December 2023

Rents Show Biggest Decline in 3 Years—Should Landlords Panic?

Redfin’s November rent report is out, showing that median rent prices declined by 2.1% year over year. This is the biggest decline since 2020, and renters nationwide will breathe a sigh of relief. Landlords and investors? Perhaps not so much, although there are regional variations that are worth exploring if you’re planning on investing in real estate in 2024. 

Asking rent prices have been dropping steadily since May 2022, when the median U.S. rental price shot up to above $2,000 per month. At that point, rents were growing at a monstrous rate of 15% year over year as a result of the pandemic-induced scarcity of available rental homes.  

The situation now is very different. The severe supply-demand gap has been steadily closing over the past year and a half, with new construction boosting supply—to the point where some landlords have been struggling to find tenants and offering rental concessions such as the first month rent-free or free parking. The rental vacancy rate rose to 6.6% in the third quarter of 2023, the highest level since the first quarter of 2021, which was during the era of COVID pandemic restrictions. 

More Renters, Lower Rents

The apartment building sector is gaining momentum. New construction of apartment buildings rose by 7% year over year in the third quarter of 2023 to a seasonally adjusted rate of 1.2 million. This is the highest rate in the past 30 years. New construction starts in the sector are declining somewhat, falling 26.2% year over year in the third quarter, but the overall rate of new starts that have just begun is still historically high, standing at 1.2 million. 

Redfin chief economist Daryl Fairweather interprets the data as a sign that ‘‘rents have started falling in a meaningful way. Rising supply […] means renters have more good options to choose from.’’

Rising supply isn’t the only reason why rents are falling. There are larger socioeconomic factors at play. The biggest one is, of course, the nationwide shift toward renting as a longer-term option as homeownership becomes less and less affordable

Currently, 1 in 3 people in the U.S. are renters; they rent for longer than before and are older than ever before. This trend toward longer-term renting is changing the status of renting from the short-term stopgap option before homeownership to more of a valid lifestyle choice. Fairweather says that ‘’with homeownership so expensive, renting has started to lose its stigma.’’

The ongoing uncertainty about the economy is also contributing to declining rents. People are becoming more cautious about spending and a little more conservative about what they consider a reasonable amount to spend on rent than they were even a year ago. 

What Does This Mean for Real Estate Investors?

If you’re a real estate investor and these trends are making you nervous, there is a silver lining: The rental market is not uniform, and apartment buildings represent only one segment of it. While this segment is currently on a downward trajectory, Redfin predicts that 2024 will be a good year for the single-family home segment of the rental market. That’s because there aren’t as many single-family homes available to rent, while demand for this type of rental is growing. 

This growth is driven mainly by millennial renters, many of whom are still priced out of homeownership but have a real need for more spacious family housing as they start and grow families. Family homes are also popular rental options for millennials who prefer working from home and sharing a house with friends.   

As an investor, you should also consider the ever-prevalent regional differences in the rental market. While rental prices are declining overall, they are steadily growing in the Midwest. Rental prices in this region climbed a very healthy 4.6% year over year to an average of $1,434. Parts of the Midwest are experiencing something of a housing boom, with many renters attracted by the overall affordability of the region.

It’s a very simple pattern: As the economic outlook worsens and people become more aware of their spending, they look for cheaper areas to live. This migration causes rental prices to rise in the now-popular region, while the expensive areas experiencing the exodus see falling prices. Currently, all other U.S. regions are seeing these declines, following years of unprecedented rent increases during the pandemic.  

Want to know the one place you should be looking at as a real estate investor right now? It’s Milwaukee. This Midwestern city is seeing a robust demand for affordable rentals, partly in response to the increasing unaffordability of homeownership. Owning a unit here is a sure bet, according to local Redfin real estate agent Keisha Tally: “Every time one of my own units goes vacant, I get a ton of applicants.” 

The Bottom Line

Identifying locally booming markets is a must for any investor right now, as these will continue offering opportunities for a reliable rental income in 2024 and beyond.

Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

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How to Start Thinking, Acting, and Investing Like the Rich

Everyone wants to know how to get rich. And here’s the truth: getting rich might be much easier than you think. While most people would assume the wealthy grind their way to success, this isn’t always the case. In fact, rich people are FAR lazier than you think, and we’re not saying that in a bad way. Rich people make money while they sleep, so they don’t HAVE to work harder every day. Want to know how you can do the same? Vivian Tu, AKA “Your Rich BFF,” will show you how!

Vivian grew up with super-saver immigrant parents who taught her the value of money. When she went off to college, she realized a whole new world of wealth existed—this was only multiplied when she became a Wall Street trader. Vivian saw the fancy suits, the designer bags, and the jewel-studded bracelets and realized that these “rich” people were doing something most people didn’t know about. After her friends and coworkers wouldn’t stop asking her for financial advice, she decided to take her knowledge to the masses.

In her new book, “Rich AF: The Winning Money Mindset That Will Change Your Life,” Vivian details what the rich do that you (probably) don’t. These habits of the wealthy can change your life and upgrade you from the position you’re in now. In today’s episode, we talk about the tools you can use to get rich, why you’re playing real-life Monopoly all wrong, and how rich people think to build wealth even when they’re not working.

Hello, listeners, and welcome to the BiggerPockets Money podcast where we interview Vivian Tu from Networth and Chill and talk about her new book, Rich AF. Hello, hello, hello. My name is Mindy Jensen, and with me today is the Shewolfeofwallstreet, Amanda Wolfe.
Amanda, I’m so glad you could join me today. Thanks for

Having me. I’m excited to be here.

I always love talking to you, Amanda.


Amanda and I are here to make financial independence less scary, less just for somebody else, to introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you starting.

Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate or start your own business, we’ll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams.

Okay, Amanda, I am so excited to talk to Vivian today because she has a great framework for not only becoming rich, but also a great way to think about being rich and growing your wealth and ways to invest so that you can join the rich people club too.

Yeah. And I loved her book so much and I’m so excited to talk to her because I think that she had a really refreshing, unique spin on money mentality stuff and thinking rich. I’m a total self-development money junkie. I read all the books and I really liked the way that she broke things down. She broke things down in a lot of analogies and storytelling, which I find really helpful for me to retain information. So I’m super excited to talk to her today. I thought her book was awesome.

Exactly. Yeah, this is a really engaging book and I’m excited to talk to her. But before we bring in Vivian, let’s take a quick break.
And we’re back. Vivian is an ex Wall Street trader and is now the founder and CEO of Your Rich BFF Media and the host of the podcast, Networth and Chill. Vivian produces educational financial content on TikTok, Instagram and YouTube with over 5 million followers across those platforms.
Vivian, welcome to the BiggerPockets Money podcast. I’m so excited to talk to you today.

Thank you so much for having me. I’m so excited to be here.

Vivian, for those who don’t follow you yet on social media, can you tell us a little bit about yourself?

Yeah. I am the daughter of two immigrant Chinese parents. I grew up in the suburbs of DC, went to school in Chicago, and when I graduated, I started my career on Wall Street. That is my big tagline, your favorite Wall Street girly. I started as a trader. I traded equities. And I did that for a while until I realized that that job wasn’t the best fit. I wasn’t making the kind of money that I had seen in the movies and I wanted to do something that was a little bit more creative, but also where I could just get paid more.
I ended up moving into the tech and media space. And there, all of my new friends wanted to hear more about what I was investing in, should they put money into our company 401k, what kind of health insurance to buy. And I ended up creating educational content to put on the internet because they wouldn’t stop harassing me about it. And as it turns out, a lot more people needed that information than I had anticipated. And very much, the first video I put up went viral, like that, and overnight I became your rich BFF.

Well, I love that. So growing up, what was your relationship with money and how did you start to educate yourself?

