Seeing people with 50 million up to hundreds of millions of dollars in net worths all in real estate, how does that work exactly? Do they just buy properties and flip them? Are they real estate brokers or do they just get lucky that the property increases in value?
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Real estate lets you leverage a lot. So if you have $1 million in equity from an existing property, you can borrow against that $1 million, and put a down payment on a $5 million property.
Assuming your cash flow can cover monthly costs, then you will eventually gain back equity on both properties, and then borrow more money to buy an even more expensive property.
Leverage lets you grow a business faster than normal. The downside is that, if you run into a cash flow interruption, you’re more at risk of losing everything
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