385: How to Use Equity in Your Home to Reach Financial Freedom Faster
BiggerPockets Money Podcast
Introduction
Mindy Jensen, Scott Trench and Snoop Dogg host the Bigger Pockets of Money podcast. Today they talk about what to do with equity that is stuck in your house. They also share a money hack tip or trick to help you on your financial journey.
Your home equity could be the secret sauce to earlier retirement. With so many homeowners and rental property investors across the nation sitting on hundreds of thousands in home equity, one asks, “what if you used this trapped equity to build wealth?” And although most homeowners won’t want to sell their primary residences, refinance into higher mortgage rates, or risk taking out a high-priced HELOC, rental property owners are in the perfect position to use their massive equity positions to upgrade to bigger, better investments. We brought on Chris Lopez, Denver-based investor and agent, to explain.
Chris has been able to build a sizable real estate portfolio quite quickly, but even he admits to starting a little later. After working most of his career as an internet marketer turned day trader, Chris gave it all up to go head-first into real estate as an investor-friendly agent and investor. And, as a Denver investor, he’s seen homes he bought just a few years ago EXPLODE in value, and many other investors feel the same. So, if you’re in Austin, Boise, Raleigh, Phoenix, or any other real estate boom markets, it can seem as if you’re sitting on a pile of wealth that can’t be touched. But you’d be wrong.
In this episode, Chris walks through how homeowners and real estate investors can unlock the “trapped” equity in their homes. He goes through when to buy, sell, or refi and how to use the BiggerPockets Rental Property Calculatorto decide the best move. Chris knows that not every property is worth selling/upgrading, but if you trade a few lackluster properties for cash-flowing ones, you could reach your retirement goals YEARS faster, with more money coming in and less stress. So, want to unlock your home’s equity and speed up your path to early retirement? Stick around!
In This Episode We Cover
Home equity explained and how to use it to build wealth even faster
When to buy, sell, or refinance and how to calculate the best option for you
Cap rates and using this simple metric to decide whether a rental property is worth keeping
HELOCs (home equity lines of credit) and which banks will offer them on rental properties
Chris’ five-step framework to reassess and upgrade your rental portfolio
When to cash-out refinance and whether or not doing so makes sense with today’s high interest rates
And So Much More!
Links from the Show
BiggerPockets Money Facebook Group
Finance Review Guest Onboarding
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Subscribe to The “On The Market” YouTube Channel
Listen to The “On The Market” Podcast: Spotify, Apple Podcasts, BiggerPockets
Check Out Mindy’s 2022 Live Spending Tracker and Budget
Finance Friday: Living Paycheck-to-Paycheck with 9 Rental Properties
Click here to check the full show notes: https://www.biggerpockets.com/blog/money-385
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