Meredith Whitney, Meredith Whitney Advisory Group CEO, joins ‘Squawk on the Street’ to discuss why Whitney believes sports betting has and can further impact the housing market.

It’s almost that time of year! As you make your list of resolutions for 2024—somewhere between “Peloton more” and “learn to make paella”—consider adding a few real estate-specific bullets to the list. 

Not sure what to include? No need to reinvent the wheel. We asked two investors with different strategies, target cities, and portfolio sizes what was on their resolution list for 2024. Let these inspire your own resolution-making!

The Investor

Claire Johnston is an investor and realtor in Minneapolis and currently owns three doors. One is a single-family; another is a duplex she is currently house hacking. Her real estate investments bring in about $4,000/month. 

The Resolutions

1. Build my real estate income to match my W-2 income.

2. Personally purchase a fourplex.

3. Start a real estate syndication.

Why and How?

BiggerPockets: Why these resolutions?

These goals support my overarching life goal of creating a business I enjoy working in every single day that supports me and my community. While my ultimate goal is financial freedom, I am less attached to this goal than I am to creating a meaningful and rewarding daily life for myself and those who work for/with me. Helping others, renovating historic homes, and providing safe homes for tenants are all parts of my business that I find incredibly rewarding.

BiggerPockets: How will you achieve them?

As a huge fan of New Year’s goals, I have found the secret to achieving them is making a plan at the beginning of the year outlining when you will work on them on a daily/weekly/monthly basis. A year is a long time, and it’s easy to lose sight of large goals through the ups and downs.

Creating a plan enables me to show up consistently. Even when it feels like I am accomplishing nothing or going backwards, I find that small efforts done consistently have a greater impact on helping me reach goals than when I make massive efforts but inconsistently.

I also find a self-imposed deadline incredibly motivating, and these deadlines help focus my work time. Every goal will have a few milestone deadlines that I will then track my progress against. 

For example, for my goal of starting a real estate syndication, my milestone deadlines could look like:

• Q1: Finish researching syndications and start taking action.
• Q2: Connect with a minimum of X accredited investors.
• Q3: Pitch X number of deals to investors.
• Q4: Get a property under contract.

BiggerPockets: How will you monitor your progress?

I like tracking key performance indicators (KPIs). Mine are focused on how much time and effort I am putting into a goal vs. an immediate outcome. Here are a few metrics I am using to track my progress:

Build my real estate income to match my W-2 income:

• How many hours per week am I educating myself on real estate-related items?
• How much time am I spending weekly on lead generation activities?

Personally purchase a fourplex in 2024:

• How many deals in the Minneapolis market am I analyzing monthly?
• How much am I saving monthly for a down payment/renovations?

Start a real estate syndication in 2024:

• How many hours am I spending weekly researching syndications?
• How many potential investors have I connected with monthly?

In reality, I have learned that life is complex, and you are not always in control of the outcome of your actions. Instead, for 2024, I am choosing to focus on the effort I put into my goals (see above KPIs!). If, at the end of the year, I can confidently say I put in the effort, I will be content with whatever outcome or progress they bring.

I’ve had years when I completely missed every goal on my list, only to wildly exceed my expectations the next year. Progress is not linear, and allowing myself to set big goals without the attachment to a specific outcome on a specific timeline has allowed me to be resilient in the face of unforeseen circumstances and maintain my commitment to achieving goals over the long term. 

The Investor

Sam Dolciné is an investor and podcast host (Black Real Estate Dialogue Podcast) who invests in the Dayton, Ohio, area. 

The Resolutions 

4. Get my bookkeeping organized. 

5. Get smarter about creative financing.

The Reasons Why and How

BiggerPockets: Why these resolutions?

Bookkeeping: It’s important to understand how your business is doing financially. You may find that you are overspending in certain areas or not spending enough in certain areas. For instance, a typical repair or maintenance item you may have could be done at a lower cost.

I’ll schedule time to review receipts, bank statements, and the accounting software. I may also hire a bookkeeper to do this on a monthly basis.

