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Subject:  Re: OT: KISS Date:  8/11/2002  6:49 AM
Author:  CatherineCoy Number:  73455 of 883512

I cannot speak to the real estate market, about which I know very little except that high leverage in that area is risky.

High leverage in real estate is profitable! I bought two 3-unit apartment buildings for $112,500 each building. I spent $15,000 to fix them up. They cash flowed practically from the git-go. A year later when I refinanced to take out the hard money loans, they appraised at $178,000 each. Three years after I bought them, they're valued at $278,000 each. Geez, do I even have to get out my calculator to determine that my purchase--when I hardly even knew what I was doing--was profitable?

It seems to me that when you buy at a significant discount to ARV (after rehab value), leverage can do nothing but make you wealthy.

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