Stripping Equity!!

Stripping Equity!!Who ever thought that was a good Idea?

The other day Jay and I were attending a dinner party at friends home in the Provo River bottoms. If you are familiar with the River Bottoms then you know that it is one of the wealthiest neighborhoods in Utah Valley. The homes in this particular neighborhood start in the low millions. Needless to say they are huge, elaborate homes with alot of worth. We noticed that there were alot of homes that had been let go and were overrun. the yards were dead and the actual homes were in disrepair. We inquired about these homes and our friend told us the that these were some of the homes that were apart of the big stripping equity scandal. What a shame that these beautiful neighborhoods have been compromised by others greed and stupidity.

A few years ago Jay and I looked into doing this very thing and even did strip some equity from one of our rental properties. It worked out well for us and paid huge dividends, however we felt a little nervous about leveraging our properties and decided never to do it again. Boy was that a smart decision. Today in light of everything going on in America's economy we are sure grateful we didn't follow the trend.

History has taught us that we can never really rely on the economy. The housing market always has it's Ups and Downs. Here's a good piece of advice, if you are going to invest, do it in something that has a good track record. There is no quick way to gain wealth and keep it. You must be smart. Jay is a "Venture Capitalist" and has been lending money to start-up business's it never ceases to amaze me how many smart people there are out there, including Jay. Fortunately he can recognize a good investment or a good business Idea and is not looking for the fast track, just the smart and safe road to financial security. And yes there is risk involved but that is the case with any new business or investment. But remember there is a difference between risk and stupidity. Equity stripping defiantly fits in the stupidity category, we know, we tried it, it doesn't work. Just an observation.