Newbie Question - How to leverage primary residence?

[Brenden Koon]

Hello BP moguls! I've been a fan of the BP podcast for about a year now and am finally joining the community here! It's already been a great source of experience and information for me and I'm so excited to get started. I have a question on strategies to get my first investment property, which I would like to be a multifamily rental.

So here's the deal: I bought my primary residence about a year ago (before I switched my mindset from Dave Ramsey to Bigger Pockets haha) with 20% down. Now that I have learned how to calculate cash flow, I have realized that my primary residence would not make a good rental. What are my options here? The way I understand it, I could either get a HELOC and tap my equity to use as a down payment for an investment, or I could sell my house and buy a house hack (but I would have to pay capital gains tax on the sale - my house has appreciated ~10%). Am I missing anything?

[Robert Williams]

Brenden is a great name!(Named my second son Brendan). I'm new as well, less than a month, but I just found out about Appreciation Sharing/Home Equity Investing yesterday. It's where someone pays you for a portion of your future equity. Nothing due until the term ends (10 -30 years) or until you sell the property. There is not a ton of information out there. But seems like a possibility and you may even be able to find a family friend that is willing to do this rather than a straight up loan for your first property. HELOC is an option, but you may only get 65-75% of the equity, not the value. I'm on the path of going until I find someone willing to give me what I need on my terms. It's a ton of work but I am sure it will pay off for you.