Investing In Real Estate: Not All Debt Is Bad Debt

Investing In Real Estate: Not All Debt Is Bad Debt

There is a common misconception in the investing world: debt is the enemy of both personal and business finances. After all, if you are saddled with debt, you will not have resources available to grow, and will subsequently collapse. While convincing in theory, there is one flaw: not all debt is the same. There is a huge difference in paying for a luxury automobile that you only use in the summer months and paying for a work truck that helps create income. Bad debt is what will drag your business down, but good debt can help grow your business.

A debt is an obligation to someone or something for a service already received. In the case of mortgage, school or car payments, you have already received the goods and you will repay them for years to come. In its simplest form, any debt should be evaluated in terms of what you receive from it. The most successful people in real estate understand that a good property, even with its debt, is not considered bad debt. If you have a rental property, you have your tenants paying down the debt for you in the hopes that you will eventually be freed of this obligation years down the road. Instead of having a massive expense, you are leveraging your debt into an asset.

Regardless of what business you are in, you are going to have expenses. Some expenses, should directly or indirectly lead to revenue in the form of sales. It is the items such as rent space, automobiles, lavish meals and other poor spending habits that will leave you with nothing to show for them except a large monthly payment obligation. It is not the expenses that cause a business to take a step backwards, but the type of expenses. Before you spend any money on your business, you need to evaluate exactly what you are getting out of it. This doesn’t mean you are cheap or frugal, but you know where every dollar in your business is going. Just by trimming the fat, so to speak, and avoiding expenses that offer nothing in real value, you will have more money to allocate.

Real estate, for all intents and purposes, is a good debt, as it should turn into an asset. When the mortgage market collapsed and the housing crisis started, many investors were forced to walk away from the business because they did not plan for the worst and were overextended on their liabilities. Once their tenants stopped paying, they had no other means to pay the mortgage and quickly lost their properties. The debt became a bad one because they were no longer making money on the property and the risk greatly outweighed the reward. In today’s market, the mortgage programs require you to put money down on the property in order to purchase. This leads to instant equity, but it also leads to lower monthly payments and increased cash flow. You now have a much greater chance at your payments being much lower than your monthly income. The best part is that you are not limited in doing this only once. You can buy as many properties as your lender will allow, or many more if you have access to private money lending. There is no cap on the amount of good real estate debt you can have and you can constantly keep the cycle going.

As much as good debt can afford you wealth and cash flow, bad debt will tear your business apart. If you open a new credit card to put furniture in your office or lease a new car in order to boost your status, this debt is like a black hole. You are getting absolutely nothing from these items, but paying them every month. Once this debt is opened, you now need to work twice as hard and generate more revenue just to offset these expenses. In order to stay afloat, you will take from other areas that may need the money to help your business grow. These items have no appreciable value and you will get nothing for them. You can make the case that a business lunch or dinner with a potential work partner will give you some return, but there is little justification for furniture or an automobile. There are better ways to spend your money.

Once you have excessive debt, it opens the door to get caught in a debt cycle that could prove to be too difficult for you to get out of. If you are behind on your payments, you will look to open more debt to pay liabilities. There is nothing wrong with treating yourself and rewarding a successful deal, but this should only be done with excess capital and not with debt that will become a long term burden. Business is all about the choices you make. If you do not think about what long term debt problems you may be creating, you can find yourself in trouble down the road.

See more at:


  1. An impressive share! I have just forwarded this onto a colleague who
    was conducting a little homework on this. And he in fact ordered me breakfast simply because I discovered it for
    him… lol. So allow me to reword this…. Thanks for the meal!!
    But yeah, thanx for spending the time to discuss this issue
    here on your web page.

  2. hello!,I love your writing so a lot! proportion we keep
    in touch more about your article on AOL? I need
    a specialist on this area to solve my problem.
    Maybe that is you! Looking forward to look you.

  3. Can you tell us more about this? I’d like to find out more details.

  4. Damien says:

    Hi there, I want to subscribe for this website to take newest updates, thus where can i do it please help.

