I need this dumbed down I do not get it at all
After taking out a mortgage on a home, you rent it out for more money than you are making on your mortgage. You earn a small profit, and your house is being paid off by someone else.
You get more money when you invest more when you borrow money, but you lose more when you invest less.
Your investing risk is increased when you have debt.
Let’s say I have $10 million dollars to buy an apartment complex. I could write a $10 million check, but in order to purchase my next apartment building, I would need to save up the money. Alternatively, I could put 20% ($2 million) down on FIVE apartment buildings. Alternatively, I might choose to finance just one apartment building and invest the $8 million that’s left over, or I could choose a different approach. This kind of debt utilization has the largest gain potential but also entails greater risk.
Get rid of bad debt as soon as possible, such as credit card debt, student loans, and auto loans. Prior to obtaining a mortgage, pay it off.