March 29th 2023.
Tyrese Gibson is instructing homeowners in the value of equity.
On a recent episode of the R&B Money Podcast, the 44-year-old discussed understanding the significance of equity after selling his first home. He told hosts Tank and J Valentine that, due to being signed to RCA Records after being courted by 20 other labels, he was only 16 when he purchased the house.
When Valentine questioned how sizable the bag was, Gibson was reticent with his answer: $2.5 million. “But Andre didn’t provide the bag. RCA gave the bag.”
While that sum seems like a lot in the mid-90s, Gibson explained that it depended on the budget.. He recounted a conversation with a colleague he referred to as “The Big Homie” who encouraged him to invest because you never want to think “shoulda woulda coulda.” With that sound counsel and what was left of his money, Gibson acquired a four-bedroom, two-car garage home, for $197,000, in the California suburbs of Hawthorne.
More than 10 years later, the “Sweet Lady” singer sold the house and learned from his Realtor what equity really was. “I knew nothing about business, I knew nothing about real estate, and the lady said, ‘Oh, you did really well on this house,” Gibson stated. Puzzled on what she was alluding to, he requested more details. “You got a lot of equity. The house was bought for $197,900, but now it’s worth $415.”
“The house is paid for and when you sell your house, you’re going to be able to get a much bigger number. It’s equity.”
The lesson illustrates the significance of education for young homebuyers as various programs are being created to teach.
In California, Black homeownership reached its peak in 2004 with a rate of 50.98%, but decreased compared to other racial and ethnic groups in the state. Last year, the Bay Area Black Housing Advisory Task Force backed the community with the “Bay Area Regional Black Housing Fund” initiative, which helped rectify the injustices that shaped the housing experiences of Black people in the Bay Area.
The takeaway is to make sure to be knowledgeable of the equity potential in a home before making the purchase. Taking advantage of programs that provide financial education can help those looking to get into homeownership.
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