  5. soccer shoes says:

    Howdy just wanted to give you a quick heads up.
    The words in your content seem to be running off
    the screen in Chrome. I’m not sure if this is a format issue or something to
    do with browser compatibility but I thought I’d post to let you know.

    The layout look great though! Hope you get the issue
    fixed soon. Many thanks

  6. Good article. I am facing many of these issues as well..

  7. I am genuinely thankful to the holder of this site
    who has shared this fantastic paragraph at at this place.

  8. Hurrah! Finally I got a web site from where I can truly get
    useful information concerning my study and knowledge.

  9. Hi to every one, since I am in fact eager of reading this website’s
    post to be updated regularly. It contains good material.

  10. Hi just wanted to give you a brief heads up and let you know a few of the images aren’t loading properly.
    I’m not sure why but I think its a linking issue. I’ve tried it in two different internet browsers and both show the same results.

  11. Greetings! Very helpful advice within this post! It is the little changes that make the
    largest changes. Thanks a lot for sharing!

  12. Thank you for every other informative web site. Where else could I get that kind of information written in such a perfect method?

    I have a mission that I’m just now operating on, and I’ve
    been on the glance out for such info.

  13. says:

    Appreciate the recommendation. Let me try it out.

  14. I have been browsing on-line more than three hours these days, yet I never discovered
    any interesting article like yours. It is lovely
    price sufficient for me. In my view, if all web owners and bloggers made good content material as
    you probably did, the net will be much more helpful than ever before.

  15. Hey! I’m at work browsing your blog from my new apple iphone!
    Just wanted to say I love reading through your blog and look forward to all your posts!
    Keep up the fantastic work!

  16. Hello there! I could have sworn I’ve been to your blog before but after looking at a
    few of the articles I realized it’s new to me. Nonetheless, I’m definitely happy I discovered
    it and I’ll be book-marking it and checking back frequently!

  17. Can I simply just say what a comfort to discover someone that genuinely knows what they are talking about online.
    You certainly realize how to bring a problem to light and make it important.
    A lot more people need to read this and understand this side of your story.
    I can’t believe you aren’t more popular because you surely have the gift.

  18. I was suggested this website by my cousin. I am not sure whether this post is written by him as
    nobody else know such detailed about my trouble. You are
    incredible! Thanks!

  19. Hi, I read your new stuff regularly. Your writing style is witty, keep up the good work!

  20. There is definately a great deal to learn about this
    topic. I love all the points you have made.

  21. Now I am ready to do my breakfast, later than having my breakfast coming over again to read additional

  22. What a stuff of un-ambiguity and preserveness of precious
    knowledge on the topic of unexpected emotions.

  23. Greetings from Ohio! I’m bored to death at work so I decided to browse
    your blog on my iphone during lunch break. I love the knowledge
    you provide here and can’t wait to take a look when I get home.
    I’m surprised at how quick your blog loaded on my phone ..

    I’m not even using WIFI, just 3G .. Anyhow, excellent blog!

  24. Hello i am kavin, its my first occasion to commenting anyplace,
    when i read this paragraph i thought i could also make comment due to this good

  25. Thank you for the good writeup. It in fact was a amusement account it.
    Look advanced to far added agreeable from you!
    However, how can we communicate?

  26. Undeniably consider that that you stated. Your favourite reason seemed
    to be on the net the easiest thing to take into account of.
    I say to you, I certainly get annoyed whilst people consider concerns
    that they plainly do not realize about. You managed to hit the nail upon the highest as smartly as outlined out the
    whole thing with no need side effect , folks can take a signal.
    Will likely be again to get more. Thank you

  27. Hi there, I discovered your website by way of
    Google whilst looking for a similar subject, your website got
    here up, it looks good. I have bookmarked it in my google bookmarks.

    Hi there, just turned into aware of your weblog thru Google, and found that it’s really informative.
    I’m gonna be careful for brussels. I will be grateful if you proceed this in future.

