Using Leverage for Passive Investments

[Terra Padgett]

What’s one mistake you made when using leverage for a passive investment that you’d warn others about?

[Don Konipol]

Quote from @Terra Padgett:

What’s one mistake you made when using leverage for a passive investment that you’d warn others about?

Depends if the passive investment itself is internally leveraged,

So, if an investor is investing in a syndication which owns say a 50 unit apartment complex free and clear of debt, and invests $100k, 50k of which is borrowed at say 5% on a home equity line of credit, this is probably ok.
Not so much under the same scenario of personal borrowing where the syndication had a 50% LTV mortgage itself against the subject property.