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Updated about 6 years ago,
Building Forced Equity
Hello Bigger Pockets,
This is my first post on the public forum, and I'm excited to jump in and interact with all the expertise around here!
Over the past year or so, I've been educating myself on a few strategies to enter the real estate investing world with - and in parallel, working on saving and accumulating capital. We own one house as our primary residence, and one thing that wasn't apparent to us at first was how the house appreciated in value due to being close to an upcoming multi use development currently under construction. I thought of 2 possibilities to leverage the equity built in our house for financing. 1) get a HELOC on the equity in the house. while attractive and relitavely easy. A HELOC will create another payment, and the math is harder to get to work in the case of securing cash flow from a rental property for instance. 2) Sell the house, and move to a cheaper smaller house, then use the cash equity gained to invest. The latter is more rewarding, as I get to use my cash right away, and possibly make my second purchase a live and flip.
Our house is in great shape on the inside, but could use a fresh coat of exterior paint, a fresh layer of asphalt on the driveway, and some random things here and there. An investment of around $10k.
The question I have: Is it worth it to spend $10k on the house before selling it or getting a HELOC? would I get an ROI on the money invested? what are the must-do items vs not impactful ones?
Thanks so much!
Rashed