Creative financing: Off-market deals [from] distressed property owners (e.g., those who need to sell quickly due to a life circumstance) can be advantageous because you may be able to acquire them for less than market value. Creative financing, such as seller financing, can help avoid using the bank. I want to learn more about finding off-market deals and close on at least two using creative financing.

Get the Best Funding

Quickly find and compare investor-friendly lenders who specialize in your unique investing strategy. It’s fast, free, and easier than ever!

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

When you are renowned for your expertise, business becomes easier. Rather than going out and convincing people to work with you, they come and find you. Prospects complete your intake form, follow you on LinkedIn, make requests and are ready to pay. Your reputation precedes you and signing clients seems simple. If you’re good at what you do and you know your stuff, you might be closer to this scenario than you think.

Dillon Kivo helps clients establish their expertise to grow their personal brand and win new clients. As a Wall Street Journal bestselling author of The Authority Playbook and owner of PR company Authority Titans and news site Kivo Daily, his clients include Fortune 500 companies, high-level executives, household-name entrepreneurs and budding thought leaders working on making their mark.

Kivo shared his top ChatGPT prompts to become an authoritative thought leader, based on his five pillars of establishing your expertise. Copy, paste and edit the square brackets in ChatGPT, and keep the same chat window open so the context carries through.

Become known as a thought leader with these ChatGPT prompts

Access mastery

“Mastery is the most basic element of expertise and is only accomplished through dedication to a craft or business,” explained Kivo. To be considered an expert, you have to gain mastery, which he said is, “a highly misunderstood concept.” Contrary to popular belief, you don’t need years of experience and education to build mastery, because “many people spend years of their lives practicing the same subject only to be upstaged by someone much less experienced who happened to discover something that the expert who had been working in that niche for years had never considered.” Use this prompt to find the loopholes and hidden passages reserved for those who know where to look.

“I operate a business in [describe your business and niche]. To gain mastery and establish myself as an expert, I’m looking for potentially overlooked strategies that could propel me ahead in my field. These might include unique topics to write about, untapped client demographics, or innovative approaches within my niche. Based on my business description, can you suggest such strategies or areas where I could focus to develop a deeper expertise and stand out from others with more traditional experience? The aim is to identify less obvious but highly effective paths to becoming an authoritative thought leader in my industry.”

Practice consistency

Consistency will help turn your actions into repeatable results, especially when it comes to your personal brand. “Consistency is a mark of a true expert. Rather than getting lucky and creating the perfect product once, the expert knows how to consistently provide the necessary skill to create the perfect product over and over again, like an assembly line.” Are you doing this with your online presence? Could you honestly say that you are showing up consistently, with a consistent commitment to excellence? “This isn’t something you do with random sprints of energy,” said Kivo, “It’s a pattern you develop over time.” Social media helps you share your expertise on a regular basis, but your message has to match. Check your post consistency with ChatGPT.

“I’ve pasted my recent social media posts below. Could you assess their consistency in terms of language, style, tone, and topics? I am aiming to establish a strong personal brand, and it’s crucial that my content reflects a consistent identity across all platforms. Look for patterns or deviations in how I present my messages, the type of language I use, the overall tone, and the subjects I cover. This analysis will help me understand if I am successfully creating an assembly-line-like consistency in my branding efforts, or if there are areas where I need to improve to maintain a steady and reliable presence.”

Use social proof

In a sea of many companies or experts that all do the same thing, social proof will make you stand out. “The opinions of customers and clients will either drive sales in the future or stagnate the returns that your business experiences.” How often are you collecting reviews? Every compliment, every bit of positive feedback, every time a client says you changed their world, make sure it’s saved and used in your public communications. Kivo recommends you provide, “direct responses to customers on every channel through which they contact you,” and “directly engage your clients however you can.” Use this prompt to provoke email testimonials that you can share far and wide.

“I’m drafting an email to my client to request their feedback and stories about their experience with [describe the nature of your service/work]. This feedback is vital for showcasing the effectiveness of our services on my website and in public communications. Can you help me compose an email that encourages them to share their positive experience, either in response or on one of these platforms [add names of where you want the reviews]? It should convey appreciation for them or their business, highlight the importance of their feedback in helping others [mention specific ways their feedback helps], and assure them that sharing their experience is straightforward and impactful.”

