How One Investor Used Home Equity to Buy a Second Property
- By Jim Blackburn
- on

Client Profile:
- Name: Darnell
- Age: 41
- Occupation: Middle school principal
- Goal: Use equity from his first home to buy a rental
- Location: Charlotte, NC
The Situation
Darnell purchased his first home 6 years ago for $265,000. By 2023, it had appreciated to $370,000, and he had paid the loan down to $221,000 — leaving nearly $150K in equity.
He was itching to get into real estate investing but didn’t want to give up his low mortgage rate or disrupt his family’s living situation. We walked him through the Equity Access Strategy Planner and modeled two options: cash-out refinance vs. a home equity loan.
The Strategy
We helped Darnell:
- Keep his original mortgage at 3.5%
- Open a home equity loan for $60,000 at a fixed 6.99%
- Use $50K as down payment + closing costs on a $270K turnkey single-family rental
- Reserve $10K for improvements and vacancy buffer
His total mortgage obligations remained affordable, and the rental cash flowed immediately.
The Numbers
Metric | Result |
Home Equity Loan Payment | ~$474/month |
Rental Income (gross) | $2,150/month |
Expenses (loan, taxes, insurance, mgmt) | ~$1,460/month |
Net Cash Flow | $690/month |
Equity in New Property (Year 1) | ~$11,000 |
Tax Write-Offs | ~$4,800/year |
The Results
Darnell now:
- Owns two appreciating assets
- Generates $8,000+ net passive income/year
- Has a long-term plan to leverage both properties to buy a small multifamily in 2–3 years
What Darnell Said
“I was sitting on equity for years, not realizing I could use it to buy another income stream. This one move changed my whole wealth trajectory.”

Takeaway for Readers
Your equity isn’t just sitting there — it’s waiting to be activated. With the right strategy, you can use it to expand your portfolio without risking your home or rate.
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