Sweat Equity | Work Credit by Owner
Definition of "Sweat Equity"
What Is Sweat Equity?
Sweat equity is the term used to describe the time a homebuyer volunteers.
You need to be very careful with sweat equity because each person that receives it becomes a partial owner. Thus not only do you need to choose a good resource but you must also choose good partners. You need a good contract.
If you want to own your own home (or some rental property for extra income), and have a great work ethic but not a whole lot of cash, a fixer-upper can be your best bet. It’s important to make sure you get the right fixer-upper, though, and not something that needs a little more fixing or investment than you’ll be able to handle.
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