Harness existing knowledge

If you’ve got this far, you have existing knowledge. But you might not be making the most of it. “Experts get their position by proving a deep knowledge and understanding of a niche.” Customers know exactly what to ask them for. Are you clear on what you know, and could you explain who you are and what you stand for in simple terms? Become well known in your field by being synonymous with your craft, which Kivo says is simply, “what people pay you for.” He added that, “many will pay for education, but when it comes to getting a task done, they pay for the educated.” Get crystal clear on what you’re actually selling with this prompt, and use it for meeting new people and explaining what you do on your website or social media bios.

“I work in [describe your industry or field] and create results for my clients like [describe the specific results or changes you bring about for clients]. Based on this, can you help me define the exact niche I own and what I stand for, in simple and effective terms? The goal is to articulate my unique value proposition and expertise clearly, making it evident why clients should choose my services. This definition should encapsulate my knowledge, experience, and the distinct benefits I offer, positioning me as a go-to expert in my field.”

Leverage new skills

“While there is a lot you can do to expand your skill set, the only skills that matter are those that differentiate you from your competition,” explained Kivo. If you learn what everyone else is learning, you’ll get the results everyone else is getting. But you want more than that. Being an authoritative thought leader means amassing new knowledge and skills, and sharing the results with your unique style. Can you teach someone how to do something brand new? Can you be at the cutting edge of your industry and pass on the insights? Position yourself as a thought leader by learning and teaching new material. Figure out what to learn and develop with this simple prompt.

“In my current role as a [describe your current role or position], I’m looking to expand my skill set in ways that set me apart from the competition in [mention your industry or field]. What are the emerging skills or knowledge areas in my industry that I should focus on learning to maintain a cutting-edge position and maximum relevance with my clients? The aim is to identify areas where I can gain new expertise that not only differentiate me but also allow me to share unique insights and teachings with others, thereby reinforcing my position as a thought leader.”

ChatGPT prompts to establish and grow your authority

Become an authority in your field and win the game of business. The more established you are, the more people will seek you out, the less effort it takes to win clients and create results. Access mastery and find new paths to explore, practice consistency and build trust in your public posts, and generate social proof by asking happy clients to share their words. Harness your existing knowledge and ensure it’s clear who you are in the minds of your audience, then figure out what to learn and apply to stay super relevant. Use these ChatGPT prompts to soar your influence to new heights.

A vacation home or short-term rental (STR) can be a fantastic investment opportunity— if you know where to look. Location truly is everything in the short-term rental market. 

As an investor, you’ll be looking for homes in areas that will deliver a good cap rate and rental revenue while still being affordable (unless you have the cash to buy in Malibu, in which case you probably don’t need this article). 

Late in 2023, we covered the top five most profitable vacation rental locations in an episode of our On The Market podcast. In this article, we’ll cover the key metrics that make these short-term rental locations unmissable. 

The data comes in courtesy of the Top 25 Best Places to Buy a Vacation Home list compiled by Vacasa.

What Is a Good Cap Rate on a Short-Term Rental?

But first, what is a cap rate, and what is a good one if you’re buying a short-term rental? 

Quite simply, the cap rate is the number you get (in percentage) when you divide a property’s net operating income (including insurance and maintenance costs) by its current market value. The number you get is the property’s annual yield or return you will generate as an investor. 

Obviously, the higher the cap rate, the better the return on your investment. As a general rule, a cap rate of under 5% is considered low in real estate. Anything between 5% and 10% is the ideal cap rate. Cap rates of over 10% are relatively rare, but they do exist, as some of our top vacation rentals will prove. 

They might not be where you expect, though. As we all know, the pandemic housing market boom caused home prices to go through the roof in many locations. When home prices appreciate dramatically, the cap rate is automatically lowered, which can make an investment too expensive to be worth it. 

