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How To Understand The Power Of Leverage
Investing In Mobile Home Parks
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Leverage remains the most misunderstood and most underutilized ally for investors today.
But it also remains the most powerful tool available to savvy investors who get how to use it efficiently an
There are several types of leverage available to investors and a number of them come into play for mobil
e home parks investors whether they realize it or not.
Then there is financial leverage. Some fear it like the plague, some abuse it and go brok
Others continue to use it as dynamic force for hacking wealth and income, in a sound an
d sustainable way.
So how much does leverage really matter? What types of financial leverage are available
to mobile home park investors today?
How are sophisticated investors using leverage differently?
What is the right balance of leverage for you right now?
We are all very aware that too much leverage, used in an unsustainable way can b
It’s no secret that there is a sizable percentage of the population which hasn’t been
taught to use financing well.
They are constantly sold on financing deals which end up being more costly and
However, there is undeniably a distinct difference between good and bad leverage.
Even the most adamant anti-debt gurus like Dave Ramsey continue to promote real estat
e financing as the one exception to the rule, and a sound financial move.
The bottom line is that financing is just like money. In itself it is not good or bad.
It is how you use it.
There are multiple ways to leverage mobile home park investments including:
•Commercial mortgage lenders
•Friends and family
•Real estate crowd funding
•Hybrid combinations of the above
ative ways to structure deals :
Among these leverage options there are many creative ways to structure deals:
•Wrap around mortgages
•Cross-collateralization and blanket mortgages
•Lines of credit
Whatever your personal credit and financial situation, and belief about debt versus equity ther
e are ways to structure mobile home park deals and gain leverage in a sound and flexible way.
If you don’t like debt, even non-recourse loans, then use equity funding. If you don’t like having
partners or splitting the pie, then use debt financing. Or mix it up with the two of them.
‘Full’ leverage might conjure up mental images of 125%, subprime mortgage loans, but that’s
not what we are talking about here. Investors are absolutely wise to build up equity over time,
and preserve their flexibility to sell and restructure financing in the future, while increasing net
Put simply; a plan to achieve full leverage can ultimately provide the best combination of high
returns and low risk.