One of the most overlooked advantages of real estate is also one of the simplest: you can own 100% of an asset while only paying for a fraction of it. We saw this play out firsthand with our first apartment building. We purchased it for $1.6 million, and within a year, we refinanced it at $1.75 million.
When you work through the numbers, our actual cash invested to acquire that building came out to just 6% of the purchase price. We controlled the entire $1.6 million asset, every dollar of income it produced, and every dollar of equity growth — while only putting in 6% of the price.
"One of the beautiful things about real estate investing is the ability to use other people's money"
— DON R. CAMPBELL
This is the part people miss when they compare real estate to other investments. The remaining 94% of the building wasn’t free — it was financed by the bank, and the tenants paying rent every month are the ones actually paying that loan down on our behalf.
We get 100% ownership and 100% of the upside, while someone else is covering the other 94% of the bill. There is no other asset class where this is so common, so accessible, and so repeatable. It’s not a loophole. It’s simply how leverage and cash flow are supposed to work together.