I would say my parents were really good at saving. That’s the story of so many immigrant parents. My mom was a coupon clipper. I would sit there and cut them with her and we would wash Ziploc bags. And in our kitchen there’s a drawer with one big trash bag with a bunch of smaller grocery bags in it, and we save all the bags. We’re bag people. But what that ended up teaching me was to really, really value a dollar and how hard somebody has to work to have that dollar. So I’ve always been really good at budgeting and saving, and I’m certainly not someone who’s been a frivolous spender in the past.
But going to school in Chicago, I went to the University of Chicago, I grew up in what I would consider a upper middle class neighborhood. I would say, in that neighborhood, my family was probably slightly below average in terms of wealth. I got to college and I saw a level of wealth that I had just never seen before. It really, really led me to feel like I had to do certain things to keep up appearances, which frankly, if you don’t got it like that, you’re just never going to be able to keep it up. So I would say I probably made some money mistakes in college, spent some money that I certainly shouldn’t have on things that I didn’t need to impress people that I didn’t even like.
And it wasn’t until I graduated and got my first big girl job full-time, I was working on Wall Street, that my mentor, my very first manager took me under her wing and she was so cool and everything I wanted to be, new Chanel bag, new pair of Gucci stilettos every single day to work, would clickity clack in on the way. And I was like, wow, I want to have that. But she was also the first person who explained investing in a way that I understood. And she was like, “Listen, I grew up, my family ran a Chinese restaurant. I didn’t come from money.” She had a very similar background. She went to Stanford on scholarship, did not have money like that, got this kind of job and she had to learn things the hard way. She was like, “I did not contribute to my 401k for the first five years of my career because I couldn’t afford to. I literally was hand to mouth.” And she’s like, “I know that’s not the case for you, so you need to be doing this.”
And so she was really the first person who encouraged me to use investing as a tool to grow my wealth versus just scrimping and saving and cutting out every single purchase that brought me a tiny ounce of joy in my life.

So it sounds like she was really a pivotal moment in your life as it relates to finance. So you did the couponing and the reusing of the paper bags and probably the containers for your Tupperware type life and then know what we know. So then you’re exposed to all of this great wealth. You’re working on Wall Street. So what made you decide that you wanted to get into the personal finance education space and start your platform, Your Rich BFF and Networth and Chill?

Yeah. I was working on Wall Street and I was working for my manager who I loved so much, but I ended up getting switched over to work for somebody else. And this new guy was just awful. He treated me badly. I was not given the respect that I deserved. And frankly, he was a chauvinistic pig who would say racist things. Like when I would wear a long cardigan to work, he would ask, “Is that a kimono?” and touch his hands and bow at me. And it was just really, really inappropriate. And I knew that he wasn’t ever going to be my advocate, but more importantly, he was never going to pay me. I was never going to get the money that I had been promised for sitting 14 hours next to an insufferable man to then have to go to a client event after work. All of the things that I was promised I wasn’t getting, and I was like, well, I’m going to get them one way or another, whether or not it’s through this traditional corporate financey route.
So I told my mentor, I was like, “Hey, I am not cool with this. I’m about to leave.” And she was like, “No, no, no, do some interviews.” I ended up interviewing with her best friend who ended up becoming my first manager, and I moved into the tech media space in strategy sales at Buzzfeed. And there, I made a lot of new friends who wanted my advice, who wanted a recommendation on what they should do, should they buy the company stock options, should they select this fund over another in their 401k portal. And because it was so crazy to me that so many people had the same questions, I just started making videos so I could refer back and be like, “Hey, guys, if you have this question, just go watch video seven at the lunch table.” I didn’t mean for it to become a whole business and take my job into the entrepreneurship realm like it did.

So You wrote a book called Rich AF, that’s what we’re going to call it today. Rich, can you tell us about this book and why you chose to write this at this time and who did you write it for?

Yeah. I felt like there had been a slew of really, really classic OG finance books that had served my parents’ generation really well. But knock, knock, welcome. It’s 2023. It does not look the same anymore. The landscape is not the same wages of stagnated. The price of housing has tripled. The price of an education has 10x. We do not live in the same reality that our parents live in. And on top of that, I think it’s been easy for some people for a while. They’ve been playing on tutorial mode. If you are a old rich white guy, you can get into your little time teleportation machine and go back to any time in the timeline. As a young Asian woman, there are some time periods that I cannot go to. If you are a Black person, there are some real time periods you cannot go back to. If you are a gay person, there are many times that you cannot go back to.
And I think that speaks volumes to the access we’ve all had with financial information for some time as well, because for so long, financial services has only catered to people who are already rich, likely white and likely men, and that’s not fair. I wrote this book to teach personal finance to people who I like to call my audience. I’ve lovingly dubbed them the leftovers. They are the people that the financial services industry has left over. These are women. These are people of color. These are the LGBTQ community. These are people who grew up low income. These are people who may not have gotten that education because they grew up with money trauma. And it’s so important in particular for those communities to learn about this because that is how you build up overall in those demographics because when you put money in those pockets, that money gets reinvested. And so it’s important to not concentrate wealth just with people who already have it.

Right. And that’s definitely what continues to happen within generations. And I think that we can probably all agree that financial literacy is quite often missing in most households and schools in the US. So can you talk to why financial literacy is so important, why it’s never too late? Because I think that’s another one too, right? Well, it’s too late for me, so I’m just going to set my kids up. Or does it even make sense to start now? Can you talk a little bit about that?

Yeah, absolutely. It is a damn shame that you are legally obligated to go through 12 years of education, so first through 12th grade. I don’t know kindergarten’s mandatory, but you have to go through school. If you don’t take your kid to school or if you don’t homeschool them or they’re not in some sort of education, you as a parent can get in a lot of trouble. You then expect them to get the education they deserve in those schools. And I’m not putting this on teachers, certainly not because they are bound by what is federally and state mandated. And financial literacy is not a federally mandated subject.
So I’m out here in my biology class learning that the mitochondria is the powerhouse of the cell sick. You know what? I didn’t become a scientist. I’m out here learning that the Pythagorean theorem exists. I’m learning sign, co-sign, drawing triangles. You know what I don’t do? Draw triangles for a living. You know what both a scientist and a mathematician and literally anybody who makes money needs to do? Pay taxes, legally speaking. That would’ve been nice to know how to file a tax return because the first year I did it, I thought I was going to jail. And it would’ve been nice to know how to make a budget because the first year that I moved to New York City, was working on a Wall Street salary, I was living paycheck to paycheck. That’s bad. And I think about all of the people who didn’t make as much money as I was making living in New York City, which is many people. How are they doing it? Because we’re not taught how to do these things in school.
So of course, the people who know the secrets, the rich people who’ve already got this game figured out, they’re going to pass those secrets down one rich person to the next down their generational line and that same family, just because great-great-great-great-great-grandpa owned a railroad, now the entire family’s just set forever. I don’t necessarily think that makes sense. I think there needs to be class mobility in a place like America, but also just across the world because, what is the point of working hard or dreaming of a better future if there is no class mobility? If the ability to work harder to make more, to have a better life does not exist, what’s the point? So I think that’s really, really important.
And then, in terms of people fearing that it’s too late and like, “Oh, I’ll never be good at this. I’m going to just set my kid up,” I think wanting to set your kid up for success speaks to you being a great parent. Of course you should want that, but it is never, ever, ever too late for anybody to finally figure out their finances, to get good with their money because you owe it as a service to your children as well as yourself to get yourself in the best financial position possible.
Because you know what happens when you are like, “Oh, I’ll start helping to save and invest for my kids, but I’m not going to do anything for myself”? When you become too old to work, that burden will fall on someone else, and likely it’ll fall on your loved ones. And I would hate to be a burden, and I hope people don’t think of it that way. I hope people are like, “Well, I’ve done a good job raising my kid. They love me. They’re going to take care of me.” But you should want to be able to take care of yourself. The hope is then, even if you can take care of yourself, your loved ones love you enough to want to take care of you, but it’s important to want to set yourself up for success as well as your kids.
So I really don’t think it is ever too late to learn about finances, to learn about money. The best day to get started was yesterday, but today is the second-best day. So the sooner you can do it, the better.

I love that. My daughter is a junior now in high school, and her freshman class was the first class in Colorado that was required to take 0.5 credits of personal financial literacy classes to graduate. But I am very excited not only for this class, but going forward, I’d like to see it be more than just 0.5 credit hours to graduate.
And reading your book, you had a really great analogy about playing Monopoly, and I totally identified with your stance on playing Monopoly because I never read the rules. Somebody taught me how they played Monopoly. “Oh, you just go around the board and you collect $200 every time you pass go.” So that’s what I did, and I have never put a house. Can you explain this analogy for audience?

