Discover the Art of Leverage for Creating Wealth
A Comparison of Two Real Estate Investors
My love for writing doesn’t pay nearly as well as the cash flow and wealth creation I primarily enjoy in commercial real estate.
Because 98.3% of the articles on Medium seem to be about making money, I am committed to sharing a few things I’ve learned over the last thirty years of investing in real estate, stocks, bonds, mutual funds, and private companies.
Residential and commercial real estate can be lucrative investment opportunities for investors seeking to create cash flow and long-term wealth.
Leverage is debt. Leverage can be a powerful tool for investors interested in investing in real estate. Leverage involves borrowing money to invest in an asset, such as obtaining a residential or commercial property loan.
Using leverage, investors can increase their potential returns and grow their wealth over time. As we’ll see in the end, leverage can become a slippery slope leading to bankruptcy.
Two Investors and the Short-Term Analysis
To illustrate the impact of leverage, let's compare the returns of two investors — one who pays cash for a $1,000,000 property and one who borrows 80% of the purchase price from a…
