Question about leverage (complete beginner)

[Hideaki Yen]

Hello! I recently got into real estate and was learning about a few things and I want to make sure I understand the concept of leverage. Recently I have been researching about whether to use cash or use leveraging when buying real estate in the future, and I just want to make sure that I clearly know the difference between the two strategies. I wrote the two statements below and was wondering if these are true statements. I thought writing these statements was easier than defining leverage. 

If I am planning to only buy one property, it is always better to buy with cash. This is because you won't have to pay the extra interest when paying back your mortgage. 

You should utilize leveraging when you are planning to buy multiple properties, since you will have a much greater cash flow (if done correctly) with multiple properties (even if you have a mortgage on all the properties) than having one property with no mortgage. 

Is this the right concept? 
Also, I hear in multiple forums about how leveraging can be risky, and the extreme is called "over leveraging"? I'm guessing this means when you are too deep into debt due to buying too many houses with loans, but what is the risk? Every time there is an economic crash, people say that investors who are overleveraging get hit the hardest, but what do they mean specifically? How does that work?  I tried looking everywhere but I don't get a clear answer. Sorry if this is a stupid question. I'm not an adult yet so I don't know much about basic finance and how the economy works.

[John Morgan]

@Hideaki Yen

I used to be a Dave Ramsey guy and had no debt other than my primary house. He scared me to death about debt. Lol. I saved up for years and bought my first two rentals with cash (130k and 60k). I also pulled money out of HELOC and our Roth IRAs to get them. I even did a 401k loan. I had these two properties and these loans paid off within 18 months. I owned them free and clear. What a great feeling! But then I realized all that equity sitting in them was doing me absolutely nothing. I learned about leverage and looked at the numbers when you leverage. I blew me away. Numbers don't lie. See for yourself.

So 5 years ago I decided to use that wasted equity sitting in these paid off rentals and put it to use. I would pull money out of these and use it to put 20% down on new rentals. Or pay cash and BRRRR a few. I've scaled up to 12 properties in the last 5 years by leveraging and using other peoples money. I have 1.1 million in debt as a result. Yikes! Lol. However, my properties combined are worth 2.4 million now. Some people don't feel comfortable scaling up and using good debt. I totally understand. But almost all successful wealthy people have RE. And almost all of them leveraged to build that massive wealth. Not many at all paid cash for them one at a time. Just don't leverage into buying nicer B or A class properties. When the next recession hits, those properties struggle more. I focus on C+ class hoods.

When the next economic recession hits, people from the expensive A and B rentals will bump down to mine. And I may get some people who lost their homes to rent from me. Demand for rentals in this range will be the highest. And they’re appreciating the highest in my area. Builders aren’t building starter homes anymore. They stopped doing that 20 years ago in my area (DFW). So there’s hardly and homes for sale under 200k. And it’s hard to find a house to rent under $1600/month here. This is my target price and target rent. It’s all about the highest demand.