Yeah, absolutely. The way I like to think about it is that life, very literally, is a board game. And most of us learn how to play the board game of life, in this case, Monopoly, the same way that we learn how to tie our shoelaces or learn how to hold a pencil or what kind of foods we like. We learn from our loved ones, our guardians, our parents, and you’re not reading the rule book of life. You are not looking up every single law that you could potentially break on the police department’s website. You’re just doing what the people around you are doing because you’ve learned, okay, if I can have a nice life, I can do this, dah, dah, dah, dah. But the thing is is that some people are taught every single rule and then taught when to use those rules and when to build a house and then to turn that house into a hotel, and should you buy the railroads, and what happens when you get sent to jail, and when you pass go, what are some secret things you can do to make sure that you’re collecting your $200 but still getting to roll again.
There are so many intricacies when it comes to our personal finances that the vast majority of us don’t know about. And even if we do know about, we don’t know how to effectively use. And that’s the difference between knowing the rules and having a strategy.
So it’s not just about understanding, oh, the max contribution of a Roth IRA for the 2023 tax year is X, Y, Z. Frankly, I’m someone who can hardly remember those figures. Every single time I talk about a certain type of account in my content, I got to Google, what’s the contribution limit again? And that’s okay because it’s not the number that matters. It’s not those figures that matter. It’s about teaching somebody how to fish versus just giving them the fish. You want to be able to be financially literate. And I say that not like knowing every fact about finance in the world, but being able to do the research and get to an answer for every question you have.
So you need to understand what something like a Roth IRA does. You don’t need to remember all the facts and figures of, what’s the income limit? How much money can I put into it? What happens this? You can look all of that information up. You don’t need to memorize it. And every year, likely it’s going to change. So what’s the point? But you have to understand that having one can help you save and invest for your retirement, you acquire some tax benefits, and there are some other cool things that you can spend that money on along the way that you can take that money out for penalty free. And you got to know that. And so I think it’s very much about learning how to strategize your life versus memorizing every single rule.

I love that. It’s the teaching you to fish, but it’s also knowing what to look up, right?


So it’s, what is a Roth IRA? Maybe I have to start there. I love that. And then you have another point in the book that I really love that says that rich people think differently. And I love that. Think it’s so true. So can you tell us about how rich people think differently?

Oh, there’s so many different types of ways that rich people think differently, and I outline a lot of them in my book. So please, please go pre-order, go buy. You can find the book at Yes, I made the URL a manifestation. But what I think is really, really key is a sense of entitlement. I always talk about this. My parents came to this country and they were focused on survival because they were immigrants. But I was born here, baby. I got a blue passport. What are you going to do? Where are you going to send me? I am entitled to be an American and live my best life. And I know that. I trust that.
And I don’t mean be entitled by harassing the poor person working at the the cash register at the Burger King. That’s not what I mean. Don’t be a Karen. But what I am saying is rich people understand the value of what they have. No matter how much money, no matter what, they understand the value. They know what they can ask for. They know that they can negotiate. They know that if they get hit with a late fee, all you got to do is call and ask for it to get taken off, and they’ll probably take it off. And I think having a little bit of an entitlement, understanding that your business is worth something, your patronage is worth something, your review on Yelp is worth something, is really important because those moments will help you get the most out of what you have.
And that’s why rich people aggressively negotiate when they’re buying a home, aggressively negotiate at the car dealership. They will go back and forth and back and forth for three hours and then walk away until the guy from the dealership is literally sprinting to chase after them to give them an extra $2,000 off of the MSRP, whatever. It’s important to remember that. You have value as a person and you need to take advantage of that because businesses know it. And when you realize it, you’re going to be able to really, really maximize what you get out of those businesses.

I love that. Another point in your book that I found fascinating and a little surprising was you said that rich people are lazy, which on the surface doesn’t make sense because, how can they be rich and lazy?

Rich people are the laziest. Oh my God, are you joking? Fun fact, I just went on vacation and stayed at this very ritzy resort. And my fiance and I, we are like, “Oh, it’s great. We’ll walk the half mile down to the beach,” whatever. Everyone was taking golf carts all around this property. They did not want to walk. So yes, anecdotally, rich people, very lazy. But even more so, what I mean by that is rich people love to talk about working hard, hustle hard, always grinding, money never sleeps. It’s so gross and cliche, those sayings. But in reality, they want you to work hard. They want you to pump their gas hard. They want you to DoorDash their food hard. They don’t want to work hard. They know that their human bodies can only work a certain number of hours a day.
Typically, you see people working nine to fives. Even if a very ambitious “rich person” is working a 14-hour day like I did when I started on Wall Street, you can only work so many hours before your body just gives out, before your brain is not functioning the way that it probably would at its best. And they know that. So they recognize that it’s better to have your money make you money than to have your brain or your body make you money. They don’t want to be thinking. They do not want to be lifting things. They do not want to be walking. They want to be chilling. They want to chill by their pool. They want to go play a round of golf. They want to go get a massage, as does everybody, because all of us want the best life that money can buy.
And when you come to the realization that at the beginning of your life, you will work hard for money, but if you can get investing sooner rather than later, your money can work hard for you and you can put your feet up, that’s the key lesson that everybody should realize.

I love that because it’s not the hardest worker who becomes richest, right? Otherwise, every janitor, every teacher. I think that’s such a good point. I love that. You also say that rich people don’t care about impressing you, which I thought was really interesting and made me sit and think for a minute because a lot of rich people, they’re the first ones to go grab all the name brand everything. So how is this true and what are they spending their money on?

They don’t care about impressing you because you know they can afford it. I was talking about buying designer goods and what kind of mental math that I’m doing to decide whether or not a piece is worth buying or not. And someone was like, “This girl’s a hypocrite. She’s wearing an Hermes necklace, dah, dah, dah, dah, dah.” And I’m like, “Babes, I hate to break it to you. This was $18 and you can find it on my Amazon storefront.” It was a literal joke. It wrote itself because you know that I’ve got the net worth to buy the real thing. When I buy something that looks similar, you just assume I got the real thing because you know I can afford it. I don’t care about impressing people with goods anymore.
I’ve noticed that a lot of people are leaning into the quiet luxury trend, which I’m just like, ugh, gross. But I think it’s true in that rich people still like to flaunt their wealth, but they only flaunt it in a way that is like you can clock it if you are rich yourself. It’s not necessarily even about impressing people. It’s about spending money on things that you personally appreciate. And I noticed that about myself. When I first got to New York, I was spending more money on designer and luxury goods, so much more money than I do now on them because now I can really actually afford them and I don’t need them. What’s the point? That holds my stuff just as well as that tote bag I got for free at that one fair that I went to. They were handing them out. It holds stuff, great. For me, it was almost like a armor, showing people that I belong, I have money, I can do those things, but rich people know they belong.

Yeah, because you had been trying to belong for so long, right? Say that five times fast. You get to college, you’re exposed to all these different things, and now I’ve reached it. I’ve achieved it kind of, right?


Yeah. I love that. And you say something else in your book that I think is really interesting that I also totally agree with is that you can’t save your way to rich. You can’t save your way to rich. So apart from not buying things to impress people and buying things really intentionally and on things that matter to you, what do you mean by you can’t save your way to rich? Is it that they’re out there spending everything or can you unpack that a little bit? .

Yeah. Back in our parents’ day, it was an honor to be a blue collar worker. If you were a trades person, you could work. You could be a plumber, an electrician, whatever. You would be able to do that and your partner likely could stay at home and you would be able to eventually afford a home, your two and a half kids, golden retriever, white picket fence house with the tire swing in the front. You were able to have that. Nowadays though, you can’t just save your way to that dream anymore because the cost of living, the cost of housing, the cost of an education has so grossly outpaced wages.
And it’s important to note that now, even if you are a single person, if you want to get to retirement, if you want to live here happily ever after, you need to be in a two income house. And you’re like, “Bro, I’m not picking up a second job. I don’t want to do that. That sounds so horrible.” No, no, no, no, no. Hear me out. You can have one income from your job or your side hustles, whatever, but your second income needs to come from investing because you can only save as much as you earn, but you can always earn more money. And when you are doing two pieces of the pie being one, maximizing your income from labor, so asking for a raise every year, picking up a side hustle, just increasing the amount of cash coming in the door, you are then able to put more of that cash towards investing. And again, it’s basically giving your money to your secret best friend who can work 24/7, does not need a coffee break, does not need to get medical dental benefits. Your money is 24/7 that can work for you. Is like having a little employee, and your little employee makes money and you make money. And the more money you make, the more money your little employee can make. And eventually, you have two streams of income being one person.

Okay, so let’s talk about some of these tools that we can use to become rich, to create additional streams of income, to help us generate this wealth and generate more income to invest in.

Yeah, I think, number one, first and foremost is I’m very much of the camp that everybody needs to be asking for a raise every single year. And I don’t mean some rinky dink inflation raise, you’re getting two, 3%. That does not count. No, sorry. That just makes sure that you can still afford eggs. You need to ask for 10 to 15% every single year. And people always bulk at that number. I’m not saying you’re getting 15% every year, but you need to be asking for it. And if you end up getting 8, 9, 10, 12%, great, you’ve still beat inflation and you’re making more money now. That’s awesome.
But if you are in any job for two years and you haven’t been promoted, you haven’t been given a raise, it’s probably time to start looking elsewhere because it has been proven through a long tail research study that if you do not get a raise every two years, over the course of your lifetime, you’ll make 50% less. And that is insane to me because that’s half, half. You want to make half as much money? Imagine having what you currently make. Would you be cool accepting that? I would not. I would not be cool with that. And I don’t think a lot of the listeners would be either. So if you don’t want to make half as much as you deserve in your lifetime, you need to make sure you are getting paid more, a meaningful amount, 10 to 15%, every two years. And if you’re not, you need to look elsewhere because every two years, you got to go up or you got to go out.