Top 5 Best Places to Buy a Short-Term Rental

Instead of chasing the most popular vacation destinations, consider making a savvier choice that will deliver better ROIs. Here are some of these savvy choices.

1. Lake Anna, Virginia

• Cap rate: 10.32% 
• Median home sale price: $405,500
• Annual gross rental revenue: $64,121

The crème de la crème of vacation rental destinations in 2023 is the charming lakeside destination in Virginia. Lake Anna is the state’s third-largest lake, with 200 miles of sandy beaches. 

Why is this such a popular destination? Its location right between Fredericksburg and Richmond is one reason, but we bet that the pristine beaches, clean water, and overall high-end feel of this vacation destination is what makes it so desirable, especially in the summer. 

And for a lakeside destination, home prices are very reasonable. Compare it with the median home price at Lake Tahoe, for instance—an eye-watering $907,000.

2. Okaloosa Island, Florida

• Cap rate: 9.08%
• Median home sale price: $360,000
• Annual gross rental revenue: $53,832

It’s unsurprising to find a Florida location among the most popular vacation locations, but if you’re looking at Florida as an investor, look away from the obvious destinations (e.g., Miami, West Palm Beach, and Tampa) and toward the hidden gem that is Okaloosa Island. 

Located on Santa Rosa Island and boasting three miles of ultra-white sandy beaches, it’s not an off-the-beaten-track destination by any means, but it does offer a somewhat more relaxed feel thanks to its location in northwestern Florida. A big draw for tourists is how small and cozy this place is, with everything within an easy walking distance. And a median home price of just $360,000 is affordable for such a great location.

3. Sandbridge, Virginia

• Cap rate: 6.47%
• Median home sale price: $928,900
• Annual gross rental revenue: $88,702

Sandbridge, Virginia, is very close to Virginia Beach, but it couldn’t be more different. There are no hotels here, which means visitors enjoy a relaxed and secluded vibe, with sand dunes, beaches, and a wildlife refuge to explore.

It’s not a cheap destination, but guests are prepared to pay premium prices for the exclusive vacation atmosphere this place offers—hence the excellent cap rate.  

4. Rehoboth Beach, Delaware

• Cap rate: 6.46%
• Median home sale price: $618,000
• Annual gross rental revenue: $58,992

Rehoboth Beach offers a traditional coastal charm that’s increasingly a rarity, which explains its popularity with vacationers. From a scenic boardwalk to narrow streets with restaurants and shops, it’s a classy destination that draws tens of thousands of visitors during the summer months. The relatively high home price is worth it here because guests are willing to pay top dollar for the vintage seaside town feel. 

5. Navarre, Florida

• Cap rate: 6.42%
• Median home sale price: $420,000
• Annual gross rental revenue: $47,531

Another picture-perfect vacation rental destination that’s somehow still affordable, Navarre draws in huge crowds during the summer thanks to its unbelievably beautiful beach. The beach is not actually composed of sand but quartz, which is where the dazzling white color comes from. Water sports, snorkeling, and swimming are the most popular activities here, so looking for an oceanfront property is well worth the high short-term rents you’ll be able to command. 

Do Your Homework

It pays to do your research when looking for a short-term rental opportunity. Steer your search away from major vacation destinations that are oversaturated with hotels and have unaffordable home prices. Instead, look for smaller places with a high-end feel that are still popular with visitors but are still able to maintain a sense of identity that’s different from your average resort town. 

Pristine beaches are reliable draws for the summer, but you can also look for towns with a unique vintage feel (see Rehoboth Beach) or a lakeside charm that will save people time driving down to the coast. 

And remember to look up those cap rates: They’ll give you a good idea of whether a vacation rental investment in your chosen location is worth it.

The Most Profitable Places to Buy a Vacation Rental Property

More than half of the markets we’re highlighting have vacation homes either under or around the median home price of the US, so you don’t need to splurge to buy your perfect beach-side short-term rental. Learn what the top markets are and where to find the full list!

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

The run up to Christmas is traditionally the golden period of the year for retail, but this year it seems like stores are not seeing the same volume of custom. Far from creating a sales boost, Forbes’ senior contributor for luxury retail Pamela Danziger suggested shoppers are shunning the last-minute rush and instead seeking discounts at other times of the year, spreading the cost of Christmas.

