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Your home is more than just a place to live — it’s an investment, perhaps the best-performing investment you have (or the worst, if property values in your area have dropped dramatically). As you pay down the principal on the mortgage, equity in the home grows (assuming that the house appreciates). Equity is your home’s net worth — if you sold the home today and paid off the mortgage, equity is the money you would stuff in your pocket.

You don’t have to sell your home to pocket the equity. By refinancing the home or taking out a home equity loan, you can unleash the equity and use it (or a portion of it) as investment capital to finance your house flipping venture. I cover both these options, along with the risks of unleashing equity in your home, in the following sections. Further on in this chapter, I show you how to work with banks and other lending institutions to unlock the equity in your home.

 If real estate values drop, you may owe more on your home than it’s worth. If you have to sell it, you’ll end up selling it at a loss.