Summary

In this episode, Joy Schoffler, chief strategy officer for Upside Avenue and a leader in the financial technology community shares how she was able to take her family on an overseas vacation for a month for the last for 4 years, achieve a lot of her life goals and start one of Inc.’s 5000 fastest growing companies, by saving a little bit at a time and living conservatively.  Get her pro tips on real estate investing and learn how you can start early as now.

Resources

• Upside Avenue
• A great white paper that shares a good deal of information about investing in real estate

Key Takeaways

• It’s not what you make it’s what you keep at the end of the day.
• The more financial education I got, the savvier I save.
• In real estate investing or life insurance policy look out for fees and commissions that has been taking off to investors money.
• It is also important for investors to know what types of assets their REITs investing in.
• Retail, office and new development projects may not be good type of assets for REIT.
• Look for things that going to be good for up and down markets like mid-range apartments, senior living facilities and communities with asian communities.
• Take advantage on free education, start investing and try the trial and error.  
• Your money is not just money, it’s your kid’s college.  That’s your health. That’s your ability to make better choices for yourself.  
• If your interested in real estate investing do your homework and make sure that the people have the experience and have the right kind of access in the right kind of deals.
• There are public traded REITS and non traded REITS.
• The decision to live more conservatively,save and invest allowed me for the last 4 years at least a month of overseas vacation with my family, achieve a lot of life goals and start a company.
• Invest for cash flow not only for short-term gain but get yourself a passive streams of income coming in.
• Small decisions that we make that’s how we do wealth and that’s how we change the generational poverty that we are in.
• Save a little bit at a time to build up whatever your minimum is and put it somewhere you can’t touch.  

Summary

Nicole McNair joined us today to help us finally demystify Real Estate Investing as she simplifies the terms and the process for us.  She is a Washington DC based Real Estate Investor & licensed General Contractor and has been investing in real estate for close to 15 years.  She is now holding REI mentorship program that guides one through the process of becoming a Real Estate Investor and will soon to launch her book, Demystifying Real Estate Investing.

Resources

• Nicole’s website
• Real Estate Investment Institute
• Get discounts when you pre-order Nicole’s ebook “Demystifying Real Estate Investing” when you enter the promo code “Dominique”

Key Takeaways

• Wholesaling is the process of a broker and a real estate transaction but you are not purchasing a property.
• As a wholesaler you are placing a property under a contract, you negotiate a property and ensure there is equity and that you’re buying with added discount but you also have given yourself the liberty to assign the contract to other parties so you don’t have to buy the property.
• You can actually assign your right to purchase the property in the contract to another purchaser and that individual will pay you as per your assignment rights.
• Hard Money Lender is a private lender who will lends to an entity not person and they lend based on the value of the asset and the acquisition price that you’ve negotiated for the asset.
• Private lending is very important to real estate investors because everything can be refinanced quickly.
• In rehab you to understand the nature and the limitation of construction and really making sure that you have the solid relationship with your inspector because inspectors can really hold up the finalization of the project. And have a great relationship with your lender.
• If the person is interested in entering in real estate investing and would like to use the acquisition of their first home as their investment property they should consider a multi-family.  
• With multi-family you would able to acquire down payment assistance, lower interest rates on loans, and also considered 203K funds which give you some fic up capitals within the government back loan at lower interest rates than private lenders.
• 203K loans is a FHA based products where they give you loans to improve the property but the improvement has to be mostly cosmetics, nothing mechanical nor structural in nature.
• It is very important to understand your personality in entering in real estate investing.
• The REI Mentorship Program is a 6 week program that guides one through the process of becoming a Real Estate Investor. We train on the main paths into that most use to enter into the investor world and we personally assist each of our students to complete their first wholesale deal. The REI Mentorship Program is the main program of the REI Institute, but we also offer private trainings and workshops throughout the year.
• Having strong whys for doing anything will help you fight with those strong times.
• Self-care is extremely important as an entrepreneur.  
• What readers can expect from “Demystifying Real Estate Investing” is a simple approach to investing meant to counter any anxiety one may have when starting & great tips/strategies to use in any market.
• Don’t get caught in the thick of thin things.
• If you want to set your kids up to understand the value of money then you should also let them know where they could invest their money to get great return, great tax advantages and also a skill set that will create employment for them.
• Pay attention to smaller markets or smaller communities where properties are less expensive so you can create a passive cash flow that you can looking for.
• Vacation rentals give you a great opportunity to earn a larger return over a property because your renting them out room by room versus the entire home than most traditional rentals.

