Home Owners: You are living in your Cash Cow!

The secret to building wealth with your existing home

The African American Community has never been in a better position to make some of the biggest financial moves in our history, in this country. With better job opportunities, and entrepreneurial endeavors we are experiencing higher incomes than our parents. With positive gains in income, it becomes very important that we establish financial practices that create a larger asset portfolio for our families. 

Have you owned your home for four years or more?  If, yes do you know you are sitting on a goldmine?  What I mean by that is chances are you may have built equity to $100k or maybe even $200k. But here’s the thing, while it’s great to have so much equity, it is just sitting there. This is an opportunity to put your money to work. If I could show you a way to triple your earnings and equity potential on your primary residence would you want to know about it?  Let me explain this unique method that many savvy homeowners are using to create wealth.  

If you have owned your home for four plus years, chances are you have experience 9-10 percent increases in values over the past few years. It would be safe to say you could likely have $150k-$200k of equity in your home. I will show you a way to access a portion that equity and use it to purchase additional properties. So, let’s say you access $100k of that equity. This can be done easiest by establishing a home equity line of credit (HELOC) on your current home. The HELOC gives you access to your equity so that you can now do whatever you like with the cash. One of the smart moves would be to invest it in additional Real Estate.  

Here is a strategic plan to purchase investment properties. For instance, you can use that $100k equity to purchase two townhomes or condos. You can put a down payment of $50k on each of these two new properties. Now you own three properties two of which you are earning passive residual income from renters. For example, those two rental properties are now bringing an income say of $2000 per month each, but your mortgage and HOA payment only total $1500 per month on each property. Between those two properties you now have a positive cash flow coming each month of $1000. You just gave yourself a $12,000 raise for the year, just by accessing money that was already yours and putting it to work. 

And here is the best part. Remember that $150k-$200k equity you had in your primary residence? Well, you still have it. It’s just been disbursed into three properties instead of one. And you now have three properties appreciating in value instead of one. This is how so many Americans have started building Real Estate Portfolio. The blueprint for this success plan was laid out many years ago. So, it’s not a matter of re-inventing the wheel. It’s simply a matter of taking what has already worked for others and applying it to our own financial portfolio.

Editor’s note: Barry Overton is a licensed Real Estate Agent with New Era Group at Your Castle Real Estate. He has been an agent since 2001, and started investing in real estate in 1996. For more information, email barrysellsdenver@msn.com.