Jason Hartman says "Don’t be tempted to buy real estate with cash"

PRLog (Press Release) – Jul 28, 2009 – Your broker has turned you on to an incredible income property deal that will cash flow big time from the beginning because it’s already leased long term. You’re so excited you might pass out. There’s cash in the bank to cover the purchase. Do you pull the trigger?
Not quite that fast.
Despite antiquated conventional wisdom to the contrary, buying a property with cash is not something a savvy investor would do. The problem with buying on a cash basis is that you short circuit the benefit of a beautiful little concept called leverage. Pay attention. This could make a big difference in your life.
Let’s say you bought a property for cash for $100,000. One year later, the value has gone up to $110,000, so you sell it and bank a $10,000 profit on the deal. That works out to a 10% annual profit. Nice but not outstanding.
Now let’s do it using leverage. In this scenario, you put down $10,000 on the deal and finance the other $90,000 through the bank. When you sell it one later for $110,000, you have bumped up your profit to 100%! You reaped the same $10,000 profit on the sale but only had to use $10,000 of your money to do it. The real beauty is you don’t have to tie all your money up in one property. You could buy 10 properties with a $10,000 down payment on each. What if, one year later, they all went up an average of $10,000? That’s one hundred grand, buddy.
Imagine the possibilities.
For more free tips and information sign up for my free educational CD at: http://www.jasonhartman.com/squeeze/recla-cd.html

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Platinum Properties Investor Network is a comprehensive solution providing real estate investors with education, research, resources and technology to deal with all areas of their income property investment needs. Led by our President Jason Hartman, our conservative approach puts investors on the path to true financial security and personal wealth. Not only do we offer you valuable assistance in acquiring properties, but we will show you how to develop an investment strategy that will take advantage of the next market downturn. To find out more about our recommended markets, visit us on our website at http://www.JasonHartman.com/.