This video explains why you should never buy a rental property in cash. Chandler explains the how using leverage can maximize your return and help you accelerate the way that you build your wealth.
When Chandler bought his first-ever property for $72,000 he bought it completely in cash without any loans.That decision cost Chandler over $157,000! In this video, Chandler breaks down when he bought this condo, the price he sold it for, and what he would have done different along the way. He shares his exact cashflow and appreciation throughout the five years he owned this property. He then explains why he did it all wrong. Most would say the 94% ROI he received over the 5 years was a great return on this investment. However, looking back at this deal, Chandler realized the power of using leverage when buying properties. Had he only put 25% down, and put the same amount of money on 3 other similar condos that were being sold at the time, he would have earned $45,000 every year in cash flow, putting him at $225,000 return. This would have given Chandler a 308% return compared to the 92% return that he received. because of this learning experience, Chandler no longer purchases property with cash. He now purchases all his investment properties with a 20%-30% down payment and borrows the remaining 70%-80% from a bank. This gives him the ability to maximize his return through greater cash flow, principle pay down, and appreciation. The goal of this video is to help all real estate investors understand the power of leverage. As you use the principles taught in this video you will be able to maximize your real estate investing returns and build you net worth much more quickly.
Check out some other videos if you want to learn more about investing in real estate, building a huge passive income or preparing for your own future home.
