Are You Over Leveraged??

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The speaker explains that if the value of your properties is similar to the amount you owe on them, you are over-leveraged. For example, if your property is worth $100,000 and you owe $95,000, you are likely over-leveraged or very close to it. However, this is not necessarily a problem as long as you are still collecting cash flow and paying the bank. The speaker recommends having about 30% equity in rental properties to allow for the market to shift up to 30% without being underwater.

The speaker explains that if the value of your properties is similar to the amount you owe on them,