    Many people will probably be benefited from your writing.

  28. Hi there, just became aware of your blog through Google, and found that it is truly informative.

    I am gonna watch out for brussels. I’ll appreciate if
    you continue this in future. A lot of people will be benefited from your writing.

  29. backup keys says:

    I visited various web pages however the audio quality for audio songs present at this web
    page is truly marvelous.

  30. Minnie says:

    This website was… how do I say it? Relevant!! Finally I’ve found
    something which helped me. Many thanks!

  31. Hey There. I found your blog using msn. This is a really well written article.
    I’ll be sure to bookmark it and return to read more of your useful information. Thanks for the post.
    I’ll certainly return.

  32. It’s very straightforward to find out any topic on net as compared to books, as I found
    this piece of writing at this web page.

  33. Hi, always i used to check webpage posts here early in the dawn, since i like to
    find out more and more.

  34. Heya i’m for the first time here. I found this board
    and I find It really useful & it helped me out a lot.
    I hope to give something back and aid others like you aided me.

  35. Excellent post. Keep posting such kind of info on your
    site. Im really impressed by it.
    Hi there, You have done a great job. I’ll definitely digg it and in my opinion recommend to my friends.
    I’m sure they’ll be benefited from this site.

  36. Nice blog here! Also your site loads up very fast!
    What web host are you using? Can I get your affiliate link to
    your host? I wish my website loaded up as quickly as yours lol

  37. Appreciate this post. Let me try it out.

  38. Thank you for the good writeup. It in fact was a amusement account it.
    Look advanced to more added agreeable from you! By the way,
    how can we communicate?

  39. Hi, the whole thing is going sound here and ofcourse every one is sharing facts, that’s really fine, keep up writing.

  40. It’s great that you are getting ideas from this post as well as from
    our argument made here.

  41. Nice respond in return of this issue with real arguments
    and telling all on the topic of that.

  42. Thanks , I’ve just been searching for info approximately this topic for a long time and yours is the best
    I have found out till now. However, what concerning the conclusion? Are you positive concerning the source?

  43. I am sure this post has touched all the internet visitors, its really really fastidious
    article on building up new weblog.

  44. Hi, yeah this post is actually good and I have learned lot of
    things from it on the topic of blogging. thanks.

  45. This post is worth everyone’s attention. Where can I find out more?

  46. I am extremely impressed with your writing skills and also with the layout to your weblog.
    Is this a paid topic or did you customize it yourself?
    Either way stay up the excellent high quality writing, it’s rare to peer a great weblog like this one

  47. I do not even understand how I finished up here, however
    I assumed this post was good. I don’t recognise who you are but certainly you are going to a famous blogger for those who are not already.

  48. Hello to every body, it’s my first visit of this web site;
    this webpage includes amazing and in fact fine information in favor of visitors.

  49. Caroline says:

    Hey there I am so grateful I found your weblog, I really found you by accident, while I was
    researching on Bing for something else, Regardless I am here now and would just like to say kudos
    for a fantastic post and a all round thrilling blog (I also
    love the theme/design), I don’t have time to read it all at the moment but I have book-marked it and also added in your RSS feeds, so when I have time I will be back
    to read much more, Please do keep up the fantastic work.

  50. What’s up everyone, it’s my first pay a quick
    visit at this website, and article is really fruitful designed
    for me, keep up posting these types of content.

  51. Marlon says:

    An impressive share! I have just forwarded this onto a friend who had been doing a little
    research on this. And he in fact ordered me breakfast because I
    discovered it for him… lol. So let me reword this….
    Thanks for the meal!! But yeah, thanx for spending the time to discuss
    this issue here on your web page.

  52. Just wish to say your article is as astonishing. The clearness in your post is just great and i can assume you’re an expert on this subject.

    Well with your permission allow me to grab your RSS feed to keep up to date with forthcoming post.
    Thanks a million and please continue the enjoyable work.

