Finance
The concept of leverage in real estate investing means:
ANegotiating the lowest possible purchase price
BUsing borrowed funds to control a larger asset and potentially amplify investment returns✓ Correct
CDiversifying across multiple properties
DObtaining a lower interest rate than the market average
Explanation
Leverage uses borrowed money (mortgage) to control a larger asset than the investor's cash alone could purchase. This can amplify returns when values increase but also amplifies losses when values decrease. Understanding leverage is fundamental to real estate investment analysis.
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