Yeah, 50%. I didn’t realize that was half. And think of how many people stay in their jobs for 10, 15, 20 years. And it’s more than just getting out of your comfort zone. It’s your entire livelihood and your entire retirement and so many things.

And I will say, back in our parents’ generation, people stayed at companies, they were company man, company women, because they had a reason to be. You would stay at a company for 30 plus years because you had a pension.


The longer you stayed somewhere, the more money your employer was legally obligated to set aside for you in retirement, not your money, their money. They would then invest that money. And regardless of how those investment returns did, you would be owed a dollar amount already calculated for you in retirement so you could bank on that money. The problem became when 401ks were invented, I want to say in the ’70s, late ’70s. I don’t know the exact year off the top of my head, but when they were invented, companies instantaneously started adopting them because they were like, “Suddenly, this is not our problem. It’s your problem. Amazing.” And so they’ve now passed that burden of retirement onto the workers.
And so not only is the 401k worse in every single way, your employer is maybe matching your contribution, but you have to be the one to put your money away for retirement. And what does that mean? That means you have to be paid more. It means you have to have more of a reason to stay somewhere. There’s no incentive keeping you around. So now, people in our generation can’t afford to be loyal, whereas it paid to be loyal back in our parents’ generation. So things have changed, and we have to address that because the way you make strategic decisions in your life is going to differ based on how the rules of the game change.

I love that. And I think that a lot of that old advice is still being trickled down to people because you meet people and you’re like, “Two years? No, that’s too soon. Five years? You’re barely learning the role still.” And I think it’s really interesting because it’s the parents and the grandparents, they’ve grown up with pensions, to your point, and they were taken care of in retirement, and that’s not the truth anymore.

Yeah, I remember my dad impressing upon me, “Don’t job hop. Your resume looks terrible because you quit a job every year, year and a half since you started and you don’t need a three-page resume.” Well, yeah, I do. I don’t actually need a three-page resume. One page is fine. You just highlight the highlights. But yeah, you have to job hop in order to make any money. The new hire budget is much bigger than the retention budget.

Isn’t that crazy too? Because it’ll be so much cheaper to just be like, “Hey, we’ll pay this person marginally more and they already know how to do the job,” versus like, “Oh no, we lost our star talent again. Why does this keep happening to us?” It’s like, you know why this keeps happening to you. You know exactly why.

I know why it keeps happening to you.

Yeah. It’s like literally just pay your employees what they’re asking for. Is that confusing? I don’t get it.

Yeah, no, it shouldn’t be confusing, but it is. All right. Vivian, if someone wanted to get started today on their journey to becoming rich AF, what advice would you give to them?

I think one of the easiest things that you can do in 15 minutes is just signing up for a high yield savings account. So I think a lot of us think of bank accounts as the traditional brick and mortar. There’s a bank on the corner, they’ve got an ATM and maybe they gave you a baseball cap in college. You’re sick. Okay. They’re my bank forever. No, that’s not a good idea. You want to go with a high-yield savings account or a high yield checking and savings account, if you can find access to one, because you literally just get paid more interest to park your money with a bank.
How this works is when you give your money to a bank to put into a checking or savings account, that money doesn’t just sit there. It may sit there in the app, you show the number. Sure. But that money then gets lent out to people, whether that be through mortgages or personal loans or small business loans, what have you. That money gets lent out. And you know for a fact the bank’s making a killing lending that money out. What are you getting? A couple cents every year. Gross. But if you have a high-yield savings account, you can get a lot more in interest.
Is it the amazing solution you can just put your money into a high yield savings account and retire? No, but it is going to help preserve your wealth better than putting it in a regular savings account. And once you have an emergency fund set up in your high-yield savings account, you can really start focusing on high interest rate debt pay down, you can focus on investing. There’s so many other steps, but I would say the very first one is putting your money and keeping it safe somewhere that you’re able to get paid a good interest rate.

Yeah. When I first learned about high yield savings accounts, I thought it sounded like a scam. I’m like, wait, why are they going to pay me interest and this other big bank isn’t? I don’t get it. And right now, some of them are paying like three, four, 5%, which is insane. So what is your favorite high-yield savings account? Because I’m sure some people are sitting there like, “All right, that seems like an easy first step. Let’s do it.”

Yeah. My favorite high-yield checking and savings account is through SoFi. The reason why they’re my favorite is because it’s not just high yield savings. They actually do high-yield checking as well. So even money that’s just sitting around for one week waiting to be paid to your landlord or cover your wifi bill or buy your groceries, you can earn interest on. And I just think you should always be earning interest because your money has value, you have value as a customer and you should be entitled to that interest.

I love that. I didn’t even know they had a checking account. All right, Vivian, thank you so much for your time today. I loved your book Rich AF. And if somebody were looking for you online, where would they find you?

You can find me all across social media as Your Rich BFF. And if you are interested in checking out the book and ordering your own copy, you can head to

Awesome. Thank you so much today, Vivian, and we will talk to you soon.

Thank you so much for having me.

Okay, that was Vivian TU, founder and CEO of Your Rich BF Media and the host of Networth and Chill. And that was a super fun interview. Amanda, what did you think of the show?

I loved it. Vivian’s funny. She is funny. I feel like her personality just radiated through the microphone.

Yes, I love her. Take no prisoner’s attitude. Take no guff from anybody. She’s just going to tell you like it is. And you know what? That’s I love most about the book and her podcast and just her social media presence. She’s not fake. She’s just, here’s the reality of the facts of money. Here you go. Here’s information for you and you can take that and apply it to your life. I really, really like her no-nonsense approach.

Yeah. And I think that her name really encapsulates her way of educating too, right? Your BFF. You feel like you’re FaceTiming with your BFF when you talk to her, when you read her book. It’s so digestible, you feel like you’re talking with a friend. And I think that makes the money lessons and the framework throughout the book that much more digestible.

Yeah. And she’s not lecturing you. She’s just giving you information. Yep, absolutely love it. So you can find Vivian all over social media at Your Rich BFF, and don’t forget to go pick up a copy of her book that just came out called Rich Af.
All right, that wraps up this episode of the BiggerPockets Money Podcast. Amanda, if people were looking for you online, where would they find you?

You can find me, my website, or any social media platform, Shewolfeofwallstreet, and that’s Wolfe with an E.

All right, that wraps up this episode of the BiggerPockets Money Podcast. She is the Shewolfeofwallstreet, Amanda Wolfe. And I am Mindy Jensen saying, take care, teddy bear.

Speaker 4:
If you enjoyed today’s episode, please give us a five star review on Spotify or Apple. And if you’re looking for even more money content, feel free to visit our YouTube channel at

BiggerPockets money was created by Mindy Jensen and Scott Trench, produced by Kaylin Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.


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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

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What to Look for When Buying a Rental Property (7 Considerations)

Knowing what to look for when buying a rental property will save you time and money while reducing stress. In this article, we outline seven considerations that you can’t afford to overlook.

Consideration 1: Location

Location, location, location is consideration No. 1 when buying a rental property. 

Is the property close to amenities such as shopping? How about public transportation? What about local schools? Is the area safe? Is it family-friendly? 

Know which location(s) meet your requirements, and only consider properties within those areas. 

Consideration 2: Property Condition

Assess the property’s age and current condition to estimate ongoing maintenance needs and potential renovation costs. 

You must factor in the cost of upgrades or repairs to meet market expectations and enhance rental appeal. Should you require assistance, consult with a contractor and/or home inspector for professional guidance. 

This careful evaluation helps you forecast long-term profitability and maintain a competitive edge in the local rental market.

Consideration 3: Market Rent Rates

Investigate local rent rates to gauge the property’s earning potential. From there, compare these rates with similar properties in the area to calculate competitive pricing. 

Understanding market trends ensures your rent aligns with tenant expectations while maximizing your income. Regularly monitoring these rates helps adapt to market changes and sustain profitability over the long term.

Tip: Our rental property calculator comes in handy here.

Consideration 4: Legal and Zoning Regulations

Don’t assume that you know the legal and zoning regulations in the area you’re buying. Instead, you must do two things:

  • Verify that the property complies with local zoning laws.
  • Understand landlord-tenant laws, including any rent control measures. 

