📉 How Leverage Can Wreck Your Cash Flow 📉

[Stevan Stojakovic]

📉 Leverage is the investor’s favorite word - until it isn’t.

On paper, borrowing more always looks like a win. You pull equity out, redeploy it, and scale your portfolio faster. But there’s a point where leverage stops working for you and starts working against you.

Here’s the part most borrowers miss:
When you push to 80% or 85% LTV, you're not just taking on more debt - you're raising your monthly payments and lowering your DSCR (Debt Service Coverage Ratio).

That means your margin for error shrinks.
One missed rent payment. One vacancy. One unexpected repair.
Suddenly, the property that looked like a “cash cow” on the spreadsheet is barely breaking even in real life.

I’ve seen it happen too many times.
Investors chase every last dollar of equity, get their 80%+ leverage, and then spend the next year managing anxiety instead of cash flow.

Smart operators think differently.
They stress-test their DSCR before closing.
They ask, “What happens if rents drop 10%? What happens if rates rise?”
And they borrow just enough to stay liquid - without sacrificing breathing room.

At PhoenixFunded, we help investors find that balance.
We model your DSCR at multiple leverage levels, show you the tipping point where cash flow breaks, and structure loans that actually perform long-term.

🎥 Watch our full video: “How Leverage Can Wreck Your Cash Flow.”
It's a breakdown of why maximum leverage kills cash flow, how lenders think about DSCR risk, and how to keep your portfolio safe while still growing.

📩 DM us for our DSCR stress-test calculator.
It’ll show you exactly how far you can push leverage before it starts hurting your bottom line.

Because in this business, leverage builds wealth - but only if you respect what it can destroy. 🚀