IS THERE POWER HERE AT ALL ?????

[Isiah Ferguson]

I always hear people conversing about leveraging thier entire portfolio which is a great way to go. But is there power in NO leverage ? I was just concern of what people thought of dumping staright cash into rental properties. Does anyone believe in NO leverage ?

[David Faulkner]

Leverage is great, until it is not. Today it is fantastic. In 2009 there sure as heck was value in all cash. My method and philosophy has always been use conservative leverage to grow, and all cash for wealth preservation. Put into action, this means use leverage to grow the portfolio sufficient such that the income it generates if all the units were free and clear could sustain your lifestyle plus some reasonable margin (2x for me). Once you get to that point, the leverage has done its job for you, you have control of all the assets you need, it is then time to "flip the switch" from growth mode into wealth preservation mode ... that means plowing all the profits and excess funds into paying off those mortgages in a snowball manner. When you are done paying them off, then you are done, you can do as you like after that, but I don't believe in cash out refinancing the properties after that because I don't believe in risking something you have and need in order to buy something that you don't have and don't need. I may be a bit unusual in this regard, but this has been my operational philosophy and it has worked out quite well for me.