reinvesting using financing

[Timothy Nelson]

I have just been able to purchase my first 2 properties with cash. I had to do so as I am permanently disabled so have very little verifiable income. I did use nearly all the cash I was able to set aside to do so. It was recommended to me that I now take money out of those properties to purchase more with financing. Obviously my cash flow on the 2 would go down and I would have new cash flow from more properties. But the cash flow from those would also be affected by having mortgages. What is the benefit of doing this? I do need to read up on this but thought I would throw this out there too.

[Brie Schmidt]

@Timothy Nelson - The benefit would be to grow faster. With interest rates so low you can generally get a better return on your money by investing in more properties. So if the interest rate is 4.5% and the new properties have a ROI of 10% then you are making 5.5% on the loan