Real estate and leveraging: The risk of taking on too much
Abstract: Leveraging other people’s money has always been a primary tool for real estate investors. Using leverage, savvy investors have been able to make more money, much more quickly than they could have otherwise. Although there are advantages to using leverage, there’s also increased risk of loss. This article delves into the topic, explaining how leverage works and exposing some of the red flags that could get you in trouble. A sidebar goes into the loan-to-value ratio and how it fits into the leverage equation.