Paying Cash vs Using Leverage in Real Estate Investing

Paying Cash vs Using Leverage in Real Estate Investing


So you have a little bit of cash and you’re
about to buy your first investment property. Wait, should you use all of your money or
should you get a loan? Hi, I’m Mercedes Torres. I help busy professionals acquire passive
income through real estate investing so they can retire even faster. So let’s say you have $50,000 from an old
401k or maybe an IRA, and it’s sitting there stagnant. What to do? Do you buy one property or do you get a bank
loan and buy two properties? Let me tell you what I do. I maximize leverage. I buy properties using bank loans so that
I can diversify not only my portfolio, but I can multiply my cashflow. So two bank loans, two properties, two rental
incomes, two tenants, two different properties completely that will allow your cashflow not
only to grow, but think about the tax benefits that you’re getting with two properties as
opposed to just one. So the real question is how do you maximize
$50,000 that you may have available in an old 401k plan? So let me show you how it’s done. First, find money that’s available in a savings
account, an old 401k or an idle IRA. Find money that’s not really working hard
for you and put your money to work. Putting your money to work in multiple properties
using leverage will allow you the ability to cashflow even more that ultimately would
lead to financial freedom. Second, find the best loan available for you. If you’re a veteran, for example, consider
a veterans loan. If you’re a teacher, consider your credit
union. If you work for a bank, perhaps your bank
is going to give you a friends and family term. Find money that is cheapest to you, that will
allow you to maximize your leverage. Cheaper money is going to result in more money
in your pocket. Third, and most important, always do the math. Figure out is one property for that $50,000
we were talking about going to produce a higher ROI for you or is leveraging a bank loan to
maximize that $50,000 point to be a better play? Numbers don’t lie. Do your math and you will see what is going
to produce a better return for you. But the next question is, what numbers are
the ones that you should be looking at? What numbers are important to you? I go over this stuff on our podcast all the
time. What you’re going to want to do next is listen
to me on our podcast. I go over this on Turnkey Tuesdays, so go
to Epic Real Estate Investing and listen to me talk about the numbers and how they’re
going to make sense for you. Catch you on the other side.

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