The Advice From a 90-Year-Old Investor I’ve Never Forgotten

Years ago, I was sitting in a CCIM class, listening to a man in his nineties talk about what it was like to own rental properties during the Great Depression. Everyone else in the room was taking notes on cap rates and absorption and vacancy cycles… and then he said something that froze the room.

He said: “With investment properties, you either want to be leveraged to the hilt… or own them free and clear. Everything in the middle is where you get hurt.”

Let me tell you—it has never left me.

Here’s why:
If your properties are owned free and clear, economic shifts become inconvenient, not crushing. A vacancy? Annoying. A roof claim? Unpleasant. A temporary dip in rents? Manageable. You still sleep at night because no one can take the house away from you.

On the opposite end, if you're fully leveraged, meaning minimal equity, when the world falls apart (think 1930s, 2008, or whatever version of chaos comes next), you walk into the bank, look the lender in the eye, and say:
“What are we going to do about OUR problem?”
Because the bank doesn’t want that property back any more than you want to give it to them. When you have almost no equity, there’s nothing for them to go after—so they’re far more willing to work with you.

But the danger zone?
That’s when you have some equity… a “decent” amount. Enough that the bank sees meat on the bone. Enough that in a downturn, your properties become the first they foreclose on. They want what you own, not what the fully leveraged investor owns.

Ever since that day, I’ve structured my thinking around this simple but powerful idea:
There is safety at the extremes, and risk in the middle.

So as you build your own portfolio, ask yourself:
Am I safer fully leveraged right now? Or safer free and clear later?
There’s no right or wrong—just strategy, timing, and intention.

And I hope this little gem from a 90-year-old man you’ll never meet helps you think a little differently about how you grow and protect your wealth.