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Updated about 9 years ago on . Most recent reply

User Stats

31
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6
Votes
Bradley Marion
  • Real Estate Investor
  • Dayton, OH
6
Votes |
31
Posts

Possible to grow without taking on debt?

Bradley Marion
  • Real Estate Investor
  • Dayton, OH
Posted

Would anyone recommend taking on properties only as you can afford to buy them cash? Or is taking on debt in order to secure new properties recommended.

Currently I do not like debt because of the obvious cost of borrowing money, however I know I could have many more properties if I went the loan route.

Most Popular Reply

User Stats

26
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36
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Dax Desai
  • Investor
  • Houston, TX
36
Votes |
26
Posts
Dax Desai
  • Investor
  • Houston, TX
Replied

Leverage is your friend in real estate.  Think  of it this way.  If you have to save your way to buy a $100k property how long will it take you?  Conversely, you can use leverage and put down $20k and take control of a $100k property.  While your cashflow maybe a couple hundred per month, you will also enjoy paying down of the debt over time.

Instead of buying 1 100k property cash you could buy 5 houses with 20k down each and make perhaps $1000/month cashflow.   In addition presuming you had a 30yr loan.  In 30 years you'd have 500K in paid off assets.

Which is better?  One builds wealth faster using leverage and time.

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