1) n. the use of borrowed money to purchase real estate or business assets, usually
involving money equaling a high percentage of the value of the purchased property.
2) v. to borrow most of the funds necessary as a loan against real estate to buy
other real estate or business assets. The dangers of high leverage are over-appraisal
of the property to satisfy a lender, a decline in the value of the property (which
may have been purchased during a period of high inflation), high carrying costs
(interest, insurance, taxes, maintenance) which exceed income, vacancies and/or
inability to finance improvements to increase profits. Too often the result is the
collapse of "paper" real estate empires which have been created by risky leveraging.
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