Question for Bronchick - Posted by Eric

Posted by Bronchick on March 11, 2002 at 12:21:23:

The issue is leveraging when you have no cash to deal with the negative cash flow. The more you borrow, the less the cash flow. If you can handle the negative cash flow with income from other sources, no problem. If you buy “nothing down” with no cash reserves, you are in for a world of trouble.

Question for Bronchick - Posted by Eric

Posted by Eric on March 10, 2002 at 16:35:42:

Mr. Bronchick,
Sorry this is not a legal question but I thought that since you are one of the hosts for this forum this would be the best place to reach you. In your book “Flipping Properties” you talk about how a lot of investors lost their property in the late 80’s due to having highly leveraged properties. 1st question: How much leveraging is healthy? When I buy properties to buy and hold what percentage should I pay up front and what percent should I borrow? 50%? 2nd question: What exactly was the RE crash of the late 80’s? I was born in only 1980 so I don’t know from personal experience and I haven’t had any luck finding information on it. Thanks in advance! -Eric