What is financing and what are its dangers?

What is financing and what are its dangers?

What is financing and what are its dangers?

 

Hey friends, I came to the US Everything is fine!

I will try today to answer the excellent things you wrote in the previous post and I am glad he has made an interest.

Let's raise the issue of funding.
Of course Maimon is a subject on which you can write a whole week, but I'll try to bring you my angle.

In general, financing is the ability to bring money from another place (usually from a bank) that will pay you for the investment and thus you can buy something that you could not buy with the money you had.
You can "leverage" your money and try to say the return on your money.
How does it work simply? You buy cheap money at 3% interest (for example) and earn a year 10%. At the end of the year, you return the 3 to the nice bank and stay with 7% of the money you did not have!
For understanding also a mortgage is a type of long-term financing.

Any serious investor knows that financing increases its yield significantly and this is a very important tool for serious investments to the point of necessity.
So far everything is pink….

What are the dangers? The nice bank becomes less nice you explain to him that at the end you did not earn 10%
We know many people who went bankrupt because they were too leveraged and did not manage their risks properly.
It's enough to see how Trump take 14's (%) loans interest in his time to figure out how easy it is to lose everything.

As with all the things we talked this week, there's a scale.
From an investor unwilling to hear about a loan "and unwilling to owe anyone"
To an investor who buys assets in 100 the percentage of bank financing.

Another important fact that not everyone knows - money in the country is cheaper!
In the United States as you have already understood it is very difficult to get loans on favorable terms, even for Americans. Mainly because of the general interest rate in the economy, which is about 10 times higher than in Israel.

We in the company understood this need and formed a connection with Bank Hapoalim that enables our customers to loan under very favorable terms (to the appropriate ones, of course), for the purchase of property overseas.

Example route - purchase of one property in cash and a second property in financing.
Very simple, not much money, no high leverage, and high yield profitability.

So where are you on the scale?

Link to the original post in the United States Real Estate Forum on Facebook - Works on a desktop computer (To view the post must be members approved for the forum)

The original responses to the post can be read at the bottom of the current post page on the site or in the link to a post on Facebook and of course you are invited to join the discussion

 

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