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Re:We Can All Become Job Creators by eru on Wednesday October 19, 2011 @06:00PM (#3132299)
> So, I could find property to buy outright, but it seems that wouldn't being taking advantage of any real leverage.

Why are you looking for leverage? Isn't 50% quite a lot of leverage?

Re:We Can All Become Job Creators by brc on Wednesday October 19, 2011 @10:35PM (#3133162)
Leverage is a returns multiplier. You might make 5-10% return on Real Estate, but add borrowing and you can increase the returns dramatically. As long as the returns are better than the cost of the borrowed money, everyone wins. If it doesn't, he loses because leverage works both ways. Leverage is vitally important in making money, whether it is through getting other people to work for you, or getting other peoples money to work for you. Any serious entrepreneur should have a deep understanding of the uses of leverage.

The problem is that artificial manipulation of the price of money (interest rates) gives a false signal for people to invest in an asset class, like real estate, because it artificially inflates returns. Real Estate investing contains many risks (the largest is lack of liquidity), so it doesn't make sense to invest large sums for a small return.

Re:We Can All Become Job Creators by eru on Thursday October 20, 2011 @10:01AM (#3134841)
Yes. And he also said how people made lots of mistakes with money earlier. Lots of people had leveraged position in real estate.
Re:We Can All Become Job Creators by fraserharris on Wednesday October 19, 2011 @08:54PM (#3132867)
Its actually 100% leverage of his investment.
Re:We Can All Become Job Creators by eru on Thursday October 20, 2011 @09:59AM (#3134829)
Thanks for the correction! I didn't remember the exact definition.