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Positive vs Negative Leverage in Commercial Real Estate Deals
Investors' cash on cash returns can definitely be negatively affected when the cost of debt increases. But whether or not that means the deal is still worth investing in, I think that requires further analysis. negative leverage could be justified during periods of market volatility like we're experiencing right now. There's an option and that's to forgo leverage altogether, particularly if the perspective returns on the deal look attractive without using debt.