Let me get more personal with you. I’ll show you my primary residence.
You might relate well to a real life example.
But this isn’t about crown molding, oil-rubbed bronze cabinet hardware, or those trending matte black kitchen faucets.
It’s about equity, debt, and cash flow.
For many, striving to eliminate good debt are like ankle weights that slow down the progress to financial freedom.
Sure, it will be interesting to watch this video and learn how much I paid for my home, what it’s worth now, and what mortgage interest rate I pay too.
But the real value is in seeing how I made a 5% down payment on my home with a conventional loan, yet cleverly dodged monthly PMI payments by having the seller pay it for me.
I did this because the best way to keep equity out of a home… is to be sure that it never gets in there in the first place.
Watch here or click below:
As long as I manage cash flows, what is the risk of putting more debt on my home?
If the housing market appreciates, it had nothing to do with the amount of equity in my home.
If the housing market depreciates, equity is the first thing that the market will take away from me.
I want the equity separated.
With this $80K cash that I can extract from my home, I might be able to buy two more turnkey properties with it.
Note that when I perform a cash-out refinance of my home to invest in more property…
…I also move from having this same equity chunk control $550K of real estate (my home’s value)… up to perhaps $1M.
Since real estate tends to appreciate over long time periods, I would rather own more than less.
$1 of equity is surely better than nothing.
But I can do something with it.
To initiate the velocity of that $1…
…a refinance will subtract $1 from the equity side.
It will add that $1 to the debt side… and give me $1 of cash to invest with.
That’s the formula. When you transform enough equity into cash flow, you become financially-free.
It’s time for me to go shopping here.
If you want more context and details about these five ways, I share that in my newest video here. You’ll see some of Nixon’s historic announcement too:
Thought getting your money to work for you creates wealth? It doesn’t! That’s a myth. My one-hour investing video course is now 100% free: Real Estate Pays 5 Ways. For a limited time, you can learn how wealth is really created, here.
