Using Leverage Not Cash To Invest In Real Estate Article

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Using Leverage Not Cash to Invest in Real Estate

Utilize unsecured business lines of credit to invest in Real Estate

Author: Thomas E. Kish

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Seems like a no brainier to recommend that people buy more real estate.

History proves that real estate makes more millionaires than any other investment. But where do you get the money when you want to get started? Using unsecured business lines of credit is the way I teach people to get rich, but you will meet people that still believe that it’s a good idea to ONLY use their own cash buy real estate.

How much real estate could you invest in if you never needed to use your own money? The rich get rich because they control more assets than the middle class do. They buy 5 good investment properties to every 1 that we buy. And they buy all this real estate using business lines of credit.

This is simply called using leverage not cash to invest in real estate. But the opposite of using leverage is to pay ALL cash for property and own it free and clear. Why do some people still want to own real estate free and clear? Because they believe that they are making more money if they borrow as little as possible to buy it.

But lets look at 2 examples to see which example makes more money.

Example 1.

Use $40,000 of your personal savings to buy a house with 20% down and get a mortgage for the rest.

You may cash flow $400 per month with this scenario.

And on this one house you will also be getting -

A. equity build up like a personal saving account as your tenants help you pay down the principal on the mortgage each month..

B. appreciation as the house goes up in value, which good real estate has always tended to do.

C. great tax deductions that will lower your personal tax bill in many cases.

Example 2.

Use a $80,000 new business line of credit instead of your own CASH and buy 2 houses.

You may cash flow $200 per house per month for a total cash flow of $400 a month.

And you are making money on TWO pieces of investment real estate instead of one.

Your also getting -

A. Double the equity build up.
B. Double the appreciation.
C. Double the tax deductions.

AND YOU NEVER USED A DOLLAR OF YOUR OWN CASH. The entire down payment came from an unsecured new business line of credit!

I can show you exactly where and how to get MONEY to do this using my Ultimate real estate investor’s guide system.

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Using Leverage Not Cash to Invest in Real Estate