All Forum Posts by: Colton Lucas

@Colton Lucas one thing you can do is look for a HELOC to be able to tap that equity at your convenience. Some banks and credit unions offer a fixed rate period so you have a predictable lock in. Then you aren't under the gun to purchase another property before a rate lock expires and you could use the equity for a down payment, all cash offer, or to temporarily finance a next property.

I’ve done similar things with my own home equity.

Right on.  Don't get lured by the easy money right now.  Especially if you have minimal experience.  Wall St is buying up properties for cash and inflating the prices right now.  I would never risk leveraging my personal home.  I've been investing in properties for well over 20 years and have never seen what's going down right now

I sold my last spec last part of July and sold all land holdings I was going to put specs on (with handsome profits).  I am doing only customer builds now.  I am getting ready to add addendums to contracts as a result of price increases. If you ever want to discuss in depth, I'd be more than happy to talk.  

Hi Colton, congratulations! That is an awesome position to be in and could really be the golden goose for your financial future. 

First thing I'd recommend is to be patient. You have a great opportunity in the casita to get your feet wet in investing. This market is hot, so no need to feel the need to jump in right away. Education is the best investment you can make, and it sounds like you're off to a great start here on BP. 

On accessing your equity, a couple things may give you some trouble. In many cases you'll need 6 months of seasoning to access that equity (at a reasonable rate at least). Also, if you're only 1 year into that 1099 work, underwriters for more traditional financing will want to see 2 years of income/self-employment history. 

My wife and I have are very fortunate to have a nice chunk of equity at a young age on our property. We refinanced into a very specialized 1st position LOC that's tied to a zero balance sweep checking account. That allows us to sit idle deposits/funds on our balance saving us interest, while retaining access to 80% of our equity. When opportunities arise, we simply write a check from our line and finance that ourselves. We plan to use that 30 year access to equity to build additional wealth, and snowball through investments.

I'm excited to follow along with you on your journey here, cheers!

@Colton Lucas I admire your financial savvy at such a young age. Your thinking is on the right track. You have a lot of equity that is trapped in your primary home that isn't doing anything for you. Your available equity gives you some options. A medium sized multi family would be a good one. It really comes down to a personal choice of whether you want multiple SFR's or fewer MF.

You’re wise to seek advice, and you’re in the right place to educate yourself. As others have indicated above, take your time, absorb as much knowledge as you can and take on a mentor.

That said, as a 29-year veteran CRE lender, now CRE mortgage broker/advisor, I'm happy to have a phone conversation with you, which is a much more efficient approach to learning the timing of your home purchase and discussing your options.

Feel free to reach out if you like. I mentor a number of investors.

Congrats @Colton Lucas, I too am wondering how you recently purchased a home with so much equity. For solar panels, do you find that adds value to a home from an appraisal perspective?

Hi @Colton Lucas 450K in equity at that age is unbelievable, congratulations to you guys! I suggest listening to the Bigger Pockets Real Estate Podcast episode 570. I just listened to this last night and David Greene answers several questions throughout the episode, one being what to do when you have a massive amount of equity in your house and the best way to analyze your situation and then capitalize on it. I would take a listen, see what he has to say and take what you can to apply it to your situation. Good luck!

@Colton Lucas not that it's any of my business, but how on earth did you purchase a property that already has 450k of equity? Before dumping your capital into another property, I advise that you educate yourself on real estate investing to a certain degree, otherwise, you're going to have shady folks reaching out trying to take advantage of the situation. Your question is also entirely dependent on your goals and how active or passive you want to be with your investments. If you have no desire to be a landlord, then maybe network with a RE syndication institution and evaluate your return via that route. Buying a multi-unit property is going to take time and energy and you will need to treat the purchase like a business. However, if you do desire to grow your investment portfolio, I would surround yourself with investors who have done it themselves who can be a guide to help you succeed. Hope this makes sense and helps!