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Financial Considerations

Financing is a critical component of real estate investment. Investors often use leverage, borrowing funds to purchase properties, which can amplify returns. However, it's essential to understand the costs associated with loans, including interest rates and terms. Exploring options like FHA loans, conventional mortgages, and hard money loans can provide the necessary capital while managing risk³. Additionally, calculating potential returns through metrics such as capitalization rate and cash-on-cash return helps investors assess the profitability of their investments.