  53. You need to be a part of a contest for one of the highest quality sites
    on the web. I am going to highly recommend this web site!

  54. Undeniably imagine that that you said. Your favourite justification seemed to be on the web the easiest thing to consider of.
    I say to you, I definitely get irked at the same time as folks think about worries that they plainly do
    not know about. You managed to hit the nail upon the highest and also outlined
    out the whole thing without having side effect , other people can take a signal.
    Will probably be back to get more. Thank you

  55. Hello, I enjoy reading all of your article. I wanted to write a little comment to support you.

  56. I am really loving the theme/design of your website.

    Do you ever run into any web browser compatibility issues?

    A couple of my blog readers have complained about my website not working correctly
    in Explorer but looks great in Opera. Do you
    have any solutions to help fix this issue?

  57. start me up says:

    I love your blog.. very nice colors & theme. Did you create this website yourself or did
    you hire someone to do it for you? Plz reply as I’m looking to design my own blog and would like to know where
    u got this from. thanks a lot

  58. Hello everyone, it’s my first visit at this web page, and paragraph is genuinely fruitful designed for
    me, keep up posting such posts.

  59. Hello! This is my first visit to your blog! We are a team of volunteers and starting a new project in a
    community in the same niche. Your blog provided us useful information to work on. You have done a marvellous job!

  60. toplist ekle says:

    These are genuinely impressive ideas in about blogging.
    You have touched some fastidious points here.
    Any way keep up wrinting.

  61. toplist ekle says:

    Excellent weblog right here! Also your site quite a bit up
    fast! What web host are you the usage of? Can I get your associate link for your
    host? I wish my website loaded up as fast as yours lol

  62. Stephaine says:

    Hmm is anyone else encountering problems with the images on this
    blog loading? I’m trying to find out if its a problem on my
    end or if it’s the blog. Any suggestions
    would be greatly appreciated.

  63. Exactly what you’re just saying entirely authentic. Actually , i know in which will have to the same, however , I simply think you put it in a fashion that everybody is able to comprehend. Also i like the images you spend at this point. They can fit consequently perfectly with what you are telling. Instant messaging certainly you may get to many people in what you have need to say.

  64. Crystal says:

    My relatives every time say that I am wasting my time here at net, but I know I am getting familiarity daily by reading such good articles or reviews.

  65. I was very pleased to find this site. I wanted to thank you for ones time for this particularly fantastic
    read!! I definitely appreciated every bit of it and i also have you book-marked to
    look at new stuff in your website.

  66. Hello there! Quick question that’s entirely off topic.

    Do you know how to make your site mobile friendly?
    My site looks weird when viewing from my iphone4. I’m trying to find a
    theme or plugin that might be able to fix this issue. If you have any recommendations, please share.
    Appreciate it!

  67. garage door says:

    Great blog here! Also your site loads up very fast! What host are
    you using? Can I get your affiliate link to your host? I wish my web site loaded up as fast as yours lol

  68. If some one wants expert view on the topic of running a blog afterward i propose him/her to visit this website, Keep up the nice work.

  69. Launa says:

    Heya just wanted to give you a brief heads up and let you know a few of
    the images aren’t loading properly. I’m not sure why but I
    think its a linking issue. I’ve tried it in two different internet browsers and both show the same outcome.

  70. fantastic points altogether, you simply received a brand new reader.

    What could you suggest about your put up that you made
    a few days in the past? Any positive?

  71. Hello There. I found your blog using msn. This is a
    really well written article. I will make sure to bookmark it and return to read more of your useful information. Thanks
    for the post. I will certainly return.

  72. First off I would like to say wonderful blog! I had a quick question which I’d like
    to ask if you do not mind. I was curious to know how you center yourself and
    clear your thoughts prior to writing. I’ve had a hard time clearing my mind in getting my ideas out.

