Building equity in your home unlocks massive leverage and cash flow, but thanks to an antiquated system, very few people ever get to put that to use.
With $17.8 trillion of equity in single family homes, and 14.7 million homeowners with 50% or more in equity, this is a huge untapped asset class that’s right in front of us. Most people think the only way to leverage their equity is through a traditional bank loan, which they shy away from because it involves assuming more debt with monthly repayments. Fortunately there is a better way.
Equity-based financing allows us to access cash without eroding the upside with monthly payments. The idea is to make the equity in our homes work for us so we can actually live a better life and have more passive income, without the burden of structured debt.
How is this model different from the traditional model of borrowing on your equity from the bank? What is the difference between good debt and bad debt? How can we use our equity to improve our lives and reach more of our financial goals?
In this episode, I’m joined by serial entrepreneur, author, founder and CEO of QuantmRE, Matthew Sullivan. He shares how his company helps people take advantage of home equity with less downside, and what working with Richard Branson taught him about business.
Watch the Full Episode:
Home equity is a large, concentrated, non-financial, non-cash flowing asset. We’re just helping people sell some of that asset and move money from their equity account into their bank account.
– Matthew Sullivan
Three Things You’ll Learn In This Episode
Debt-based financing vs. equity-based financing
The biggest issue with unlocking the equity in your home is that we can traditionally only do it by taking on more debt and eroding our wealth in the process. An equity-based model takes a different approach because the investors are partners in the ownership of your home, rather than lenders, so you don’t lose your base equity.
How some people are able to predict economic shifts and downturns
For many people, the occurrences of this year have been a shock and seem to have come out of nowhere. When it comes to the economy, things are not truly unprecedented if we know the signs to look for. If we observe the trends and shifts of the past, we will see faint signals of what’s going to happen in the future.
Why small private funds are an easier way to access money for deals
Regulation D and Regulation S exemptions are fund structures that someone can get started with quickly. The regulatory burden of this fund is very light, making it a great wealth building vehicle even for people who are just starting out.
Matthew Sullivan is a serial entrepreneur and founder and CEO of QuantmRE. He is also the founder of Crowdventure.com and co-founder of two real estate funds. He spent a number of years working alongside Richard Branson and the Virgin corporate finance team in London, UK, where he was appointed a director and Trustee of Virgin’s London Air Ambulance.
Matthew went to Westminster School in London, UK and studied Law at Birmingham University before pursuing a career in finance and stockbroking, specializing in the South East Asian markets. In 1997 he chose an entrepreneurial path and founded Europe’s first internet billing application service provider.
Since then he has founded and led companies in the United Kingdom, Australia and the United States in the finance, telecommunications, technology and real estate sectors.
Matthew is also the author of Head First – A Roadmap for Entrepreneurs, host of the Hooked on Startups podcast, and holds a private helicopter pilot’s license.
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