You don’t have to have to hit the lottery to get started!

In this video, I and Kendra Barnes demystified how you can live a life of freedom through real estate investing.

You’ll learn:

• Setting your investment goals
• Determining your budget
• Passive Income Ideas to Save money
• Getting over the down payment hurdle
• Finding a lender
• Finding a Realtor

Get the free worksheet that goes with this video here.

When people consider ways to increase their wealth, they rarely consider leveraging the equity in their home to help reach that goal. There are so many uses for equity which can range from consolidating debt, paying for your child’s education or even buying an investment property.

How Will You Use Your Home Equity?

Hopefully by now you have checked out Capital One’s handy dandy calculator to determine how much equity you have in your home that you may be able to access. When considering how you will use the equity in your home, there are a few things you want to consider. You want to be clear on how much it will cost you to use these funds and your ability to pay the home equity line of credit or home equity loan back. It is also great to take some time and think about your financial goals and what you want to accomplish over the next few years, as well as financial moves you can make now to help you truly bring those Dreams2Reality!

With there being so many ways that you can use your home equity, it’s great to identify ways that using your home equity will ultimately help you build wealth and reach those financial goals. Let’s chat about a few ways that you and others have used their home equity to increase their wealth and reach their financial goals.

Use home equity to Consolidate Debt

Using your home’s equity to consolidate debt is a common option for many. With home equity interest rates being so low, sometimes as low as 3%, it makes sense to get rid of those high-interest credit cards, and pay them off with your equity. By doing this, you will get out of debt much faster and instead of paying multiple credit card companies, now you will only have to make one payment to your home equity lender. Where I have seen people go wrong is taking this step to consolidate and then continuing to use the high-interest rate credit cards and running their debt right back up! As long as you do not make that silly mistake, using your equity to consolidate your high-interest debt can save you thousands!

“I was able to use the equity in my home to consolidate my credit card debt and it cut my monthly debt payment from $1300 to $350/month!” – Jessica M.

Use home equity to make home improvements

Upgrading your kitchen or adding a room to your home is what most people typically think about when they consider using their equity. This can be a great way to make your home more comfortable for you, while also increasing your property value. Depending on the area of your home that you renovate, it can also help to save you money on your heating bill or other utility bills. According to Remodeling magazine, a mid-range bathroom remodel could cost between $12-20,000, and you could see an average return on investment of 62%! That’s a pretty good return. While other factors can come in play that could affect that return when it comes time to sell your home, it just gives you an idea of how financial rewarding home improvements can be.

Use home equity to buy an investment property

If you are looking to begin building your real estate portfolio, leveraging your home equity can be a great idea to get started! Using equity to make more money or even create another stream of revenue sounds like a great idea to me! In fact, this is one of my favorite uses for home equity. If you are able to identify an additional property that you think you can potentially rent out to bring in additional income or even a home you can fix-up and sell, this may be a great investment. I recently spoke with Michael, a millennial homeowner, who explained that he was able to use the equity in his home to put a down payment on a second property, make some minor aesthetic upgrades to the property and rent the property out, bringing in over $700/month in rental income (after he makes his home equity loan payment)! Now obviously you want to speak with a realtor to help you find the best investment property, but this can be a great use of your home equity funds!

Michael used the equity in his home to buy his first investment property that now brings in over $700/month!

There are so many ways that you can use your home’s equity to make more money, support your children’s goals, save money and bring all your Dreams2Reality! I challenge you to take the first step today in reaching those goals and get your customized rate and loan amount (without affecting your credit score) by visiting CapitalOne.com/home-equity.

If you are like myself and many others, you have determined that there is some equity in your home! The possibilities are endless as to what you can use this money for, consolidating debt, adding another bedroom, remodeling your kitchen, ahhhh so many options! But before you start making it rain with equity, you need to determine which is best for you, a Home Equity Loan or Home Equity Line of Credit (HELOC). Be sure to also keep in mind that this loan is backed by your home.

Home Equity Line of Credit or Loan?

There a few factors that come into play when deciding which option is best for you to access your equity. The three ways to access the cash in your home are via a home equity line of credit, home equity loan or a cash-out refinance, however the first two options are most popular and are what we’re focusing on today. This choice will depend on you when you intend to pay the money back, what you will be using the money for and your current financial status (debt to income ratio and credit score). To further help you solve this question, let’s compare the main differences between the two. And, if you want to do some more research after you read this post, Capital One has some great information and tools that can help you determine exactly which option is best for you and what your customized rate and loan amount would be (without affecting your credit score) at CapitalOne.com/home-equity.

