Investor Review: UNDERSTANDING LEVERAGE
SPONSORED CONTENT Turning a Small Down Payment into Big Returns LEVERAGE IS A TOOL FOR GROWING YOUR PORTFOLIO.
KIAVI
D espite rising interest rates, seasoned real estate investors often thrive by focusing on leverage rather than just low interest rates. Leverage, or using borrowed funds to boost investment returns, is essential for quickly scaling profits in rental or fix- and-flip properties without using large amounts of personal capital upfront. Although homebuyers typically use mortgages, traditional loans for investors require significant equity, potentially limiting further investments. However, lenders like Kiavi offer high-leverage products, requiring as little as a 5% down
payment, enabling investors to free up capital and increase profits faster.
and maximizing profits, especially if refinancing or other payoff methods are planned within three to 10 years. BENEFITS OF HIGH- LEVERAGE LOANS IN HIGH- INTEREST ENVIRONMENTS 1. MORE CASH IN HAND. High leverage means more retained
MAKING THE MOST OF YOUR EQUITY Consider a $100,000 investment property. Paying cash requires $100,000 upfront, while a typical short-term loan might need a 20-30% down payment ($20,000-$30,000). Kiavi’s loans, with a 95% loan-to-cost ratio or 80% after-repair value, can reduce the down payment to just $5,000-$20,000. These loans often require interest-only payments for a period, preserving cash
cash, allowing for portfolio scaling or other investments.
2. SPEED TO MARKET. High-leverage loans free up funds, enabling rapid movement to new opportunities.
12 | think realty magazine :: september - october 2024
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