This news comes as a host of retailers, such as Best Buy, Lowes and American Eagle, are cutting sales forecasts for the holiday period based on customer indifference.

The retail landscape is competitive at the best of times, but with fewer people buying, competition will be high to entice those who are ready to spend in the run up to Christmas.

Make Your Business Stand Out

There are a number of ways that businesses can get themselves noticed, even when competitors are all vying for the same customers.

1. Remove roadblocks

Whether you sell online or in physical stores, it is important that you remove any roadblocks between your customer finding what they want and completing the purchase. Making the process as frictionless as possible is the key to gaining buyers and to preventing them from abandoning their customer journey and finding somewhere else to spend money.

For online stores, roadblocks might include having to register an account to make a low value purchase or a confusing website layout. For physical shops, it could be an inability to touch and inspect the product or long queues at the till.

Try and view your business as a customer sees it and consider what might prevent them completing their transaction. The easier the process, the more customers will choose you over the competition.

2. Get creative online

Part of the battle to make your business stand out happens before the customer arrives in town or begins browsing online. If you can capture the attention of your target audience in advance, they are more likely to keep an eye out for your brand.

Use social media to speak to the people most likely to buy from you. Target them with content that will entertain them, touch their emotions, solve their problems or add value to their decision making.

By engaging customers on social media, you build a bond with them that endears them to your business, gaining an advantage over your competitors.

3. Review the data

If you have been in business more than a year, you already have a resource to help you predict customer behavior this Christmas. Look back at your sales data to understand when shoppers made purchases and what it was that they bought. Look at which items they bought together and consider the placement of the most popular items in your online or high street store last time around.

This year, optimize your layout, promote the popular items, upsell with the products you know work well together and ensure you have enough stock and staff for those times when you can expect a rush. Spot the trends from the previous Christmas to understand what to expect this year and how to improve on that performance.

4. Invest in people

If you have a physical shop, your staff come into their own in the rush of Christmas shopping. As December goes on, online sales fall and people return to shops. Part of the reason is the concern that online purchases won’t arrive before the big day, but there is also a romantic view of the jolly festive atmosphere on high streets. And it is your staff who facilitate this.

If your employees create a welcoming and warm atmosphere, it can make your business stand out from your rivals. This means you must invest in your people and ensure they are happy and motivated, even at this most stressful time of year in retail.

Make work fun for them and promise them incentives for their hard work, such as a team day out in the new year.

5. Work with a charity

Christmas is a time for thinking of others, but that ideal can fall by the wayside as retailers become more competitive in the run-up to Christmas. By taking time to highlight a charitable collection, competition or donation scheme, you can show that there are other benefits to buying from you over a competitor.

Highlight a cause close to your heart so that customers can see it is a genuine collaboration and not just a cynical ploy. Promote the activity so that your target audience knows what is happening and can help you in your campaign.

Christmas is a great opportunity to bring in revenue, but the competition is fierce. By finding ways to stand out from the crowd, you can claim your slice of the hard fought custom this year.

David:
This is the BiggerPockets podcast show 851. What’s going on everyone? This is David Greene, your host of the BiggerPockets Real Estate Podcast, the number one real estate podcast in the world. Each week we bring you the knowledge, how-tos, and the market insights that you need to make the best possible financial decisions you can in order to improve your financial position and build the life that you’ve always wanted. In today’s show, Rob and I are interviewing Jason Velie who built a portfolio that now pulls in six figures a year. By investing in an often overlooked asset class, Jason was able to leave his W-2 job this year after replacing his income from real estate, the holy grail, the goal of every single real estate investor, and we are going to share exactly how he did it and how hopefully you can too. I’m joined today with my co-host, Rob Abasolo. Rob, how are you?

Rob:
Good, man, good. We get into some very, very good conversation about what a true worst-case scenario deal looks like. We’re going to give you some insight on an underrated asset type that might be the way for you to get into real estate investing, and we’re going to show you how to take a leap and scale into multifamily if that’s what’s next for you.

