4 ms·
Leverage. Let's say the inheritance was 50k. You make that a 10% down payment on a 500k house. Assume rent covers your interest on the loan, taxes, etc. 10 y
by readams 6y ago
Leverage. Let's say the inheritance was 50k. You make that a 10% down payment on a 500k house. Assume rent covers your interest on the loan, taxes, etc. 10 years later the house appreciates 100% to 1M. You sell the house.
You just made 500k from 50k.
- perl4ever 6y agoDid you mean "etc" to include maintenance, principle payments, and transaction costs? It doesn't sound like you're describing the magic of leverage, but the magic of having an arbitrary amount of cashflow. Makes me think of https://en.wikipedia.org/wiki/Robert_Kiyosaki https://en.wikipedia.org/wiki/Robert_Kiyosaki and https://en.wikipedia.org/wiki/Trump_University https://en.wikipedia.org/wiki/Trump_University