In 200 to 300 words, explain how leverage impacts your returns on real estate.

Guided Response:

Review several of your peers’ posts.  Give additional insight to at least two of your peers on how leverage impacts investments. Do you see any additional differences that exist between residential and commercial real estate with regards to leverage?

In 200 to 300 words, explain which of the methods covered in your readings that are designed to attract tenants and would lead to the greatest return on your investment as well as those that would result in the lowest return.  Provide examples to justify your choices.  Would market conditions play a role in your choices?  Be sure to respond to at least two of your classmates’ posits.

Articles

1. McDonald,  J. (2007).   Optimal leverage in real estate investment with mezzanine lending. Manuscript in preparation. Retrieved from http://www.uic.edu/cuppa/gci/publications/workingpaperseries/pdfs/GCP-0702%20John%20McDonald.pdf
2. Smith, L. (2010, September 29).  Leverage: Investing your real estate net worth [Blog post].  Retrieved from http://www.investopedia.com/articles/mortgages-real-estate/10/increase-your-real-estate-net-worth.asp#axzz22LmRfEFh
3. Gilmore, D. (2011). Determining the value of commercial real estate. Society of Industrial and Office Realtor. Retrieved from http://www.sior.com/docs/membership-