Compliance with all regulations is crucial to avoid legal complications and ensure smooth operation of your rental property.

Consideration 5: Tenant Demand

Without research into tenant demand, you may believe that you’ve found the perfect rental property. However, additional research is always needed to ensure that tenant demand is there (and is likely to remain).

High-demand areas often yield better rental rates and lower vacancy periods, contributing to a more stable rental income. Conversely, low-demand areas are hypercompetitive and have high vacancy rates. 

Consideration 6: Financing and Expenses

Examine financing options and calculate total expenses, including your mortgage, taxes, insurance, and maintenance costs. While you may not have exact numbers, depending on where you are in the buying process, accurate estimates are a must. With these numbers in hand, you can better choose a financing plan that aligns with your investment goals and cash flow requirements. 

During ownership of the property, regular financial reviews help you effectively manage costs and maximize return on investment. For example, you may find that refinancing your property allows you to save money on interest. Or perhaps a home equity loan positions you to purchase another property. 

Consideration 7: Future Value 

One of the primary benefits of real estate investing is the potential for appreciation. While there’s no guarantee of this, history shows that there’s a good chance your property will gain value over the years. 

When buying, consider the property’s potential for appreciation based on past market performance. Do the following:

  • Analyze market trends and future development plans in the area that could enhance property value.
  • Evaluate economic stability to determine the growth prospects of the region.
  • Monitor housing market indicators such as supply and demand and foreclosure rates.

Your goal is to generate a positive return on investment (ROI) month after month as a landlord, while also owning a property that appreciates. This will make your investment well worth the money. 

Final Thoughts

These are seven of the most important considerations when buying a rental property. While other details will come to light along the way, an early focus on these will point you in the right direction.

Are you ready to take the next step? Before beginning your search for the perfect property, read our eight-step guide. It provides even more information on how to make an informed, confident investment. 

Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

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The U.S. is short 4.5 to 5 million homes, says Re/Max CEO Nick Bailey on housing demand


Nick Bailey, Re/Max CEO, joins ‘Closing Bell Overtime’ to talk housing prices, the state of the real estate market, what’s ahead for 2024 and more.


Wed, Dec 27 20235:30 PM EST

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The U.S. is short 4.5 to 5 million homes, says Re/Max CEO Nick Bailey on housing demand Read More »

How to Make Even MORE Cash Flow Off Your Rental Properties

Want to make multiple streams of income? Well, guess what? You DON’T need to buy more properties to do it. Instead, you can turn an existing rental property into a cash cow…but it has to meet the right qualifications. This is precisely what today’s first guest, Stacie, is looking for. She’s got multiple properties, and some have enough land to add a second rental property. But is doing development worth the high cash flow?

Welcome back to Seeing Greene, where David and Rob answer real estate questions from BiggerPockets listeners just like you! First, we’ll talk to Stacie about her buy vs. build dilemma, and which makes MUCH more sense in today’s market. Then, an investor struggling to save up down payments asks what he should do: save, invest elsewhere, or pay down his mortgages. Finally, David gives some swift advice on using a home equity “agreement” and how to make the MOST money on your house hack.

Want to ask David a question? If so, submit your question here so David can answer it on the next episode of Seeing Greene. Hop on the BiggerPockets forums and ask other investors their take, or follow David on Instagram to see when he’s going live so you can jump on a live Q&A and get your question answered on the spot!

David Greene:
This is the BiggerPockets Podcast. What’s going on everyone? It’s David Greene, your host of the BiggerPockets Real Estate podcast, coming to you from Kauai, and that’s one of the things I love about real estate is I get to bring you guys questions from our listener base from everywhere in the world. My hope is that more of you can get to the same position and we’re going to share some advice today that will help you do just that. Today’s Seeing Greene episode has a lot of good stuff, including what a home equity agreement is and if one should be used. The best ways to reinvest the cashflow that you’re making from your current portfolio today and how you should be thinking about it and a live call with one of our listeners where we go back and forth.
Helping them determine if they should take the money they’ve made in real estate and improve the properties they have or if they should buy new properties and if so, what to be thinking about when going back and forth with that decision. A lot of people in today’s market have equity and they’re trying to figure out how they should use it, and sometimes that means buying more real estate, but sometimes that means improving the real estate they have. I especially like this topic because a lot of people have equity and they’re tapping into it with HELOCs, but they’re not sure if they should use that HELOC money to scale into a bigger portfolio or improve what they’ve got. So we tackle that and more on today’s episode of Seeing Greene.
We’re going to bring in our first guest in a second, but before we do a quick tip for you all. You’re going to hear more about it in the next question, but I am a firm believer, especially if you’ve got a short-term rental that tapping into your equity and using that money to improve the property, improve the decor, add amenities to it, make it look nicer, get better pictures taken, is a quick way to get a return on your capital that can then be used to pay the equity line of credit back down. I don’t love in today’s market taking $200,000 out of a house at a pretty high interest rate and using that for the down payment on a property that you then have to get another loan for the other 80% and stacking up debt when rates are higher.
I’m a much bigger fan of a get in and get out strategy, kind of like using a jet ski instead of a battleship. Take out some equity, fix up your house, improve the revenue, and then pay the equity loan off with that revenue and then, ask yourself how you can do it again. How can you recycle that same 20 or $30,000 to improve the properties you’ve got and win in the short-term rental wars? All right, let’s get to our first guest today. Let’s welcome Stacie to the studio. Stacie, welcome to Seeing Greene. A little bit of background about you. You’ve got a single family property, a duplex, and a piece of property in the Austin area, in New Braunfels, Texas. So funny story here, I almost invested in New Braunfels myself about five years ago and wish I would have, because I would have done very well.
I fell prey to that same problem of, well, when I first heard about it was this much and now it’s $50,000 more. I don’t want to get in too late and made the same mistake that I tell everybody else not to make because I learned it in that example. So congratulations on doing the right do and having a New Braunfels property. So, tell us what’s on your mind today.

Thank you. Yes, so considering those properties we have and our long-term strategy of buy and hold, which we’re a 100% in on, so we have this property in New Braunfels. We actually bought it site unseen and it was a very good purchase for us. It’s zoned multifamily. It’s one block from the Guadalupe River, so it has a single family home on there where we have a long-term renter, but we have the opportunity to develop it because it’s already zoned for multifamily. It’s half an acre lot. Then, we have this plot, this quarter acre plot in Lago Vista near Lake Travis that was given to us from family that also has development opportunity.
So we have these two properties that we own, that have development opportunities, but also, we’re tempted to buy our next investment property. So we’re at the point of trying to decide do we stay the course, leave those properties as is because we have a long-term renter in New Braunfels, we’re cash flowing about $600 a month there, so it’s well paying for itself and then some. Then, we have this lot that’s just sitting there vacant that we’re trying to figure out what to do with. Our duplex in South Austin is cash flowing about $2,100 a month. So we have two long-term rentals there. We’re not looking to develop or do anything with that right now. So we’re at that kind of inflection point.
Do we buy our next investment property or is now the time that we actually do some forced equity and develop the New Braunfels property or build something in Lago Vista?

David Greene:

My first question here is what is the reason that you want to get into the next property? Is the reason you want to get into the next property simply for the sake of growth and you’re like, “Hey, I just want to add to the portfolio. I don’t really need the cash flow,” or do you want to get into another property because you want more cash flow because you need an extra couple of hundred bucks every month?

We don’t need the extra cash every month. We want to grow the portfolio and we also want to invest sort of, I know it’s not about timing the markets, time in market, but it still feels like now is a good time before everyone is back in the market, should rates come down. So we’re kind of feeling that, wanting to get the next property because we do want to grow the portfolio, but also, when is it time to actually develop these properties that we’re sitting on too? So we’re kind of don’t know which way to go necessarily.

I think if you’re not pressed for the cash flow and you’ve got a lot and you’ve got a property that is zoned for more property, I’m a big fan of making as many streams of income off of one property as possible. So, if you have the steam and if you have sort of the dedication and I guess the open mind to just go through a new construction, then I think you should do it. A big fan, I actually think that new construction is just the best way to combat a lot of things that are happening right now because yes, you will be getting something at a higher interest if you buy a property. So for me, I’m like, I think if you can go and build something at your cost without the markup of someone … if you go and buy a new construction off of Redfin, you’re paying their cost and you’re paying a premium for it, right?
So if you can go and build something at your cost, it’s not really that same markup as getting it off the MLS and when you refi out and get your money out, you’ll have a higher interest rate on that of course, but it won’t hurt quite as bad as having gone and purchased a property straight off the MLS, if that makes sense. So if you have the ability to wait it out for let’s say 12 to 18 months, then I definitely think building from the ground up is a really smart thing to do right now.

