HOW MUCH SHOULD I LEVERAGE?

[Avi Werdeshaim]

Hello,

My Rentals protfolio is currently 35% financed,
Im thinking of pulling more cash in order to keep growing with more rentals.
How much do you think i should leverege?

Thanks!

[Will Fraser]

35% financed, meaning you have 65% equity?  

That's a lot of equity, and I don't mean that in a good way.  That's like having an apple orchard filled with ripe apples on the trees.  Let them sit there and they'll be pretty for a while and then not.

Studies on this in the past (like those cited in The Millionaire Real Estate Investor) would suggest that 50% equity is about the highest savvy investors will have before recapitalizing (putting that equity to work through a sale or a refinance).  

Personally I like 25% equity (75% leverage) for myself, but that's based on a lot of personal factors, like age and risk tolerance, for starters.  

So, let's start with this:  what are your goals through real estate investing?  How can the 40% equity you could EASILY strip out of your properties and put to work with other investment properties help you accomplish these goals?