David:
And before we bring in today’s guest, Jason, a quick tip for all of you loyal listeners. Have you ever listened to a podcast and not known what the word that someone used meant? Maybe you’ve been to a meetup and you heard people talking about a type of real estate investment opportunity and you just weren’t sure what they were getting at. This may seem simple, but remember, you can always google what a word means. I love this. Jason talks about how he did it by listening to the BiggerPockets Podcast and I did it myself. This is one of the ways that I learned to speak another language. Google the words, you will get an understanding of what they mean, and it will open your mind to how they fit into the overall real estate investing picture, your confidence will grow, I promise. Jason, welcome to the show. How are you doing today?

Jason:
Doing great, man. Excited to be here. It’s an absolute honor. How are you guys?

David:
Jason lives and invests in North Carolina, a state that I’m going to be visiting early 2024, I am fascinated with that place, has been investing for just four years and has done 29 deals in that time. His portfolio consists of two multifamily buildings, an eight unit and a 15 unit, both in North Carolina. He’s also a part owner in two other multifamily properties, plus he has 13 active flips at the moment. That’s insane. He’s got $3.5 million in equity over his portfolio and an overall net cashflow of $10,000 a month that does not include his flips. This is a real estate stud that we are bringing to you all today. Jason, great to have you.

Jason:
Thank you so much. Happy to be here.

David:
Now, it hasn’t always been a totally smooth journey to build a portfolio that you have, Jason. Let’s start right in the middle of your first deal ever. This was 2019, you’d just bought a ranch house that you found on Craigslist. Great place to start any kind of a journey. I love where this is going right off the bat. Things started to go bad at the home inspection. What went wrong there?

Jason:
On paper, it looked like a great deal. So I’m a numbers guy, that’s my background, and so numbers looked like it was going to be a great rental, and that was my intention was not to flip it but to keep it as a rental. I had no idea what I was doing construction wise. I knew the numbers but not construction. So when I went to look at the property, it looked fine. It looked livable. I didn’t think it really needed much of any rehab. Maybe a little carpet, but not much at all.
And so then to protect myself, I thought I was being smart by hiring a home inspector to check behind me to kind of cover some of that slack that I didn’t know, and I was an idiot and looking for the cheapest home inspector I could find and found the flat rate home inspector that only charges 300 per home inspection regardless of the size of property, and he missed every single thing on that home inspection that I missed that he should have found. So there ended up being mold inside of the cabinets. The cabinets were falling apart. There were termites in the crawlspace. The roof had to be replaced. I mean, you’re talking major expenses that neither of us caught.

Rob:
Man. Okay, so let me ask you this. Now in retrospect, obviously that was a pretty cheap inspection, but is there sort of like a price point that you’re more happy to pay now? Are you more happy to pay for more expensive inspections?

Jason:
I don’t know if there’s a particular price point, but maybe more along the lines of referrals from other sources. So particularly go to your agent friends and say, “Hey, when you’re selling a property, who’s the home inspector that you hate for the buyers to have, the home inspectors that pick apart the properties that you’re listing?” Those are probably the good ones that you want on your side inspecting the ones that you’re trying to buy.

David:
That’s a great piece of advice and insight right there.

Jason:
Yeah, absolutely. I think the easiest thing, best thing to do, and I wish I would’ve been smart enough back then to do this, would be to find somebody that’s in the position that I’m in now that has done this several times, that knows what to look for, and just ask them to come with you. If you have to pay them to do it, that’s fine. Bring somebody more experienced that knows what to look for and they’ll help keep you safe.

David:
I love it. So let the home inspector find the problem and let this person that you’re talking about interpret the problem for you so they can tell you if it’s going to be a big problem or a small one.

Jason:
Absolutely.

Rob:
So you had this inspector. You get what you paid for. They ended up being super, super cheap. Then as I understand it, things didn’t go so well with your contractor on that property. Can you tell us a little bit about how much you lost with that contractor?

Jason:
I know, it was about $16,000 that I could not really afford to lose.