David Greene:
All right. I will weigh in on this too. I love the question. It comes up a lot where I live in the Bay Area, you typically see this in more expensive areas, where the question is do I build an ADU or do I buy a new house? And the tricky thing is you can’t finance the build. If you could finance the build, it would almost always be an easy, “Yeah, just improve the property you’ve got.” The problem is you got to put a lot of capital down to do it. So I like to try to simplify this turning into apples to apples as much as I can. And I asked the question of, for the capital I’m going to put into this thing, how much cash flow am I going to receive?
What’s the ROI on that and how much equity am I going to build? What’s the return on investment on that? So if you were to add to the property that you already have, how much money would you have to put down to do this and do you think it would increase the equity

For the New Braunfels property, we probably would have to put down about 200,000 in capital to build an ADU, at least an ADU, right? A prefab ADU would probably be about 200,000, all in. For the Lago Vista property, we’re looking at probably 250 upwards to half a million of capital to put in to develop that property, because it is raw land, it’s going to require a lot more clearance and work to get that property ready for building. So I don’t think we would do both at the same time. I think we’re kind of anxious to really look at … I think the New Braunfels property has the most potential because it is such a growing area and the location of it is prime, being a block from the Guadalupe River. So I think there’s a lot of upside to developing New Braunfels from all that I can tell.

David Greene:
So if you put the $200,000 into New Braunfels, would you add equity to the property?

Yes, I believe we would add equity to the property.

David Greene:
How much do you think you’d be adding?

I think we probably would be adding … we bought it two years ago. We have probably about … I’m going to say about 40,000 in equity in just the past two years in the property. So if we add an ADU, we’d also have to configure the front house a bit too to put the ADU in. I don’t know, but I’m going to guess that we would probably add about … immediately about a hundred, 150,000 in equity in that property. Does that sound about right, the numbers I’ve shared?

David Greene:
I don’t know the area. Yeah, it could. It could work. What about the cash flow? If you build an ADU for $200,000, what will it rent for?

Yeah, because right now, we’re renting, all in P and I is like 1800. 18, 1900 we’re renting for 25 on the single family home, so we’ve got nice cash flow there. We can build up to 1,000 square foot ADU without it being considered a second principal structure on the property. So 1,000 square foot, we could probably rent that, I’m going to say around 18, 1900 in today’s market for 1,000 square feet.

David Greene:
Okay. Would this increase the property taxes on the property if you add to this work, make it worth more?

Most likely.

David Greene:
And then where are they at New Braunfels like two and a half percent or so?

No, it’s right around 2%. It’s like 1.97, something like that. Yeah.

David Greene:
So that is a pretty healthy return. I mean, you’re having additional property taxes and there’s going to be more insurance, but still, I believe you said it was 1800, you think that you’d rent it for?


David Greene:
So let’s say you keep say, 1400 of that to invest 200,000. That’s not a bad deal there. You’re not too far off from the 1% rule. The downside would be you’re spending $200,000 to add $100,000 of equity, so you’re actually losing equity in a sense because you’re transferring that money from your bank account into the property. You’re going to lose $100,000 of value there, but you’re going to gain the extra cash flow of say, $1,400 a month or $1,300 a month. Now, here’s why I framed it that way. I think your job here, Stacie, is to ask yourself with this $200,000, if I put it into a different investment vehicle, could I get better than say 13 or $1,400 a month and avoid losing a $100,000 of equity? Could you put $200,000 into building a new home construction that you might gain $100,000 of equity at the end instead of losing it?
That’s a $200,000 swing, or maybe you get better cash flow, maybe the cash flow is not as good, but you don’t lose as much equity. Have you looked into opportunities like that?

I haven’t, no.

David Greene:
Okay. That’s how my mind goes to it. What if you paid cash for something that was $200,000, maybe a fixer upper, you fixed it up and then, you refinanced out of it, you could do it again, or you could buy a million dollar property, put $200,000 down, so you’ve got those. In my mind, you’ve got the three options. You put it as a down payment on something, you pay cash for something or you put it into the property you have. Rob, what are you thinking?

Yeah, I guess I’d really want to … and we’re not going to be able to solve for this on this episode unfortunately, but I’d want to know what kind of equity we’d be adding because I think it’s, I’m not going to say rare, but I feel like if you’re building something on your property such as an ADU or a secondary unit, I feel like the equity that you’re building should be pretty commensurate with the amount of money that you’re investing, right? So it’s like I think if you were going to spend 200 but you’re only getting a $100,000 in equity, then yeah, I would agree with David. I probably wouldn’t do that.
I’d go find somewhere where I’d get the one for one ratio on that, but I do wonder if you would get that full equity out of adding an addition to the property. If the answer is yes, I would go that route and then build it and then, do a cash-out refi and try to get as much of that money back, because if you do that and you get a pretty significant portion of your money back, then your ROI skyrockets in that point. I’m a big fan of this strategy solely because you get to stack income streams on one property and it really makes a huge difference. I had a property in LA. When I bought it, it was $400 mortgage. I’ve since refinanced, it’s like 4,200 now, but I now rent out the main home, which goes for … anywhere from 3,500 to $5,000 a month.
I’ve got an ADU in the backyard that goes for anywhere from 2300 to $3,000 a month, and I even have a third unit that I don’t rent out, but I used to, and that was another $2,000 for that unit. So when you added it all up, it was like $8,000 on one property and your profit margins on that are just so healthy. Your landscaping bills are all consolidated to that one property. All of your bills are just consolidated into this one business, and that’s why I’m a big fan of building up basically as many income streams on one property as possible, assuming that your equity that you put in is one for one on the investment that you put in.

David Greene:
That’s the key there, Stacie. I don’t love the deal if you’re putting in more money than you’re gaining in equity. Hearing that, what’s going through your mind.

Yeah. No, that makes a ton of sense. I’m not 100% on all the numbers. This is as far as I’ve been able to get, but I will dig deeper in terms of the actual equity we’d be able to get out of that property. Yeah, and just to throw a curveball here, right? Our house in Los Angeles, we’re in the San Fernando Valley, we’re in Encino up in the hills. That’s why my internet is a little spotty. I mean, we were originally going to keep this house and sell it or not sell it, but use that as sort of our investment property here, rent it out. Our latest thinking was to sell this house to buy more properties in Texas.
So we’re trying to treat all of our homes as sort of part of the portfolio and how do we leverage them to the maximum, and I know David, you’re up in Northern California, but I don’t know, we were sort of starting to think that we just wanted to get out of California.

David Greene:
Shocking. I’ve never heard anybody say this.

Yeah, never, right?

David Greene:
Yeah. It’s something to think about because you probably have a lot of equity there. I don’t think it would benefit you to sell it and put the money into Texas, unless you know where you’re going to put the money, and it sounds like you got to figure that problem out first. Where are we going to deploy our capital and how are we going to deploy it? I don’t think it’s going to be as simple as let’s just build onto what we already have. There may be something where I would want to take some of that cash and look for a way to buy something that was maybe distressed that I could fix up and add value to it, although it’s not bad building an ADU in that area where you know you’re going to have tenants, you know the values are going to be going up.
It’s not going to hurt you. I just hate those high Texas property taxes, right? If the property value does go up, those taxes hurt out of the cash flow you’d be getting.

They do, and insurance is going up too, so that’s every year, steadily insurance is going up.

David Greene:
That’s right. Well, thank you Stacie. This was a good question. I think more and more people are asking this question because rates are high, so it’s not an automatic, yes, I should go buy another property. Now, the rates are getting really high. It’s hard to make them cash flow. So we’re starting to ask questions like this, so thank you for bringing this up.

Thank you guys.

David Greene:
Thank you, Stacie.

Thank you.

