How to Use Leverage

How to Use Leverage

Extreme money. There’s no other way to put this.

Leveraging money in real estate makes you extreme money.

Time is either going to kill you or get you where you want to go—and time gives you leverage.

Great assets can always be leveraged.

And since leverage is the ultimate multiplier—you can use one dollar to buy four dollars.

What investment allows you to invest $1 million and own $4 million in assets? Real estate.

Add to that these are real assets that can’t be easily replaced or lost, they cash flow, meaning we are paid to wait for appreciation (leveraging time)…

That’s what we do at Cardone Capital, we receive cash flow on the down payment, and wait for the entire $4 million to appreciate; this is the ultimate multiplier combining leverage and appreciation with cash flow.

Ask yourself this:

Will a property still be there in 10 years? 99.99% chance it will and insurance covers the .01%.

Can it be easily replaced? It can’t be destroyed and it will cost more to build in 2029.

If we pay $15 million for an asset worth $50 million, and it only goes up in value by $15 million, selling for $65 million (easy to imagine), then we’ve made 100% on our money.

Our capital invested doubled without the asset doubling. Get it?

Leverage Explained

Riddle: If you and I buy a $20 million property with $5 million down and it cash flows at 10% a year, what did the property cost us?

Answer: The $20 million property cost us nothing.

The $5 million less the cash flow of the 10% per year for 10 years ($500,000 a year) means our original investment is returned in 10 years. Now, we literally own the property with no cash.

Riddle: If we buy a $20 million property with $5 million down and it does not cash flow, what did it cost us?

Answer: $5 million.

This is leverage.

Because of leverage, I was able to buy a $1.95 million asset back in the 1990’s that produced $40,000 of positive cash flow a year while I waited for appreciation.

39 months later, I sold the property for $5.2 million resulting in a total profit before taxes of $3.7 million. That is a 10X return.


I don’t speculate and I don’t gamble with my hard-earned money. I have worked very hard for my money, as you probably have, and I only invest in cash flow producing real estate.

This is an asset I can LEVERAGE with good debt, the property covers all operational expenses, improvements, insurance, taxes, and debt while I patiently wait for the rents to increase and the value of the property then appreciates at which point we sell or refinance and own the property with no money invested.

I never deviate from this criteria. I invest my surplus cash into income-producing machines, in great locations, where the rent is less than the cost of home ownership, and I am buying at or below replacement cost.

When I do invest, I buy very large deals, typically 200 to 1,000 units at a time, in markets with decades of projected job growth, and market demographics more likely to rent than own.

This is how I leverage my money, and how you can too.

Join me in our newest fund, it’s filling up fast!

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