Teach me how to bankrupt myself using credit
Hi everyone, so this question might come across a little strange, so I thought I would first give some background information. So as things go, my little fix and flip business is starting to grow and I am starting to think about borrowing against my rental property to fund more flips. I have always been a super conservative investor, only borrowing up to 30% of valuation on one property, and my other properties are paid off in cash.
Now I know to grow my business I need to probably be less conservative, at least for a few years, but before I dive into the big big scary world of leverage, I wanted to see if you guys could perhaps tell me how most investors you have heard of or know get into trouble using leverage.
I'm not talking about people who pull out equity to fund vacations, nice boats and cars etc, but rather how do people get themselves in trouble when they reinvest the money in real estate or otherwise.
The reason I'm asking this question phrased this way is because I've heard the success stories of people who leveraged to the hilt and came away winners (i.e. Donald Trump), but I want to learn the lessons of those who failed or almost failed as well. Stories or advice anyone?