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Originally Posted by Mike Oxlong
True. I do know that is an option but I don't know the details on it. I bet you 98% of people don't have a clue how to do that either. Pretty much everyone understands how a mortgage on a property works. Mortgages are far easier to obtain for people than they strategies you are suggesting as well.
I would love an explanation on it........
Say I have $10,000 and I want to buy $100,000 in stocks. How does it work and what type of interest rates am I looking at?
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This is actually very simple and in the cases that I deal with its far easier than a mortgage. You can borrow that whole $100k without the $10k if you so desire and invest the whole shot. You do have to pay interest on that $100k.
The interest rate does depend on where you borrow from and how you do that; in general though you are looking at prime (4.75% today) to do this. You can write off the interest though so your break-even is actually about 3.25%....in other words anything above that is profit. With real estate there are a lot of things to be concerned with...such as you can't write-off the interest on land in this fashion, the properties are not as liquid as stocks/bonds, and the list goes on.
If you have other questions fire away!