David Greene:
All right, thank you Stacie for joining us today. I just dropped Rob off at a Chipotle, so I’ll be flying solo for the rest of today’s episode, but big thank you to Rob for joining. I was so appreciative that I actually left him with a dollar so he could get some extra guac on that burrito that he loves so much. His tip for getting the most out of one property is a great takeaway and I appreciate him sharing that. If you would like to have Rob and I, or me or anyone else in the BP universe answer your specific questions, head over to where you can submit them and that will make me like you. If you’ve submitted a question to Seeing Greene, you can consider yourself my friend, and when we see each other at BP Con, I will take a picture with you, hug you and say something nice.
I hope you’re getting some value out of today’s conversation and our listener questions so far, but we’ve got more coming up after this section. I like to take a minute in the middle of our shows to share comments that you all have left on YouTube or when you review the podcast. Our first review comes from 1981 South Bay. “Love the Seeing Greene episodes. I love these episodes and it’s a great addition to have Rob on the series. My wife and I have been listening to Bigger Pockets for two years. We finally just bought our first two duplexes and are planning to acquire more properties. We could not have done it without this podcast and the community. Thank you, David, Rob, and the entire BP community.”
Well, thank you South Bay for a five-star review. That’s freaking awesome. I hope some of our listeners go and follow your lead and also, if you’re in the South Bay of the Northern California Bay Area, we’re basically neighbors. I live about an hour away from you, so make sure that you reach out on Instagram. Let me know you are the one who left that comment and let’s see, if we can get you coming up to some of the meetups that I do in Northern California. We’ve got some comments here from the Seeing Greene episode 840 that came directly off of the YouTube channel. The first one comes from Dan Cohan. “Thanks for sharing this awesome video. I really relate to the struggles of estimating renovation costs, especially when you’re investing in real estate from far away.” And then Laura Peffer added, “Yes, please do an entire show on To Cash Flow or Not to Cash flow.”
Well, you’ve spoken and we’ve listened. We actually did record a show on when it’s okay or maybe not okay to buy non-cash flowing properties and I will talk to our production staff about putting a show together that says, is cash flow the only reason to invest in real estate or is it okay to not invest in it? Maybe we’ll have a back and forth where we have the cash flow defenders and the appreciation avengers or however we’re going to call that. In case you missed it, go back and listen to episode 853, which was released on December 6th where we break down three negative cashflow deals. All right, let’s get into the next question. All right, our next question comes from Roy Gottsteiner. He is a foreign national living abroad, so he’s having a difficult time getting financing.
He can only get 60 to 65% loan to value ratios and no access to products like FHA or HELOC. Roy started four years ago investing in North Carolina and Ohio and currently has a portfolio of 10 single-family housing rentals. He does mainly BRRR and long-term traditional rentals and recently started doing some medium terms. Roy says, “Hi David. These episodes are extremely helpful and are helping me to constantly adjust my thinking based on the current market dynamics as well as my own position in the investing journey, so thanks for everything. I built a portfolio of 10 units, which cashflow two to $3,000 a month. I’m 35 and I have a great job, so I don’t need this income and intend to reinvest all of it.”
“I’m trying to think of the best way to use that money to further enhance my progress towards financial independence. Here’s some options I had in mind, but happy to hear your thoughts. If there’s anything else I need to be thinking of. Investing it regularly into a stock index and dollar cost averaging for a long-term hold. Dollar cost averaging basically means you just keep buying stock even if the price is dropping. It’s funny that we came up with this phrase, dollar cost averaging to say, well just keep buying even if the price is going lower because eventually it’s going to go up and you will have bought it at a lower average than the prices when they were high. Number two, paying off mortgages on my investment properties to reduce leverage and increase cashflow.”
“Number three, save the money and try finding a creative finance deal with a 30,000 dollar entry each year. My last purchase was a sub two with a 42,000 dollar entry, and it was a great one. Looking forward to your sage advice.” All right, thank you for that question. I appreciate that. I can answer this one pretty quick. I don’t love the idea of paying off your mortgages, especially because if you bought them and you have 10 of them, they probably have pretty low rates right now, so you’re not saving a ton of money doing that. You also have to pay a ton of mortgage off before you actually don’t have to make the payment when it’s owned free and clear, so you don’t really see the return on that money for years.
It might be 10, 15, 20 years of trying to pay these things off before you actually get rid of that interest on your mortgage. So what will happen is you’ll build the equity in it faster, but you won’t put money in your bank faster. So I don’t love that idea and I don’t love investing into the stock index, because I don’t want to give advice about something that I don’t really understand and I don’t know that there’s any solid advice I can give anybody when it comes to investing in stocks. I also just think you’ll do better with real estate long term. So your third option, saving the money and trying to find a creative finance deal like the one you did last time is pretty good.
And here’s why I like that. If you don’t find the creative finance deal, you just have more reserves and you’re never going to find me upset about someone who has a lot of reserves, especially considering the economy that we are going into. In the past, success was all about scaling and acquiring. How many doors can you get? That was the cocktail party brag, I have this many doors. In the future, I believe, it’s going to be, what can you keep? How can you hold on to the real estate you’ve already bought? And reserves can be a huge factor in saving you there. All right, moving into our next question. This comes from Chris Lloyd in Hampton Roads, Virginia.

Chris Lloyd:
Hey David. My name is Chris Lloyd from Newport News, Virginia. And here’s my question. I currently have a property I was looking to renovate and I plan to fund this renovation using a HELOC. I’ve got two properties with some good equity in it and I found out recently that I can’t qualify for a HELOC because I’ve been self-employed for less than two years. Took my business full-time a little over a year ago. So I’ve been looking in other ways to finance this project and came across home equity agreements. This isn’t something I’ve really heard talked about on the podcast and I was wondering if there was a reason why. If this is a newer product, if it’s just getting traction or if this product is absolute junk, I don’t know. So I’m asking what instances would this make sense for someone to use and when and would it not make sense?

David Greene:
All right, Chris, thank you for that question. Appreciate it. My advice would be, no, I don’t think you should take on a home equity agreement unless you’re in dire financial straits. And even if you are, I’d probably prefer that you sold the house, took your equity and moved on to something else. All right, our last question is going to come from Nick Lynch and it’s a video question.

Nick Lynch:
Hey David, this is Nick Lynch from Sacramento, California. Thank you for everything that you and BiggerPockets do. I love you guy’s content. I’m hoping to buy my first home in the greater Sacramento area of California when my current lease ends April 30th of 2024. My question for you is what would be the best method to get in to my first home and into investing at the same time, given how high the prices are in California. I’m considering house hacking, house hopping, or simply buying a primary residence I’m comfortable living in long-term and using the remainder of the fund that would have after a down payment to maybe invest in out-of-state property that could capital more easily.
My biggest concern with house hacking or house hopping in California, that the property is so expensive, it would take a very large down payment to get those properties to cash flow even after living in them for a couple of years. Thanks, David. Appreciate the help.

David Greene:
All right, Nick, glad you reached out. We actually do a lot of business in the David Greene team in the Sacramento area, and we help people with stuff like this all the time. The key to house hacking is not about paying the mortgage down or buying a cheap home. The key to house hacking successfully, and by that I mean moving out of it and having it cash for later. What I often call the sneaky rental tactic because you can get a rental property for 5% down or three point a half percent down instead of 20% down if you live in it first, is finding an actual property with a floor plan that would work. We’ve helped clients do this by buying properties with a high bedroom and bathroom count because that’s more units that they can create to generate revenue.
We’ve also had people that we’ve helped doing this when they rent out part of the home as a short-term rental or a floor plan that can be moved around where walls are added to create more than one unit in the property itself. The key is not to focus on the expenses and keeping them low, but to focus on the income and getting it high. So when you’re looking for the property, what you really want to do is look for a floor plan that either has a lot of bedrooms and bathrooms and has sufficient parking and is also in an area that people want to rent from, or you want to look for a floor plan where the basement that you could live in and you rent out maybe two units above or two units above and it has an ADU.
Something where you can get much more revenue coming in on the property which you have more control over. I call that forced cashflow than a property that you just bought at a lower price because that’s not realistic. If you’re trying to buy in a high appreciation market like Northern California where wages are high and the market is strong, you are less likely to find a cheap house. Reach out to me directly and I’ll see if we can help you with that and start looking at properties with the most square footage and then, asking yourself, how could I manipulate and maneuver the square footage to where this would be a good house hack. Great question though, and I wish you the best in your endeavors.
All right, everyone that is Seeing Greene for today, I so appreciate you being here with me and giving me your attention and allowing me to help educate you on real estate investing and growing wealth through real estate because I’m passionate about it and I love you guys. I really hope I was able to help some of you brave souls who took the action and ask me the questions that I was able to answer for everyone else. And I look forward to answering more of your questions. Go to and submit your question to be on Seeing Greene. Hope you guys enjoyed today’s show and I will see you on the next episode of Seeing Greene.


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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

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November pending home sales unchanged, despite lower mortgage rates

Pending home sales in November remain unchanged

Pending home sales in November were unchanged compared with October and 5.2% lower than November of last year, according to the National Association of Realtors.

The reading, which is based on signed contracts during the month, is a forward-looking indicator of closed sales as well as the most current look at what potential homebuyers are thinking.

Mortgage rates are key in this report, with the average rate on the 30-year fixed mortgage soaring over 8% in mid-October before dropping sharply to 7.5% in the first week of November, according to Mortgage News Daily. It ended the month around 7.25%.

