Strategic Leverage vs. Liquidation

$4.19M More. Same Capital.

An illustrative 10-year wealth trajectory comparison on a $1.35M condominium.

Robert Boladian, CMPS® CLA® · Mission Pacific Mortgage · For advisor use · Confidential

Client Situation

An illustrative comparison modeled for advisors: a California couple with four unencumbered single-family rentals valued at a combined $2.7M and a $1.35M managed portfolio. The comparison looked at paying cash by liquidating AUM versus using a 50% LTV cash-out refinance against the rentals and redeploying the remaining capital. No client transacted. The figures are model outputs.

+$4.19MNet Worth AdvantageOption 2 at Year 10, modeled

$1.35MAUM PreservedOriginal portfolio untouched

$900KNew Investable CapitalDeployed back into the portfolio

How It Worked

The Problem

Option 1 liquidates $1.35M in AUM and removes the compounding engine.
The advisor loses managed assets at the point of purchase.

The Structure

A 50% LTV cash-out refinance on four unencumbered SFRs provides $450K for the condo down payment.
$900K is deployed into managed investments while the original $1.35M portfolio stays intact.

The Modeled Result

Year 10 net worth: $5,994,930 for Option 1 versus $10,184,388 for Option 2, a modeled $4,189,458 difference.
The original $1.35M AUM grows to $3.65M using the model’s 10% compounded return assumption.

What This Means for the Advisor

→ $2.25M of AUM is preserved and expanded through the modeled financing decision, equal to $22,500 per year in recurring advisory revenue at a 1% fee.

→ The leverage versus liquidation framework can be applied to HNW clients who have real estate equity and are considering a major cash purchase.

“Most clients instinctively pay cash because it feels safer. The numbers can tell a different story when you model the full 10-year outcome.”

Robert Boladian, CMPS® CLA® · Mission Pacific Mortgage

Have a client considering paying cash for a home? Run the leverage versus liquidation analysis first.

One client, one scenario, one 10-year comparison before the capital moves.

BOOK A PARTNER CALL

Illustrative analytical model, not a completed client transaction. Results may vary. Year 10 figures assume a 10% compounded portfolio return and do not reflect taxes, fees, or market volatility. They are projections, not guarantees. Leverage increases risk. Borrowing against real estate to maintain or increase market exposure can amplify losses as well as gains, and the properties secure the debt regardless of portfolio performance. Rates, terms, and availability depend on borrower-specific facts. Not tax or investment advice.

Robert Boladian, CMPS®, CLA® · NMLS #14241 · (760) 828-7444 · [email protected]
Mission Pacific Mortgage · EAB Holdings, Inc. NMLS #1786785 · DFPI Licensed · San Diego, CA