Would You Pay Cash or Use a Loan for new 30k roof?

[Aaron Hirshberg]

I'm putting on a new TPO roof on a commercial building, that has retail on the bottom and apartments on top.

It's tempting to just pay it off in full with cash, but I'm wondering if I should get a loan instead and keep more money for future improvements.

[Joel Owens]

Tillman Fertitta the Billionaire in a video once mentioned he likes to load up on good debt when lenders are giving favorable terms and higher LTV's.

His thought is that you save up as much cash as possible because in a down turn lenders TIGHTEN on what they lend on and what percentage of LTV. Since you have more cash available you can then even with limited financing available in a down turn can take advantage of low priced deals.

In another example if you have very to little debt on properties when lending dries up will be harder to access a good amount of your equity with a loan to take advantage in down cycle to buy more properties.

No strategy is fool proof  but does make sense.