Leverage is the power to control a large investment with only a small amount of money. It’s a powerful tool in Real Estate investing, and if you’ve ever purchased a home before, you’ve already done it.

Let me explain… When you bought your house, did you pay for it in cash for the full price? No – of course not, you put some money down (probably somewhere between 5{d3fcc36f48ce60b5f255353d159c919a44e2bfefe54e9a26abb7c10e69faf24e} and 25{d3fcc36f48ce60b5f255353d159c919a44e2bfefe54e9a26abb7c10e69faf24e} of the price), and the bank gave you a mortgage for the rest of the money.

So now you own your house, and you make the regular mortgage payments on it. Let’s say you continue owning the house long enough that it goes up in value by $100,000, and you sell the house. Does the bank want their share of that $100,000 profit? No, they only want their mortgage paid back.

Given this familiar scenario, you made a profit on the entire house but only purchased 5{d3fcc36f48ce60b5f255353d159c919a44e2bfefe54e9a26abb7c10e69faf24e} to 25{d3fcc36f48ce60b5f255353d159c919a44e2bfefe54e9a26abb7c10e69faf24e} of the house, while the bank purchased the other 75{d3fcc36f48ce60b5f255353d159c919a44e2bfefe54e9a26abb7c10e69faf24e} to 95{d3fcc36f48ce60b5f255353d159c919a44e2bfefe54e9a26abb7c10e69faf24e} of it.

That’s the power of leverage, and that’s why Real Estate Investments are the surest path to wealth.