Home Equity Line of Credit (HELOC)

If you know that you want to have easy access to your equity, but still have not nailed down exactly how much you will need, this may be a good option for you. Just like a credit card, you only pay on the amount used, once you start using it or request a withdrawal. Although this works similar to a credit card (however you will not receive a physical card to swipe), the interest rates will typically be much lower, thanks to your home securing the amount you are borrowing. Another reason this is a popular borrowing option, especially for entrepreneurs, is because you will only be required to make interest payments during the draw period, then will switch to principal and interest payments.

Home Equity Loan

If you know how much you will need to borrow exactly, then the loan may be what you need. This loan will be a one-time lump sum payment, with fixed monthly payments, that will include principal and interest payments (similar to your mortgage, student loan or car payment), until the loan is paid off. The interest rates on this loan will also be lower than other types of credit since your home is securing the amount you are borrowing. And again, with Capital One, there are no burdensome fees on closing costs and in this case, no annual fee on the loan.

As you can see, these are two really great options to access the equity in your home, depending on your goals for this money and how you would like to pay it back. The loan appears to be a more straightforward option, and the HELOC has a few more stipulations, but more flexibility in withdrawals and payments. No matter what you choose to help you reach your financial goals, be sure to do your homework and determine how much you can handle borrowing. If these funds are used responsibly, it can be just the boost you need to begin bringing your Dreams2Reality!

You can determine exactly which option is best for you, get your customized rate and loan amount (without affecting your credit score) by visiting CapitalOne.com/home-equity.

This is a sponsored post curated by me on behalf of Capital One. All opinions are 100% mine – however, I have always been a huge Capital One fan and hope to use their Home Equity products soon!

Buying your first home is a top goal for many millennials. There are numerous perks of being a homeowner, such as the infamous mortgage interest deduction, and my favorite perk, building wealth over time while keeping a roof over my head! (talk about killing two birds with one stone, although I would never hurt a bird). This wealth building strategy is referred to as your home’s equity.

What is Home Equity?

Your home’s equity is the difference between the current value of your home and the remaining amount of your mortgage. For example, the current value of your home is $300,000 and the balance of your mortgage is $200,000. This means that there is $100,000 of equity in your home. This equity will continue to build as you make monthly payments and as the market value of your home appreciates, and it’s considered to be an asset.

How does home equity work?

Using one of Capital One’s super easy to use calculators you can determine how much equity you can pull out of your house. Once you determine this amount, you can decide if a home equity line of credit (HELOC) or a home equity loan is best for your needs. If you know exactly how much money you will need, a home equity loan may be best, and if you are not sure exactly how much money you will need and would prefer to have access to a line of credit that you can use sort of like a credit card, a home equity line of credit will be best. And, if you are still not sure which option is best for you, the lender will be able to help you make the best decision to support your financial goals, or you can check out Capital One’s handy comparison chart.

How much will home equity cost you?

Believe it or not, using your home equity to access funds can be cheaper than other lending options. Some companies will charge a closing cost on the loan; however, Capital One does not have any burdensome fees. capitalone.com/home-equity.  Your interest rate will vary based on if you select a home equity line or a loan and your credit score. When you begin making payments, just like your mortgage, the payment will consist of a principal payment plus interest. This new payment will be in addition to your current mortgage. So only borrow what you can comfortably afford to pay back in addition to your mortgage.

Are you eligible of home equity?

Your eligibility will be determined based on the current value of your home, the amount of equity in the home, how much you want to borrow, and of course your credit.

Thanks to technology, accessing your home’s equity and determining your eligibility is easier than ever. It’s super easy to access the application online at no charge, get a customized rate and estimated loan amount without no impact on your credit (win-win situation!)

Whether you’re remodeling your home or consolidating debt, Capital One is here to help with simply smarter tools that help you choose the right option for your situation. I have not personally used Capital One’s Home Equity products, however after using their calculators and determining how much equity is in my condo (cha-ching!), it’s something I will be looking at in the near future to begin purchasing more properties!

You can get your customized rate and loan amount, with no impact to your credit score, by visiting capitalone.com/home-equity.

Many people wonder how we are able to own a single family home and investment property in Washington D.C., as well as travel Internationally at least twice a year at such a “young” age. Well, It is totally doable and we want the world to know!

