How to Retire in 10 Years Using Home Equity & Rental Properties

Episode #822

If you know how to use your home equity, you can retire MUCH faster than most Americans. For the majority of homeowners, equity is just something to sit on, not something worth using. But what if you could convert your home equity into rental properties, cash flow, or even more appreciation? Where would you be in a decade if you used your equity to make even more equity in other properties? You could retire early, make more than you’ve ever imagined, and KNOW that your wealth is working FOR you.

It’s Sunday, and David remembered to turn his green light on…you know what that means. We’re back with another episode of Seeing Greene, where real estate investors, rookies, and business owners shoot some of their most pressing questions at David. In this show, a young business owner wants to know how to sell (without sounding salesy). Then David describes how to use your home equity to buy even more properties, the best way to pull "wealth" from your rentals, how to retire in ten years, and why no one talks about the “BEAF” strategy of real estate investing.

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00:00 Intro

01:31 Quick Tip

02:17 The Secret to Sales

08:59 How to Use Home Equity to Buy Rentals

14:02 Turning Equity into "Wealth"

22:52 Questions from The Comment Section

24:41 How to Retire in 10 Years

29:12 Must-Have Rental Upgrades

33:08 Do You Know About "BEAF"?

41:01 Ask David Your Question!

[Sageproperties]

Bought my first single family in 2019, sold it in 2020. Used funds to buy owner occupy duplex w/15% down. Saved up money to buy 2nd duplex. Held for 6 months, did cash out refi & used money to buy 3rd duplex. Saved up money and bought 4th duplex. Used heloc and bought 5th duplex. Then used 401k $ and bought 6th duplex. I now have 12 rental units all in same neighborhood. Majority of my loans are 30 yr fixed under 4% interest.

[TEEPEEHOMES]

We are breaking even on one of our properties. Cash flow isn’t the main focus at this juncture. It is the mere fact that the property takes care of itself. We are not stressed and know that we did purchase at a superb price, provide a nice home in a good neighborhood. Our wealth is growing and our tenants are content.

[FavourWilliams-fbcr]

I'm 58 and my husband and I are very worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, we are finding it impossible to replace it. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 40years nonstop just for a crooked system to take all you worked for in a twinkle of an eye.

[streetking]

I don't leave comments often but you and Brandon have helped change my life. I have been interested in REI for some time. I read a few books by Brandon and yourself and finally took the leap and purchased a property in Feb. It was exciting and nerve racking at the same time but had been so much fun with a lot of learning on the way. With your words and knowledge I recieve from the biggerpockets podasts, I feel I have the knowledge i need to be successful. I am thankful for this episode and the info on building equity. I can't wait to purchase my next property and continue to build my portfolio. Thanks for all you guys do.

[Ryan_Lowe]

Closing on my first duplex house hack this week. Blindly offered 20k above asking in a not so great area. Stupid rookie mistake but hoping to get some good deals moving forward

[SharonTran-qs]

Thank you David for another great episode. I am new to the investment arena, and my focus is not on cash flow but building equity and aiming for long term appreciation. I am trying to capitalize on my decent W2 income to buy in good neighborhood with good quality tenants, which translates to negative cash flow in my market. Some times I feel lonely because most people think buying a negative cash flow rental is stupid. It is refreshing to hear this different approach being discussed.

[emanuelcollado]

If it doesn't cashflow it's a liability and liabilities take money out if your pocket

[TJ-thhw]

Another GEM of “Seeing Green”! Great answers to great questions! Always learning from David and BP! Thanks so much!

[yakster]

So many pearls of wisdom I could make a necklace. Thanks for all the amazing insight sir!

[keithmancinelli]

Wow! I listen to as many of these as I can, but with so many investors in different situations, they don't necessarily apply to us at THIS moment. Almost all of the QAs in this episode were directly relevant to us right now. Thank you for all of your answers, and breaking each subject down for us to understand. Thank you David, and to all of you on the BiggerPockets Podcast SHOW!

[ddfeg]

Love this episode!!! Your podcasts give me motivation when I start to lose steam. Thank you.

[DarrellEssexdoubleteam]

The only beef I have with this episode and bp in general lately is we’ve lost the art of brrrr and gone more down the road of old school traditional real estate of longer term buy and hold equity plays. Those are great in some markets and in a slow pace. The comment made about buying in great areas below market price is near impossible in my area because that’s where properties sell same day with 15 offers. Nobody in their right mind would sell off market in these areas even if the property is condemned. So unless you have your own wholesale machine behind your purchases there’s no way you are getting a or even b properties for below market value and minuscule cashflow. Brrrr is the only way to buy and be able to buy another property before 5 years 🤞🏽in the a-b markets and try to build a portfolio for a beginner who doesn’t have hundreds of thousands of dollars to invest and park for a while with no worries. I’d love to hear more about beginners using brrrr in this climate to grow where you can buy 2-4 properties in a year with mostly the same money over park 80 grand in the best neighborhood and sit and hope you can buy another property one day.

[AnnaLee-dfsz]

It’d great to have a show for real estate agents in this recession to survive!
Thanks you!!!

[DanKohan]

This video talks about how to make the most money from real estate. David shares smart ideas about what to do with your property investments in the future. It's helpful for planning your money. Good job, David, for sharing your knowledge!

[gracejiafengliu]

Thank you so much, David! I love your podcast so much and listen to it as often as I can. And I started to listen to your book Long Distance Real Estate.

[erinsteward]

Fabulous answers❤🇨🇦……thank you for clarifying the paths forward…exactly what I needed.

[LeeG]

Great response using analogies concerning various was to realize/utilize the real estate's income and/or equity.

[stanmoney]

I don't like the sound of HELOCs, because of the fluctuating interest rates. Which one would make my mortgage go up the most a cash out refy or a equity loan?

[erinsteward]

I look at Cash Flow as 1 of the ‘big 5’ reasons that are benefits of investing on properties. So I agree…..breaking even with a great investment is a plus not the end of the world as the other 4 great benefits carry you.FABULOUS QUESTION❤

[Encore-Entertainment]

Great Show. I appreciate David’s candid honesty about what sells to the masses vs what some investors choose to do lien BEAF. It was probably TMI that is not a good look for your business. Either way I still appreciate you. I just would have never said that quite part out loud. Keep up the great work. BP is my favorite Podcast!