Equity and wealth are the same when it comes to real estate. Equity in real estate is the market value of the property minus all the debts in it.

The different ways are as such:

1) Value add- adding value by primarily increasing the rents of a multi unit property / fixing the property within a reasonable budget so the property will be worth more when you sell it.

Example: You buy a 4plex for $200,000 (the rents are $500*4 units when you buy it) , you make sure to fix what needs to be fixed (some things are not needed to be fixed) and then you increase all the rents to $650 (once the lease expires you renew it for $650 or once the tenant move out - you find a new tenant paying you this amount), essentially what you have done is increasing $150 rent (value)*4 units= $600 more monthly cash flow (value). Will the property be worth more as a result of your ability to increase it's income by $600?- OF COURSE! this is called forced appreciation , meaning you didn't wait only for the PASSIVE market appreciation to increase the value of your property but rather you acted actively by "forcing" an appreciation of the resale value by increasing the rents. From experience - increasing rents tend to add around 15% more value to the property.

After you increased the rents of at least 3 units out of the 4 units - i recommend to wait six months to three years to let the estimated (not guaranteed) passive market appreciation to boost the value of your property before you sell it. At the bottom of the page is a historical trend of the market appreciation for multi families in Killeen (25 miles radius including Copperas cove, Harker Heights, Temple ( for 2015-2020. i recommend to choose a month and compare it the same month in the year prior. Lets take the month of july , so in the month of july 2015- the median multi family was for around $155,000, then a year later in july 2016 it was $158,900 and then on july 2017- it had a very increase of $203,000, then in july 2018 there was a declining correction to that high increase for $175,000 and then in july 2019 it went up to $209,000,

As you can see the market has appreciated in four years from $155,000 to $209,000 which is $54,000 appreciation (34.8% appreciation ) or 8.7% appreciation a year.

Lets get back to the example above of you buying a property for $200,000 and you sell it after two years with a forced appreciation of 15% plus an estimated 8.7% of market appreciation * 2 years for a total of 32.4% appreciation that's a sales price/ value of $264,000, so you earned in this example $64,000 because your equity has increased in $64,000.

Out of that, you will have to deduct about 5-7% expense in closing costs, so lets say you only had a net profit of $50,000- that is an excellent capital gain (appreciation ) profit in addition to the profit from cash flow you have earned in the past two years and in addition to the principal reductions of the mortgage balance (I assume you got a mortgage)

Now, imagine you repeat this process 10 times? - That's an additional 10 * $50,000 = $500,000 more wealth / equity / net worth.!

Examples of 4plexes I bought and sold using the value add strategy:

1)3005 Cantabrian dr Killeen- Bought in mid 2017 for $ 185,000 and sold in mid 2019 for $244,500. Capital gain profit : $59,500

2)3403 Toldeo dr Killeen- Bought in oct 2017 for $145,000 and sold in mid 2019 for $228,000. Capital gain profit :$83,000

3)1405 Dugger dr Killeen- Bought in early 2018 for $195,000 and sold in mid 2019 for 254,000, Capital gain profit: $59,000

4)2811 Cantabrian dr Killeen- Bought in end of 2018 for $192,000 and sold in early 2020 for 261,000. Capital gain profit: $69,000