Rob:
Why did you lose $16,000 specifically? Did you just come in over budget? Did the contractor walk out on you? Tell us a little bit about that.

Jason:
Yeah. So a lot of it was my naivety around contracts and scope of work with the contractor. The contractor had asked for a fairly large initial draw to get started with the job, which I thought was reasonable because some of the items like the roofing material and HVAC were going to be pretty expensive, and then the next part of the draw would be him getting paid after HVAC being done or after the roof being done. Well, problem is he had the HVAC guy go install the HVAC and then get a draw from me, and then I found out later that he never even paid the HVAC guy so they came hunting me down for the money. And then he sent me pictures for part of the roof that he finished and he told me that he finished the roof. I wasn’t smart enough to go out there and get my eyes on it and check the work myself, and it turns out that he left a entire portion of the roof completely uncovered, raw sheathing exposed to the elements, and here I am having just paid him extra money.

Rob:
Dang. All right, so you had a pergola, a pergola inside your house. Not an ideal place to have one. I feel like all good real estate investors go through this. I lost about 6,000 bucks to a contractor who said he was doing all this work. Same thing, he sent me photos and I was like, “Great,” and it turns out that he was only showing me partial photos, and I felt kind of dumb because I had a working relationship with him on other projects.

David:
So things get worse from here. Were you able to rent out this property?

Jason:
I was not. The house was unlivable, unsafe as it was.

David:
All right. How did things turn out when you weren’t able to put a tenant in there and you lost money on the contractor and you had an issue with all the stuff that was missed in the home inspection?

Jason:
Yeah. So I ended up having to just float the PITI payment of $351 a month for roughly two years before I eventually had cash to have another contractor go back in and actually complete the work, and then at that point, I absolutely hated that property. I couldn’t get rid of it fast enough. I remember those drives, it was like 35 minutes away from my house and just driving down the road and just seeing certain trees getting close to that house, I’m like, “God, that stupid tree. I’m tired of seeing that tree.” We’d get to that house and it was just… I was just so ready to be done with it, and so I ended up selling it. At the end of the day, I should have lost a lot of money on that, but because, as we know, real estate is forgiving with time, the market appreciated in those two years and I was able to basically break even at the end of it.

Rob:
In Vegas they say a push is a win. So honestly, I don’t think that’s all that bad. So is this the scenario that you had imagined when you were running your numbers on the deal? I got to imagine you probably had different expectations for how things were going to turn out.

Jason:
Oh yeah. I knew it was going to be terrible and I still bought it anyway. Yeah.

Rob:
Oh, you knew.

Jason:
Of course not. Of course not.

David:
That was sarcasm, Rob. Jason, very well delivered.

Rob:
You got me. Usually I can dish it out, but it’s rare that you get me. All right. Well, now I feel dumb.

Jason:
In all seriousness though, I knew when I looked at the numbers, the absolute worst-case scenario, if I couldn’t rent it out, if I couldn’t get a tenant, whatever, that I was going to have to come out of pocket that $351 a month, and I knew that with my personal finances, I could handle that, that if I had to float that for however long, it wasn’t going to put my family’s financial stability in jeopardy.

Rob:
Yeah, yeah. Well, we know that things did get better from there, based on the numbers that we ran at the top of the show, and we’re going to break down those strategies he used to get there after the break.

David:
All right, welcome back. We’re here with Jason Velie who just walked us through his first deal, a bit of a nightmare where he learned some lessons the hard way. Luckily, Jason’s story is about to take a turn for the positive. All right. From there, Jason, you continued your investing journey by flipping an unusual and some would say underrated asset class, manufactured homes. We don’t hear about these very often. Can you tell us what some of the advantage are with this asset class?

