Renovating Retirement With Charlie Jewett

For the second episode of the series Cash Flow & Investment Strategies for Real Estate Investors, Charlie Jewett and Bobby Alford dive deeper into equity, the most misunderstood asset class in the financial industry. Home equity As discussed, home ownership is the biggest asset in people’s lives. If that home ownership develops into an asset class, then that becomes the most held asset, and that asset is equity. Home equity or equity in real estate is defined as the difference between the value of the house and what you owe. How do you put this home equity to work for you? Two ways to be debt-free: Traditional vs balance sheet method Traditional method says be liability-free and that you should pay off your mortgage as fast as you can because mortgages are bad. These strategies come from only looking at one half of the equation and not the other half that is looking into the opportunity cost of the money – every dollar you choose to put into that home to save that cost over 30 years is a dollar that cann