Leveraging To Prosperity

Using leveraging strategies, of course, is not for everyone. Dealing with debt is a psychological exercise most people find hard to grapple with.

Of all the lending strategies out there the mortgage to buy a home is the most familiar one to investors. Over time, after years of diligently paying it down, you own a home. It's a "debt asset" people have come to accept as a part of life if one wants to own a home.

Yet, if you were to suggest taking out a line of credit on your commercial asset, home or on your income to buy property for revenue streams, the concept seems too risky.

Everything has risk to be sure, but if you can secure a line of credit, it's a great "bridge" to future financial security. You just have to be ready for it and make sure you have a plan in place.

You don't want to sink $30 000 borrowed off a credit line in a fly by night scheme. Logically, you invest in tried and tested investments - say Blue Chip stocks, if you're into that sort of thing - like an apartment building or duplex.

In order to get a credit line, you need to show income or assets for banks to secure their loan off. There's no real secret as to how to go about getting one: Just work. You should be eligible for even a $25 000 line of credit.

The beauty of a line of credit is that you don't have to pay down the principal like a mortgage. As long as you cover the interest, the money "saved" can be used for other things in the meantime. The theory is once you amass a stable income flow to provide for a lifestyle you set, you can begin to pay it down. In other words, it's flexible...so long as the bank doesn't call it in. Which is rare.

Next, you need to determine what you want to buy as dictated by what you can afford.

There are many factors to consider and the best thing to do is exhaustively research things. Talk to real estate agents. Bankers. People you may know who are familiar with this sort of stuff. You'd be surprised what you can learn.

Gathering information is one thing. Acting on it is quite another.

Here's a link to using leveraging to buy rental properties for the first time.