Newbie - What would you do with $350K in home equity?

[Chris Kim]

Hi BP Family,

I'm starting my journey towards financial freedom, and I was curious what you would do if you were able to pull $350K out with a refinance at 3.5%?

I want to eventually own an apartment complex, but since I don't have that knowledge or experience, my initial plan is to use a portion of the equity and buy a duplex that will yield 9.5% return - higher if I self-manage. I realize this may not be the best use of the refinance at the low interest but not bad either as I view this as a learning opportunity since it will be my first investment property. I can also eventually 1031 into something bigger, but I was curious what people who've had more experience than would do with this equity.  

Thank you!

[Joseph Firmin]

Hi @Chris Kim! Instead of a refinance, why not do a HELOC with that equity and then you'll have that equity ready to tap into once you find a property or investment vehicle. If you want to own apartments, perhaps instead of buying a duplex, invest $50K into a multifamily syndication where you can passively observe how apartments are bought and run. Then maybe some of the other funds into another investment as well. $350K is a lot to get started and depending on the market you invest in, could create passive and active income quickly. Having refinanced mine when I started, I regret not doing a HELOC instead as I now had a higher mortgage payment and had it for the duration of time until I purchased something. If you buy a place with cash, you can do a rate and term refinance immediately after buying it (no seasoning required), then you'll have that cash back in your HELOC ready for your next deal immediately... Best of luck and I love your profile pic!