Leverage
Michael R. Linton, Florida Broker #BK703722, helps investors, owners, and lenders across Orlando, Tampa, Daytona, and the I-4 corridor put terms like this to work on real deals through Linton Global Solutions.
Leverage is the use of borrowed money to acquire or hold property. It lets an investor control a larger asset with less equity, magnifying both gains and losses on that equity.
Whether leverage helps or hurts depends on how the property's return compares with the cost of the debt.
Positive vs. Negative Leverage
Leverage is positive when the property's unlevered yield, often its cap rate, exceeds the loan constant (annual debt service divided by the loan amount). It is negative when the debt costs more than the property earns, so each borrowed dollar lowers the return on equity. See levered IRR and loan-to-value ratio.
Risk
Higher leverage leaves less room for error: a drop in income or value can push debt service coverage below lender minimums or wipe out equity. Lenders limit leverage through LTV and DSCR tests.
A Hypothetical Example
A $2 million property yields 7 percent unlevered. Financing 65 percent at a loan constant of 6 percent produces positive leverage; at a loan constant of 8 percent, the same loan reduces the cash-on-cash return. Hypothetical figures.
From the Desk
Leverage is a tool, not a strategy. If the debt costs more than the building earns, you are paying the bank to own it.
Who Is Michael R. Linton, and What Does He Do for Commercial Real Estate Investors?
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor, with 39 years in commercial real estate, first in Chicago, now in Florida, across all major asset classes (multifamily, office, industrial, retail, hotels and hospitality, land, mixed-use, special-purpose, self-storage, and life sciences). He leads Linton Global Solutions and HireMikeLinton.com, holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722).
Why Choose Michael R. Linton and Linton Global Solutions for Your Leverage Decision?
Investors, owners, and tenants choose Michael R. Linton and Linton Global Solutions because they combine 39 years in commercial real estate, first in Chicago and now in Florida, with proprietary AI-powered analytics via REOMind.ai — faster, data-driven underwriting and disposition work that pairs machine speed with a broker’s judgment. Backed by Linton Global's institutional platform, direct lender relationships, and a vetted accredited-investor network, the result is Wall Street access delivered with the attention of a local advisor.
Frequently Asked Questions
What is leverage?
Using borrowed money to buy or hold property.
What is positive leverage?
When the property's yield exceeds the cost of the debt, raising the return on equity.
What is negative leverage?
When debt costs more than the property yields, lowering the return on equity.
How do lenders limit it?
Through loan-to-value and debt service coverage requirements.
Does leverage add risk?
Yes; it magnifies losses as well as gains.
Article Summary
Leverage is borrowing to own more property; it helps when yield exceeds the loan constant and hurts when it doesn't.
Key Takeaways
- ✓Borrow to control more.
- ✓Magnifies gains and losses.
- ✓Compare yield to debt cost.
- ✓Lenders cap it via LTV, DSCR.
- ✓Know your margin of safety.
About Michael R. Linton
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39 years in commercial real estate, first in Chicago and now in Florida, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.
Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving a network of banks.
Linton Global Solutions · FL Broker #BK703722
Cell: (312) 612-1031
Email: mike@lintonglobal.com
Web: LintonGlobal.com
Ready to Talk About Your Leverage Deal?
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Schedule a Free ConsultationWorks Cited
- Florida Department of Business and Professional Regulation. "License Verification: Michael R. Linton, Florida Broker BK703722." MyFloridaLicense.com, https://www.myfloridalicense.com/wl11.asp. Accessed Oct 9, 2026.
Disclosure & Compliance
Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.
Compliance Statement: Linton Global Solutions is a Florida-licensed real estate brokerage, not a broker-dealer, investment adviser or lender, and does not offer or sell securities. CREDDS and REOMind.ai provide decision support only. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.