Don’t Buy an Investment Property With Cash

Here’s why I don’t think you should buy a real estate investment in cash.

One of the secrets to successfully investing in real estate is to never pay cash for a property. Always use leverage and financing. I was recently a guest on a podcast where this topic came up, so I wanted to share my thoughts with you today.

You don’t have to use your own money—use leverage. I would never advise anybody to buy with cash. 

“Even if you have the cash, don’t buy real estate at full price.”

Let’s say you and I invest in real estate and we each have $100,000 cash. You buy one property in cash and rent it out to tenants. I take the $100,000 and put a $25,000 down payment on four different properties, then rent them all out to tenants. 

In 20 years, the value of all these properties will easily double. While your property is worth $200,000, my four properties are worth $800,000, and the tenants have been paying off my mortgages the entire time. I made four times the money by spreading the risk four different ways. Even if you have the cash, don’t buy real estate at full price. Go get financing instead.

If you have any questions for me about investing in real estate, buying/selling, or real estate in general, don’t hesitate to reach out via phone or email today. I look forward to hearing from you.

Watch the full podcast episode here!