Why a Buyer Should Never Pay More than Appraised Value on Leveraged Property

Recently a friend asked me to explain why a buyer should never pay more than appraised value on leveraged property.  Since she had taken a few classes I began by explaining the opportunity costs associated with this strategy and I could see her eyes "glass-over" and I knew I had lost her. When I shifted gears and started showing her the economic costs in dollars and cents, she began to understand.  Here are my examples. Example 1 Let's say you [...]