Glossary of Terms

Financial Leverage 2015-11-10 08:00:00

Financial Leverage

The use of borrowed funds to acquire an investment. In the context of commercial real estate, this typically involves the use of a mortgage to acquire a property.  

For instance, an investor may purchase an investment property at a cost of $500,000 by using $150,000 of personal equity and borrowing the difference of $350,000.