Your Capital Without Leverage
Your Capital With Leverage
Leverage is using something to gain an advantage. In real estate investing, the idea is to use debt, or other people’s money, to acquire assets and increase ROI.
A traditional mortgage is one example, but working with hard money and private lenders allows you to spread available cash—and risk—across multiple properties. This allows you to scale your business faster. Instead of having all of your available cash tied up in one property, you can use your capital to take on multiple projects, which leads to multiplied returns.
Using leverage also means less of your capital goes into each project. You achieve the same profit, but your cash invested is lower, which means your return on investment is much higher.