through me or sells a property and I make at the lowest 30,000 in commission. I can't touch the ROI on that anywhere.
Now having said that I still have to buy some properties for tax depreciation so that it just isn't all given away to the Government annually. So it's not just about the ROI, or debt exposure, etc. being in that for many the tax component is huge to write off income. The chances of interest rates dropping further from a 50 year low is not probable so this is the time to take on cheap debt while many cycles are just rebounding to hold for the long term. My clients look at "debt exposure" at maturity of the loan they are using to acquire the asset. We also look at the "go dark" value the asset will have in an appraisal for worst case scenario with a property. Banks look at this as well in the commercial space.
There is no definitive answer to this topic and there will never be. This topic might sway you totally to someone's position, halfway, or not at all. It's always fun to discuss.
Flipper · Irvine, CA · Member since 2013 · 349 posts · 45 votes
13y
I think it would be interesting to get BEN LEYBOVICH into this conversation. If no debt investing supporters think 20% down is fun to talk about, what about full leverage with 0% down?
