How to Money · Friday, July 3, 2026
The hosts discuss how leverage is a key component for real estate investors, enabling them to control larger assets with less upfront capital. However, they caution that leverage can also amplify losses, as seen in the 2007 market downturn, and requires careful management to avoid significant financial distress.
“Basically, we want you to do things in the right order, and it starts with, like you said, you'll having some margin in your life, an emergency fund, but getting rid of that high and straight debt, but then also making sure you are invested in the most simple of ways before you then start saving up. Yeah, for that first investment property.”
“So it's not just that they're able to force equity in the house, appreciate that property by doing work to it, by like working your butts off, but they are also able to make money because they only have to put a certain percent down on the home that they're buying. And so yeah, without the ability to take out that loan for the majority of the purchase price, most investors wouldn't even be able to consider buying a rental property.”
“But the truth is leverage can also bite you in the button. I mean, talk to anybody who about real estate back in two thousand and seven. They'll tell you. They'll sing the tune of how leverage can work the other way too.”