Is my Fear of leveraging justified

[Adam Fiore]

I ve been in construction all of my adult life. From 18 on. I got my real estate license at 24. I ve invested in business’s. I have had a rather successful flooring company. I ve sold millions of dollars of remodels. I have since exited that world and find myself now

Tapping into my paid off value add multi families and

Will flip and build new homes and would love the right opportunity to build new apartments.

Financials

9 units

Cash flow 7600 after expenses

My cap rate is 22%

I basically steal a investment property once every other year or so. They are small but mighty

I want to strictly focus on real estate no more doing jobs for hire. Just flips and new builds.

How do I get past the fear of using all of my hard earned savings.

[Steve Vaughan]

Originally posted by @Adam Fiore:

Tapping into my paid off value add multi families and

Will flip and build new homes and would love the right opportunity to build new apartments.

9 units Cash flow 7600 after expenses  My cap rate is 22%
How do I get past the fear of using all of my hard earned savings.

A little more than half my portfolio is paid off so I get the resistance to use leverage. 

Sometimes using all or most of our available cash puts us at more risk than leveraging smartly. I am inclined to get a new 80% loan rather than put a 50% LTV loan on an existing free and clear. My latest is an 80% private loan. No docs, no fees, appraisal, lenders insurance, etc but a little higher than market rate.

Smart leverage to me is keeping cost of capital low and not giving up too much of a free and clear.  Better than strapping ourself with a large capital outlay, diminishing reserves and dry powder.