A common strategy in commercial real estate investing is to multiply your spendable cash return by utilizing favorable debt. It is referred to as “positive leverage.”
In the example below, buying the same $1,000,000 asset yields nearly double the cash flow (18% versus 10%) by utilizing favorable financing. Since the investor’s cost of the loan is 8%, and they are receiving a higher 10% return, their cash position is magnified to an 18% return. Click to learn more about the benefits of commercial real estate investing.
What is RealCrowd?
RealCrowd is an online platform where investors can purchase shares of commercial real estate assets. Partner with real estate experts and share in the returns. To invest in commercial real estate, please click here.