Kiyosaki has argued that debt can be a wealth-building tool when used to acquire income-producing assets.
David A. Perez, an enrolled agent and founder of Tax Maverick AI who said he uses a similar strategy as a multifamily real-estate investor, called Kiyosaki’s approach “a great strategy” and said carrying large amounts of property-backed debt is “actually very normal.”
Perez said borrowing against a property’s equity generally produces a tax-free loan because the property has not been sold, though the additional borrowing can increase mortgage payments, interest costs and reduce cash flow.
However, John Poole, founder of Scottsdale, Ariz.-based consultancy JPTD Partners, sounded a more cautionary note.
“I think there’s good debt and there’s bad debt, and then there’s $1.2 billion of debt, which you better know exactly what in the world you’re doing,” he told The Post.
“Leverage works beautifully on the way up, and if it’s not continuing on that way up, then it’s like a chainsaw financially coming down.”
Poole said borrowing against appreciated assets can make sense in limited circumstances, including as an estate-planning tool, but warned against relying on the strategy indefinitely.
Seattle's down town business district is the glaring example of that fact.
There are two legendary Seattle office building titans who have gone belly up financially in the last few years.
Because King County and Seattle keep electing more and more radical Left Commissioners and Executives, down town business confidence has collapsed.
Last time I heard, Seattle's office building vacancy rate was 30%, the highest in the USA.
The building owner strategy is just to walk away from their loans at a certain financial pain point.
The building ownership falls back on the banks, and then every thing just kind of stops.