This week’s question comes from Tony’s Instagram direct messages! This rookie real estate investor is asking: I have a good chunk of equity in my home, should I pull out cash to purchase a rental property? If not what should I do with the equity?
If you want to know how to use home equity to buy real estate, you need to know your options first. As many homeowners are sitting on massive equity gains, thanks to the past two years worth of price run-ups, they’re asking how they can use this equity to their advantage. For most investors, you’ll have two options in how you take this equity out of your home’s value. But, both of them need to be intelligently evaluated before you make a decision.
If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group! Or, call us at the Rookie Request Line (1-888-5-ROOKIE).
Ashley:
This is Real Estate Rookie, episode 196. My name is Ashley Kehr, and I am here with my co-host Tony Robinson.
Tony:
Welcome to the Real Estate Rookie podcast, where every week, twice a week, we bring you the inspiration, information and motivation you need to kickstart your real estate investing career. I love Saturdays because we get to switch things up a little bit. Right? We get to dive into some of these questions. But before we do, Ashley, just tell us what’s new with you. What’s going on? What’s new in your neck of the woods?
Ashley:
Not much actually. The last couple of episodes we talked about my knee surgery. We talked about a new deal I’m looking at. So yeah, really nothing else new that I can think of. What about you, Tony?
Tony:
Yeah. For me, we actually just lost out on a property. It was in a new market that we’re looking at and we put up $20,000 as our EMD and with everything that was going on, it’s new construction and the way they set it up was that you had to get a loan to purchase the land and then you had to get a secondary loan to cover the construction. So it…