You Could Have More Equity Than You Think! (How to Use It)

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Business, Investing

4.8 • 16.5K Ratings

🗓️ 16 July 2025

⏱️ 42 minutes

🔗️ Recording | iTunes | RSS

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Summary

It’s the situation every real estate investor wants to be in: your house just appraised for more than you expected. Now, you’ve got some home equity added to your net worth, but how do you use it? Should you keep it in the property and maintain low leverage, or use home equity to scale your real estate portfolio more quickly? We’re answering common real estate questions like this one and a lot more in today’s show! James Dainard joins the show as our veteran real estate investor, owning hundreds of rental units, flipping thousands of houses, and lending millions of dollars. He started as a rookie during the Great Financial Crisis, and today, he’s sharing his hard-earned lessons so you don’t have to make the same mistakes. We’re touching on: What to do with your home equity when your house appraises high How to estimate rehab costs on a renovation or house flip Becoming a private money lender (serious passive income!) Interior design 101, even if you have zero experience in home renovations Whether we should finally kill the 1% rule in real estate (maybe it’s time) Got an investing question? Ask yours on the BiggerPockets Forums! In This Episode We Cover How to use home equity to invest (and whether you should with 7% mortgage rates) Estimating renovation costs on your next rehab or house flip (for free!) Interior design on a budget and how to build a “spec list” of what your house flip needs Private money lending for beginners and how to (passively) make serious cash flow The 1% rule explained and why it isn’t so safe in 2025 And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.biggerpockets.com/blog/real-estate-1148 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[email protected]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Did you know that it's possible for your property to appraise for even more than you expected?
0:05.1	Well, it can. And if that happens, you're going to have some great options on your hand that
0:10.0	you need to think through. Today, we'll break down what to do if you find yourself in that
0:14.1	fortunate scenario and much more.
0:22.6	Hey, everyone, Dave here. It's BiggerPockets Forum's question and answer time once again.
0:26.8	Today I have James Dainert here with me, and we're going to tackle a few of the most
0:30.5	burning questions we could find from investors and aspiring investors in the Bigger
0:35.1	Pockets community.
0:36.7	James and I are going to talk about how to approach interior design if you're doing a renovation,
0:41.6	whether the 1% rule is really, truly dead, how to pivot if your house is suddenly worth
0:47.6	more than you expected, and a few other great topics.
0:51.2	James, you ready to help the people?
0:53.0	This is my favorite type of episode. If anyone
0:55.5	has met me at BPCon, they know I just sit there and we'll talk and answer questions all day long. We pick some questions that are right up your alley, so I think you're going to like these ones. Should we jump in? Let's jump in. Let's see what the needs are. The first one comes from Katie enrichment who has a very good problem on her hands. She says,
1:12.5	I found a duplex and negotiated with the seller to purchase under-asking at $340. Awesome. I can rent it
1:18.8	out for $3,000 a month total and project positive cash flow. Plan was to use a DSCR, which is a
1:25.9	debt service coverage ratio loan to finance at 25% loan to value.
1:30.3	I just received the appraisal back and the house appraised much higher than I expected at 407.
1:36.3	So she's got under contract 340, praise for 407.
1:40.3	She asked, for those of you that are more experienced, would you change your financing
1:44.6	or business model based on this new information? James, what would you do? I'm sure this has
1:49.7	happened to you in your career where you found yourself a great deal. A praise for over-asking.
	...

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