How Real Estate Investor Nana Used One Rental Property to Bankroll the Next

Nana knew early on that owning real estate was something that interested him. His parents had moved from Ghana to Massachusetts, and made a home for their family in an apartment in Worcester. As a kid, he would watch in admiration as the landlord of their apartment came and went in his Mercedes-Benz.

So years later, when a real estate agent handed him a book about being a landlord and pointed him in the direction of a multi-family building for rent, Nana jumped at the opportunity, and followed the same route that so many first-time investors do. He lived in one of the units while fixing up and renting out the others until he had the funds he needed to purchase a second property for himself.

By his mid-twenties, Nana owned multiple properties around Worcester, and had the skills to make many home repairs and renovations himself.

When opportunity knocked to split the next rental property with his brother, Nana was all in — but so was his cash flow.

“We paid [for] the property [in] cash, so we were a little bit out of funds,” said Nana, who knew the rental unit needed renovations before they could find tenants. “[My brother] was able to come up with his half, so I said to myself, how do I come up with my half?”

Some of his other rental properties had equity, so he began searching for financing solutions and lines of credit to access it. Each of his options included funding timelines that would delay his renovation plans, and required a cumbersome amount of paperwork.

So when he found Hometap and read that he could receive his equity in cash in about three weeks after applying online, he was interested, but also skeptical.

“No way is this real,” he recalled thinking. “No one’s going to give you funding without looking for your paycheck; without asking for all these documents.”

Nana went ahead and requested an Estimate anyway, deciding he had nothing to lose. Within minutes, an Investment Manager at Hometap called and walked him through the Investment and funding processes.

A Hometap Investment was checking boxes that the other financing options he looked at hadn’t. No interest, no monthly payments, and funding that would allow him to start on his renovations almost immediately.

“It was a great experience working with Hometap, from the first call all the way through to me receiving the funds,” said Nana, who had his cash in-hand about three weeks after accepting an offer. He and his brother got right to work with the renovations, and tenants moved in soon after.

“I think Hometap is a great resource for homeowners that are looking to pay off some debt, build their credit up, build their business, or build a real estate portfolio like myself.”

Nana was so impressed with his experience, that when the opportunity arose to join the team of Investment Managers at Hometap, he took it. Surprised by how many of his peers had, like him, never heard of home equity investing, he looked at the role as an opportunity to educate other investors — and homeowners — about the unique solution Hometap provides. Now, as an Investment Manager, he’s able to speak to the ease of use and seamless funding process from the unique perspective of a homeowner that’s experienced every step of an investment firsthand.

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David Leveraged His Equity to Fund an Investment Property

It’s a good time to own property in the Grand Canyon State. Home values in Phoenix have grown faster than any other U.S. city year over year from 2019-2020. 

With property values increasing at historic rates and an influx of people moving to the west side of Phoenix, David and his wife knew they had an opportunity to add another income stream in the form of an investment property — but only if they could act fast and obtain substantial capital given the increasingly competitive real estate market.  

Having just recently refinanced, David knew he’d likely need to put their investment property plans on hold for a while to secure the funds with another refinance. But waiting meant watching the home prices grow and inventory shrink. That’s when David discovered Hometap. 

“When I heard the [radio] ad, it was the first time I’d ever heard about that concept of selling equity and basically taking on a partner in my house,” said David. 

David had been through the process of utilizing a home equity line of credit (HELOC) before, too, so knew he was looking at a 6-7% interest rate if he went that route. 

Self-employed and working for the family business, the lack of a standard W2 could add another challenge to the refinance and HELOC application process. He continued to mull over his options. 

“I couldn’t do a refinance because I just refinanced in September. It would have cost quite a bit to do a refinance within that period of time, even though the [home] value had increased,” said David. “And there wasn’t much chance of getting a better interest rate because it was already at 2.99%. Unless I was to move to a 15-year term…which in that case would have made my payment much higher than I would’ve wanted.” 

After walking through several scenarios with his Hometap Investment Manager, David had made his decision. On top of being a solution with no monthly payments or interest, Hometap’s 20% annual appreciation cap and downside protection put him at ease.

“The Hometap route was attractive because of no ongoing payments, I had a view of opportunity costs and [I had an] underutilized asset. [That] was a motivating factor, as well as accessing the equity in a timely manner without tacking on additional monthly obligations.” 

After a few weeks, David and his wife closed on a Hometap Investment and began shopping for their investment property.