Cash or Debt?

Should you purchase an investment property using all cash or borrow money?  What will the investment do for you?  Remember, the benefit of purchasing an investment property is determining what the property will do for you!

The Leverage Rate of Return on Appreciation – 3 Steps

  • Step 1– Solve for the anticipated Future Value of the all cash purchase.
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  • Step 2– Solve for the Future Value pay off the note for the financed purchase.
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  • Step 3– Solve for the Rate of the financed purchase.

>> What would you do … pay all cash or leverage your funds by financing and getting a higher rate of return? <<

It can make a LOT of financial sense to leverage your money and finance a property which will give you a higher rate of return.  Of course, you are also making an assumption that you can sell it for a higher value in the future.

3 Ways to Measure Investment Return

Appreciation

Cash Flow

Combination