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Updated about 9 years ago on . Most recent reply
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Possible to grow without taking on debt?
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
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.