Analysts had expected the drop to cause a slight gain in pending sales, but apparently it wasn’t enough, given steep home prices and tight supply.

“Although declining mortgage rates did not induce more homebuyers to submit formal contracts in November, it has sparked a surge in interest, as evidenced by a higher number of lockbox openings,” said Lawrence Yun, NAR’s chief economist.

Regionally, pending sales rose 0.8% month over month in the Northeast and 0.5% in the Midwest. Sales made a stronger 4.2% gain in the West — where prices are highest and a drop in mortgage rates would have the largest impact — and fell 2.3% in the South. Pending sales were lower in all regions in November compared with same month in 2022.

Mortgage rates are now solidly in the mid-6% range, but the supply of homes for sale is still very low. Builders are ramping up production, but new homes come at a price premium. Prices for existing homes continue to rise.

“With mortgage rates falling further in December – leading to savings of around $300 per month from the recent cyclical peak in rates – home sales will improve in 2024,” Yun added.

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These Markets Are Most (and Least) Vulnerable to Housing Declines

Every real estate investor wants to know if there’ll be a housing market downturn in 2024. But perhaps a better question to ask, now and always, is: “Which local markets are most at risk of a downturn?” 

Regional variations consistently play a part in any housing market analysis or forecast. And now we have the most up-to-date Special Housing Risk Report from real estate data provider ATTOM. 

ATTOM’s data set is valuable to anyone wanting to zoom in on the prospects of investing in a specific area. The data is organized by county, which allows for precise localized predictions about housing market health going into the new year. 

ATTOM uses four main parameters for gauging the risks of a housing market downturn in each area. Here’s a look at each. 

1. Home Affordability

This factor is assessed by looking at how much homeowners spend on housing costs, including their mortgage, home insurance, and property taxes. In order to count as affordable, a home should cost its owner no more than one-third of their salary. On its own, however, this measurement does not indicate whether an area is at risk or not. 

Speaking to BiggerPockets via email, ATTOM CEO Rob Barber explained that affordability remains an ‘‘area of similarity’’ between most and least at-risk housing markets: ‘‘In 37 of the 50 most-exposed and 36 of the 50 least-exposed markets, major homeownership expenses required a larger portion of average local wages than the national level.’’ 

Affordability is at low levels nationwide, with the average percentage of local wages required to cover housing expenses now standing at 34.6%, according to Barber. 

2. Percentage of Underwater Mortgages

An underwater mortgage is a mortgage loan that is more than the current market value of the home. A high percentage of homes that currently are worth less than the remaining mortgages on them is a sign that trouble may be afoot. 

Barber told us that ‘‘among the top 50 markets most at risk, 28 had larger portions of residential mortgages that were underwater than the national figure of 5.3%. Just two of the 50 least at-risk markets faced that situation.’’  

3. Number of Homes Facing Possible Foreclosure

ATTOM accessed its own foreclosure reports in order to analyze the vulnerability to foreclosure activity in each county. Foreclosures happen everywhere, but there is a national benchmark for a level that is alarming and could indicate that an area is headed for major housing trouble. 

Of course, everyone remembers the mass foreclosure disaster that hit the housing market back in 2008, when large numbers of American homeowners found themselves unable to pay for their homes almost overnight. While this situation is extremely unlikely to ever be repeated thanks to tighter affordability checks for mortgage applicants, some local markets are still at risk of higher-than-average foreclosure numbers because they do not have adequate foreclosure prevention measures in place, and have large numbers of people on low wages or at risk of unemployment. 

The difference between the most and the least at-risk areas is pretty stark. As Barber points out: ‘‘All but one of the top 50 counties had higher portions of homeowners facing possible foreclosure than the national rate of one in every 1,389 residential properties. None of the counties in the list of those least at-risk surpassed the nationwide benchmark.’’

4. Unemployment Levels

The relationship between this factor and the previous one is very clear: The higher the local unemployment level, the higher the chance of an eventual housing market downturn through a wave of foreclosures and subsequent lowering of home values. 

While it can seem like a housing market is still thriving—i.e., home prices are high—steadily growing unemployment is bad news in the longer term. ‘‘Unemployment rates in November of last year were higher than the 3.9% nationwide figure in 49 of the most at-risk markets, but in none of the least exposed,’’ says Barber.  

How much of a risk of a housing market downturn does the most exposed area face? According to Barber, the figure is anywhere between two to six times the risk of the least exposed areas. 

With these figures in mind, here are the most—and least—vulnerable housing markets in the U.S. right now. 

The Most At-Risk Markets

According to ATTOM, the areas with the highest risk of housing market downturns are clustered disproportionately in Chicago, New York City, and in California. These three regional markets took a whopping 21 of the 50 at-risk locations in the ATTOM report. 

New York fared especially poorly, with both central areas like Brooklyn and the Bronx and suburban areas encompassing New Jersey showing signs of potential trouble. In California, several areas around Fresno showed similar downward trends. In Chicago, seven areas were identified as being at a high risk of a housing market downturn. 

However, New Jersey is the one to watch for a possible wave of foreclosures in the near future. ATTOM’s data shows that several New Jersey counties had the highest foreclosure rates in the country. They are:

  • Cumberland County (Vineland), New Jersey (one in 359 residential properties facing possible foreclosure)
  • Warren County, New Jersey (outside Allentown, Pennsylvania) (one in 459)
  • Sussex County, New Jersey (outside New York City) (one in 461)
  • Gloucester County, New Jersey (outside Philadelphia) (one in 470)
  • Camden County, New Jersey (one in 509)

Unemployment figures are currently the most alarming in two Californian countries: Merced County (outside Fresno), which has a very high unemployment level of 8.9%, and Kern County (Bakersfield), where unemployment is at 8%. New Jersey’s Cumberland County also has a high unemployment level of 7.3%, and New York City’s Bronx County is not far behind at 7.2%.  

As the data suggests, underwater mortgages on their own are not the strongest indicator of a possible housing market downturn, as only 28 of the 50 most at-risk counties have that problem. However, a high percentage of underwater mortgages does signal that something isn’t right in the area and is something any potential investor should investigate. 

Take Webb County, Laredo, Texas, the U.S. area with the worst underwater mortgage rate of 56.6%. Earlier this year, Laredo dropped out of the list of top 10 safest U.S. cities, according to WalletHub. Its home and community safety rankings are going down, as is the financial well-being of its residents. It really isn’t surprising that so many people there are now finding that they own homes that are worth less than their mortgages.   

The Least At-Risk Markets

In contrast to these high-risk markets, many areas in the U.S. are enjoying low foreclosure and unemployment levels, as well as low rates of underwater mortgages, with most homeowners enjoying high levels of equity in their homes.  

The South, Midwest, and New England fared especially well in the third quarter of 2023. This won’t surprise savvy real estate investors who already know that these areas of the country have buoyant housing markets boosted by healthy local job markets and/or reasonable living costs. 

Take Nashville, Tennessee. Three Nashville metropolitan areas (Davidson, Rutherford, and Williamson) feature on the least at-risk ATTOM list. This is despite the fact that Nashville is not known for affordable housing, with the average home price in the city now approaching $600,000. 

So how can Nashville have such a stable housing market? The answer is simple: a low unemployment rate (2.9%) and a cost of living that is 2% lower than the national average. At the same time, the average salary in Nashville is $66,962, which is higher than the national average of $59,428. This is why there is very little chance of a housing market downturn here: People will continue buying expensive properties in Nashville because they can get good jobs and their other expenses won’t be as high as in, say, New York City. 

Other cities with similarly upbeat housing market trajectories include: 

  • Knoxville, Tennessee
  • Washington, D.C.
  • Boston
  • Hennepin County, Minneapolis
  • Salt Lake City
  • Wake County, Raleigh, North Carolina   

A special mention should go to Burlington. This Vermont city is prosperous in every way imaginable. According to the report, it has the lowest foreclosure rates in the country (1 in 72,326), the lowest underwater mortgage rate of just 1%, and a very low unemployment rate of 1.8%. All this reflects almost no chance of housing market trouble here. 

Those interested in the Midwest should look into Wisconsin. Several counties in the state have similar economic conditions to New England, especially Dane County (Madison) and Eau Claire County.

The Bottom Line

There is a very valuable decision-making blueprint for investors in the ATTOM report. It pays to do thorough research into multiple economic parameters in any particular area. 

Ask the right questions, such as: Are most people here in secure, well-paying employment? Do they have healthy levels of equity in their homes? And can they afford to live here, apart from the housing costs? 

When these conditions are met, an area will likely enjoy housing market stability for the foreseeable future. 

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

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