Investing with your home's static equity
As a mortgage consultant in California I come across hundreds of clients that have anywhere from $100,000 to $500,000 of equity built into their home. People are very protective of this equity, as for many it is what they plan on using for retirement. Home owners are bombarded by the threats of the housing market crashing down on them, the bubble bursting, even though the average home owner lived in times of $100,000 houses in California, $50,000 homes in Texas, and so on.
Listen, home values will go up and down as long as people are buying and selling property, but the long term results will always be MORE equity. It amazes me when a home owner complains about the job they are working, the business they want to start but just can't find any capital, while they are sitting on two to five hundred thousand dollars of equity.
"You gotta have money to make money", it's true, if I didn't spend money on marketing, I would have no clients. Now, with mortgage rates still relatively low, is the best time to pull some of that 'static' equity out for investing. I call it static because it isn't making any money. I beg you; do not buy the ruby red sports car you've been dreaming of. That's just spending, not investing.
If you're a beginner to the investment world, this may be the avenue you would choose. I know a company that will guarantee a 12% annual return on all investments with them, they've never lost a dime of their clients’ money as long as they've been in business. Imagine borrowing $200,000 out of your home at a 6% mortgage rate. Earning 6% every year works out to be a net return of $12,000.00 with no risk whatsoever. How do they offer this kind of return? They know as well as anyone in the real estate industry knows that home values will always be on an upward trend. When you invest in this company, you're investing in a brand new housing development.
Stocks, bonds, property, mutual funds, you name it. You can turn on profit if you know what you're doing with any of these investment roads. Just keep in mind you're spending 6% for the opportunity. It's not something to sit on. Remember, it's your equity, take it!
About the Author
Devon Auerswald has been in Real Estate for the past five years, quickly moving his way up the ladder of investing and servicing loans for mortgage clients. He specializes in creative financing strategies to "beat the bank at their own game" You can e-mail him at devonauerswald@yahoo.com or visit his website at: http://californiamortgage-loan.com
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