All Forum Posts by: Petronilo Rosel

@Tucker Cummings Your right... I live in southern California where the average yearly appreciation is about 7%. Using the example in my post, even if you did intend on buying back your share and closing out the loan within the year it looks like you'd actually be paying quite a bit for this loan, due to the appreciation in just that one year. 

I guess the best case scenario with this is if the home value did not appreciate at all or even depreciated in that year, then your buyout would only equal to what your original loan was, basically making it a zero interest loan, but this would be a long shot.

I think what enticed me was the no immediate payments. haha.

But yeah, looking into HELOCS, Home Equity Loans, Cash-Out Refis, all the sorts... just stumbled upon this one and saw that no one was really talking about it... may be for a reason...

Thanks for your input!

I was researching alternative financing options and stumbled upon Home Equity Investors. Basically they will give you a loan based on you home's current value for a share of your home's value. This doesn't appear as an additional debt, it's "no" interest, and carries no monthly payments. 

The catch is that the loan is given with a 10 year term in which you will have to buy back their share of your home's value at the time of buyout. I see how they plan to make money through appreciation, so lets say your current home is worth 1,000,000 and you decide to get a 100,000 loan. If in ten years your home value goes up to say 1,500,000 you'd have to buyout their share for 250,000 (this is an example from a home equity investor site I found).

From what I researched, 10 years looks to be the typical term length, with the option to buy them out at any time. So with the intent of using them as a short term lender for buying a fixer upper cash, renovating, refinancing and buying them out within 6 months to a year with the refi, I don't see appreciation going up too much in that time frame. 

So in the end it's like a hard money lender, but with a more flexible term. I was just wondering if anybody knew more about these companies as their websites are very vague with the technically information.

I'm in a similar situation where I've managed to grow a pretty good savings and have good credit, but due to my carefree nature, employment history has been "unstable." I'm partnering up with my sister who has a more stable career as a nurse. So I'll be pitching in with the down and probably covering the repair costs while she secures the mortgage loan. 

Stack your money. Time is on your side. What are you currently doing for work? I just listened to the latest BP episode and the guest worked for other real estate investors, learning the ropes, while saving money to be able to do his first deals. This could be a great route if you are passionate about real estate. You'll basically be able to practice dong deals with none of your money while getting paid!

There's also a bunch who have received the capital from family, via the equity on their parent's homes or retirement accounts (kinda scary territory there, but it's been done). I have cousins whose parents provided the down payments on their properties. 

Then there's also partnering up with an investor, where you bring in the sweat equity and they provide the financial equity.

There are many ways, but either way you go, LEARN the game. Have you learned to analyze deals? Do you know what you are looking for? What market are you going into, etc. 

I'm in the same position and am hearing a lot about a "potential" dip in the market in 2021. At the end of the day if the numbers make sense the numbers make sense and money can be made in any market. Also, unless you are trying to do a flip or do some short term investment, real estate will usually appreciate in the long term. Good luck!