The banks will give him money he wants for investing. As Robert points out, he doesn’t need his money to invest. Robert and I often hear the following objection from people: “I can’t invest because I don’t have any money.” That’s a poor and middle-class mindset. If you know nothing or little about real estate, borrowing can create negative cash flow by leveraging without proper knowledge.
Borrowing isn’t the secret, creating cash flow is. You might think that’s a recipe for lower ROI and more taxes, but for the right investor, it’s the opposite: he pays less in taxes and makes more money when he buys with borrowing. Now, Robert buys real estate using loans. The reasoning had less to do with learning about real estate, and more to do with learning about debt and taxes. In 1973, Robert’s father told him to take a real estate class.
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