Leverage
The real estate business is a tricky profession. It could be one of the best businesses choices, if you are on the right side of the fence when it goes through its cycles. Traditionally, real estate values move upward based on the demand from buyers. If you really think about it, real estate is still in demand today because of international buyers, foreclosures (families will rent or lease after) relocate and the general demand for a place to stay.
In today's market the values of houses have dropped significantly, while the demand has increased. Thus making it one of the greatest times to buy properties at a wholesale price. So why is there such a large inventory of properties for sale? Financing! Banks are not lending as they did 3 years ago. However there is money to be made if you can tap into private capital, 401K, a wealthy partner or pool your money with other business partners.
The idea is to get into an ownership position while these properties are deeply discounted, rent or lease them out and hold them. This leverage will put you in a positive cash flow position now and a big payday later. "But isn't it a terrible time to be in real estate". No, it's a great time for the Savvy
In today's market the values of houses have dropped significantly, while the demand has increased. Thus making it one of the greatest times to buy properties at a wholesale price. So why is there such a large inventory of properties for sale? Financing! Banks are not lending as they did 3 years ago. However there is money to be made if you can tap into private capital, 401K, a wealthy partner or pool your money with other business partners.
The idea is to get into an ownership position while these properties are deeply discounted, rent or lease them out and hold them. This leverage will put you in a positive cash flow position now and a big payday later. "But isn't it a terrible time to be in real estate". No, it's a great time for the Savvy
Comments (4)
Leverage can be a great tool when you buy right. It can also be disastrous when an investor doesn't consider all of the costs of owning a property.
Account Closed, almost 15 years ago
Thanks for the feedback gentlemen.
T Chaashab, almost 15 years ago
I agree with both the post and the comments. This is an amazing time, and wealth creation in our industry is as close as its ever been, as long as its done right.
Kevin Kaczmarek, almost 15 years ago
Leverage is fine if done prudently. Anything above 70% CLTV generally will not cash flow well.
Bryan Hancock, almost 15 years ago