    I truly do take pleasure in writing but it just seems like the first 10 to 15 minutes are wasted just trying to figure
    out how to begin. Any suggestions or hints? Appreciate

  73. Joyce says:

    Thank you a bunch for sharing this with all of
    us you really realize what you are talking about! Bookmarked.

    Please also discuss with my site =). We can have a link trade
    arrangement between us

  74. Hi there colleagues, its enormous post regarding teachingand entirely defined, keep
    it up all the time.

  75. I read this paragraph fully concerning the comparison of most up-to-date and preceding technologies,
    it’s remarkable article.

  76. gaming sites says:

    When I originally left a comment I seem to have clicked on the
    -Notify me when new comments are added- checkbox and from now
    on whenever a comment is added I receive 4 emails with the same comment.
    Perhaps there is an easy method you can remove me from that service?
    Appreciate it!

  77. Hey, I think your blog might be having browser compatibility issues.
    When I look at your blog site in Firefox, it looks fine but when opening in Internet Explorer, it
    has some overlapping. I just wanted to give you a quick heads up!

    Other then that, excellent blog!

  78. Having read this I believed it was extremely informative.
    I appreciate you spending some time and energy to
    put this content together. I once again find myself spending a lot of
    time both reading and commenting. But so what,
    it was still worthwhile!

  79. Marylyn says:

    Do you have a spam problem on this blog; I also am a blogger, and I was wondering your situation; we have
    created some nice procedures and we are looking to trade strategies with other folks, please shoot me an email if interested.

  80. Link exchange is nothing else except it is only placing
    the other person’s web site link on your page at appropriate place and other person will also do
    same in favor of you.

  81. I’ve been surfing online more than 3 hours today, yet I never found any interesting article like yours.
    It is pretty worth enough for me. In my view, if all webmasters and bloggers made good content
    as you did, the web will be much more useful than ever before.

  82. I am regular visitor, how are you everybody? This article posted at this web page is actually fastidious.

  83. says:

    Hello mates, pleasant article and pleasant urging commented at this place, I
    am truly enjoying by these.

  84. Genuinely when someone doesn’t know then its up to other people that they
    will assist, so here it occurs.

  85. If you wish for to improve your experience simply keep visiting this web page and be updated
    with the most up-to-date news update posted here.

  86. Madelaine says:

    Howdy just wanted to give you a brief heads up and let you
    know a few of the pictures aren’t loading correctly.
    I’m not sure why but I think its a linking issue.
    I’ve tried it in two different internet browsers and both show the same results.

  87. Darby says:

    We are a group of volunteers and starting a new scheme in our community.
    Your website offered us with valuable info to work on. You have done
    a formidable job and our whole community
    will be thankful to you.

  88. Wow that was odd. I just wrote an really long comment but after I clicked submit my comment didn’t show up.
    Grrrr… well I’m not writing all that over again. Anyways, just wanted to say wonderful blog!

  89. Hello to every , since I am genuinely keen of reading
    this blog’s post to be updated daily. It contains fastidious material.

  90. golf courses says:

    It’s an amazing paragraph for all the internet viewers; they will get advantage
    from it I am sure.

  91. Nice post. I learn something totally new and challenging on websites I stumbleupon on a daily basis.

    It’s always useful to read content from other authors and practice something from their sites.

  92. whoah this blog is magnificent i like studying your articles.
    Keep up the good work! You already know, many people
    are hunting round for this info, you can help them greatly.

  93. Write more, thats all I have to say. Literally,
    it seems as though you relied on the video to make your point.
    You obviously know what youre talking about, why throw away
    your intelligence on just posting videos to your site when you could be giving us something informative to read?

  94. Polly says:

    I loved as much as you’ll receive carried out right here.
    The sketch is attractive, your authored material stylish.

    nonetheless, you command get bought an impatience over that you wish
    be delivering the following. unwell unquestionably come more formerly again since exactly the same nearly very often inside
    case you shield this hike.

  95. Elden says:

    Pretty! This has been an incredibly wonderful post.
    Many thanks for supplying this information.

Leave a Reply

Your email address will not be published.