THE GAME THAT CHANGED OUR LIVES

A few years ago we were introduced to a game called Cash Flow and it changed. our. lives. The object of the game is to have your passive income be greater than your expenses so that you can get out of the “rat race” of life. We walked away from the game with a totally different view of what our future should look like. We agreed that we did not want to take the traditional route, and we have been scheming ever since. One day I told someone that I would retire today if I could and they said “You can’t retire yet, you have to pay your dues.” And my response was… “But why? Who do I owe these dues to?!”

Who made that rule anyway? My husband and I are determined to deviate from the norm and get out of the rat race ASAP. Here’s what we are doing to put our plan in motion:

BUYING PROPERTY

When buying a property, the biggest hurdle is the down payment. Saving tens of thousands of dollars for a down payment could take years, but did you know that if you work for the Federal Government you can borrow money from your TSP specifically for the purchase of a primary residence? TSP also allows for General Purpose Loans (which is what we used, since we were using it for an investment property). Yep! You are essentially borrowing money from yourself!  If you are like us, and retirement is years down the road, borrowing money from your TSP is quick, easy, safe, the interest rates are low and the best part is- you are paying the interest back to yourself. If you do not have a TSP account, no worries! Here are a few more methods we used to save money and prepare for buying property:

1. Estimate how much the monthly mortgage payment will be using a mortgage calculator and start putting that amount of money aside, in a separate bank account at least 6 months before purchasing the property. By putting aside this “mock mortgage money” you will ensure that you can consistently afford the mortgage payment and you will build up a nice cushion for any unforeseen expenses after the purchase.
2. Shop around for realtors, loan officers and banks. We did our homework and only went with those that offered the best monetary incentives. Some companies will offer cash back upon closing or cash for opening a bank account.
3. Don’t shy away from short sales and foreclosures- you may find a hidden gem if you look! Just make sure that your real estate agent is well versed in whichever you decide to go with. Also, don’t be fooled by the term “short sale”. Short sales can take months. Ours took 6 months but was well worth the wait!

Another option, that we did not explore, is borrowing money from your IRA. You are allowed to borrow a certain amount without penalty when purchasing a home. Look into the rules and see if it is a good fit for you.

RENTAL INCOME

We bought our duplex investment property back in May. We focused on renovating one of the units right away so that we could start bringing in rental income. During the renovation period, we used the “mock mortgage money” we had put aside to pay the mortgage. Once the first unit starting bringing in income, we were able to put that towards the mortgage as well as the renovations for the 2nd unit.

When it comes to renting out an investment property, there are several opportunities to explore but knowing your market is key. Consider the following options:

• Section 8 Program
• Veterans Housing Program
• Short Term Housing (for interns, etc.)
• Long Term Housing (1+ year lease)

SAVE FOR SPLURGING

We believe that investing in ourselves is just as important as any other investment we make. Owning property does not mean you can’t live well and travel well! We were able to get a custom closet built in our master bedroom, and travel to Costa Rica, Italy and the Dominican Republic all with the money we saved doing the 52 week challenge. This is our absolute favorite way to save for travel and other splurges. The past two years we decided to double the amounts so that we could save more. Try it! You will love the results!

THINK OUTSIDE THE BOX

Just a few months ago we decided to become a one-car household. We sold both of our cars and bought a used car that suited our needs (Well…. that mostly suited my need to fit large pieces of furniture that I find on the Craigslist FREE section. Ha! ). Living in D.C. means we barely use our cars during the week since we take the bus and metro to work. Our cars would sit for days at a time without being used. Remember when I said we were trying to get out the rat race ASAP? This is one of those things we decided to do to get closer to that goal. Now we’ve cut our maintenance, and insurance costs, and we got some cash for selling our cars. What’s even better is- we used the cash to invest back into our rental property! When it comes to cutting back on monthly bills, think outside of the box! Perhaps you can get rid of cable, downgrade your phone bill, or pack your lunch during the week. Don’t be afraid to make small sacrifices today, that will put you in a better financial situation tomorrow!

Owning a home, investing, saving and traveling the world are all within reach and you do not have to sacrifice one for the other! If you have any questions, or just want to say hello, our email is: thecncproperties@gmail.com

-Kendra

Kendra is an Economist by day and the owner of Aisle Always Love by night. In her spare time you can find her thrifting, conquering a new DIY project or baking some gluten-free goodies. Kendra was born and raised in Virginia and now resides in D.C. with her husband Reggie.