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negative leverage

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negative leverage
See leverage.


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Using negative leverage means proposing something the other party does not want or taking away something it does want.
When interest rotes are greater than cap rates, the market is in a negative leverage scenario--the more one borrows against a community, the lower the rate of return is on the investment.
In recent years, negative leverage, wherein the cash flow of a building isn't enough to cover its mortgage payments, became commonplace in many real estate acquisitions.
 
 
 
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