385: How to Use Equity in Your Home to Reach Financial Freedom Faster

BiggerPockets Money Podcast

BiggerPockets

Education, Investing, Business

4.5 • 3K Ratings

🗓️ 17 February 2023

⏱️ 57 minutes

🔗️ Recording | iTunes | RSS

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Summary

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 BiggerPockets Forums Finance Review Guest Onboarding Scott's Instagram Mindy's Twitter Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! 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 Chris Lopez Profile Click here to check the full show notes: https://www.biggerpockets.com/blog/money-385 Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page! Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome to the Bigger Pockets and Money Podcast where we interview Chris Lopez and talk about what to do with the equity that is stuck in your house.
0:08.5	So I think it always comes down to like, hey, what are your goals and have be realistic about what your goals are because all real estate is is a vehicle to get your tier goal.
0:17.0	And so I think it's very good as people re-value it this new problem they have.
0:21.0	And while they re-value the problem the market also take stock as to what your goals are right now and how they evolved because that gives us the North Star where to go and helps us make the appropriate decisions.
0:33.0	Hello, hello, hello, my name is Mindy Jensen and with me as always is my mind down as money and as money on as my co-host Scott Trent.
0:40.0	Awesome, always good, what a wonderful intro from my notorious co-host.
0:44.0	That's Snoop. Scott and I are here to make financial independence less scary.
0:49.0	Did you really think that was the notorious VIG? That's okay. That was even better.
0:56.0	Scott and I are here to make financial independence less scary, less just for somebody else to introduce you to every money story because we truly believe financial freedom is attainable for everyone no matter when or where you're starting.
1:08.0	That's right whether you and our entire early and travel world going to make big time investments in assets like real estate, start your own business or reassess your already built real estate portfolio.
1:18.0	We'll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams.
1:22.0	Scott, I am super excited to talk to Chris Lopez today. He is a local Denver investor and agent and we are going to talk to him about what to do with all of that equity that stuck in your house.
1:36.0	But before we do, we have a new segment on the bigger pockets money podcast called Money Moment where we share a money hack tip or trick to help you on your financial journey.
1:46.0	Today's Money Moment is if you have trouble saving, use the savings ladder. This is where you pick a reward like AirPods or a spa day and multiply the cost of the item by two to three times its value.
1:59.0	Once you hit that savings goal, plus the cost of the item, reward yourself. Get that item. After that, pick a more expensive item and start the process all over again.
2:10.0	If you have a money tip for us, please share it by emailing Money Moment at bigger pockets dot com.
2:16.0	And as a reminder, we're always looking for guests to come on the show to share their money story or come on as a guest for our finance Friday episodes.
2:24.0	So if you're interested, please apply at bigger pockets dot com slash guest or bigger pockets dot com slash finance review.
2:31.0	Before we bring in Chris, let's take a quick break.
2:34.0	We know you've heard it before cash flow is getting very hard to find. There's always long distance investing, but you may be thinking, I don't have a team enough experience or the market knowledge to get in.
2:44.0	That is where you're wrong. And that's also where rent to retirement comes in.
2:48.0	Rent to retirement offers fully turnkey properties that are newly built or renovated, least and managed, allowing you to invest out of state with confidence.
	...

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