Creating Passive Income with Home Equity Investing
Are you are a passive investor, or maybe thinking of diversifying your real estate portfolio? Home equity investing is a profitable, creative investment that can gain you massive profits.
Last year almost a billion dollars was invested into the equity of single-family homes through home equity agreements. This enables homeowners to get a cash lump sum, without accruing more debt and allows the investor to share in the home's increased value.
To detail exactly how investors can make money with home equity investing, I've brought on Matthew Sullivan, the founder, CEO, and Quantm Real Estate Director. Matthew spent several years working alongside Richard Branson and his corporate finance team and was involved in several high profile Virgin projects. He went on to create Crowdventure, LLC, a real estate crowdfunding company, and today he is working with homeowners to unlock the equity in their homes.
Today's episode covers how investors can make massive passive income utilizing this creative approach, as well as the legalities, how to work with homeowners, and a sample deal of exactly what an investor can expect on a deal.
How Matthew started in home equity investing
Understanding home equity investing as a homeowner and investor
Explanation of the different layers of titles that the jobs act enacted and working with the SEC
Breaking down the financials
Sample home equity deal and what an investor can expect
The benefits to investors when utilizing home equity investing
Explaining the downsides
Understanding the equity return
The biggest challenges
Capital sources have a longer-term investment horizon
The sharing ratio explained
How COVID19 has changed real estate investing
The parameters that the homeowner needs to meet to be able to participate in home equity agreements
Homeowners are motivated, as it's not a reverse mortgage and does not eat into their existing equity
Creating a financial mechanism that matches the investors with the asset, so everyone wins