05 May CREPN #91 – The Leverage of Other People’s Money with Jay Swensen
Investing in Real Estate works because of leverage. Other People’s Money is the leverage of real estate. [x_audio_embed][/x_audio_embed] Whether you use a bank, investors, relatives or seller financing, you are using other people’s money. It is the leverage that allows people with little or no cash of their own to buy a property and benefit from real estate. This is unique to real estate. In the stock market, you buy shares of a company. Your upside and downside are limited to the gain or loss of the shares you own. In real estate, you are able to benefit from the value of the whole property. In residential real estate, your success is determined by the surrounding properties. In commercial properties, you can force appreciation through reducing expenses and increasing rent. The power of leverage is undeniable when compared.