Very few investors take into consideration all of the real expenses associated with Real Estate Ownership. There s Ad Valorem Taxes, Maintenance, Insurance, Management, Vacancies, Capital Improvements, Debt Service, etc. Cash Flow can be allusive. The property will always eat more than we expect. Many people think the way to overcome this problem is by over-leveraging their properties.
Debt is what causes people to go into bankruptcy.
But look at all of the bankruptcies they leave in there path. The funny thing is that once they get back on their feet, they make the same mistake again. They never figure it out. Borrowed money is not profit. It s a liability, plain and simple.