Jason:
Absolutely. So I’ll clarify just by saying that I only flip them when they come with the land. I don’t do anything with them if they’re just literally mobile homes. But for me, in the area that we live in there are a lot of manufactured home neighborhoods. They’re everywhere. So there’s a lot of opportunity. There’s lower barrier to entry because the price points are lower, so either the amount of cash you have to bring to the table or borrow is lower which also helps with affordability, selling, especially with rates as high as they are right now, getting them sold quickly. That sub-300 price range is still going very quickly in our area.
One of the biggest things though is that I’ve found that most investors, most house flippers, especially the ones in my area, have shied away from flipping manufactured homes primarily because they don’t realize that when they go to sell it that whoever is buying it, as long as they’re buying it as their primary residence, can still get a mortgage on it the same way as you can a stick-built house. You can still get conventional FHA, USDA, VA as long as they’re buying it as a primary.

Rob:
Dang, that’s crazy, yeah. So I guess the misconception there because I assumed that there was some kind of financing on it, but I assume that because it’s manufactured, it’d be like a 10 to 12% interest rate. But you’re saying you can actually go and get these homes with just regular loans?

Jason:
Yeah. There’s a few qualifications that have to be met, but yeah.

Rob:
And what would you say the biggest advantage of this asset class is?

Jason:
To me, the biggest advantage is that there’s so much less competition. I mean, I have so many wholesalers in this area that they know I only buy great deals, and so I may not be their top buyer for their stick-built properties because they’ve got John Doe next door that’s willing to spend more money than I will, but John Doe doesn’t touch the manufactured homes so I’m still at the top of their list for those. So I’m able to get a lot more deal flow by doing those.

Rob:
And out of curiosity, what is your average return on a manufactured home flip?

Jason:
Yeah, I’d say on the low end, about 35,000 unless something drastically goes wrong, and on the higher end, I’ve made a little over a hundred thousand on double wide flips before.

Rob:
Really? Dude, consider my mind blown. I didn’t even know. Maybe I just don’t… I’m picturing like a incorrect home. I’m thinking a very small, like a trailer home. But is a manufactured home, is that what we’re talking here, or is it actually like a stick-built home but just on pier and beam blocks?

Jason:
Yeah. No, so I literally mean either a single wide trailer or a double wide trailer that is on a permanent foundation. The wheels and the tongue have been removed. They qualify for the same types of financing.

David:
Let me ask you on that question here. When you were financing these, were you using a mortgage broker? Was there a local bank you were using? Who was the one determining what would qualify for which type of loans?

Jason:
Yeah. So when I was buying them, I was buying them with short-term money, of course. So the very first manufactured home flip that I did, which was the first true flip that I ever did, was a double wide, and I didn’t realize that when I got it under contract, but after calling a bunch of hard moneylenders, I realized that most hard moneylenders don’t want to touch these either. There are not a whole lot of them out there that do, but if you just hit the phones, look for them. I mean, it took me maybe 20 or 30 phone calls before I found one that loaned me a hundred percent of the purchase and rehab on a double wide flip, even though I had no experience at all. They’re out there.

Rob:
In this instance, so that’s like a hard moneylender, are they taking the actual manufactured home as collateral? Does it work the way a typical flip would work?

Jason:
It does. So when a manufactured home is put on a permanent foundation, those cinder block piers, what’s supposed to happen is the title is supposed to be canceled with the DMV, and at least in North Carolina, there’s a form that’s supposed to be recorded with the county called a declaration of intent to affix to real property, and that’s basically you communicating to the county that hey, this is no longer a mobile home, the title has been canceled, and thus you can now tax this property, this building, as real estate as opposed to only taxing the land as real estate. Once you surrender the title and file that form, it then becomes real property.

David:
All right. That is great to know. And on that topic, what are some other considerations that people need to know if they also want to invest in this asset type?

Jason:
Yeah. So I think one of the most important things is that people need to know that these do not make a good option for the BRRRR strategy, reason being is you can’t get an investment property loan on a manufactured home. So you can get the loans as a primary but not as investment property. So if you were trying to do the BRRRR method, you wouldn’t have a good refinance option to get out of it to be able to hold it. So unless you were using all your own cash and okay with leaving it tied up there, that wouldn’t be a great option.

Rob:
Yeah, and just to run us through the BRRRR method, it’s you buy the property, you rehab it, you rent it out, and typically after rehabbing it and renting out, you can go to a bank and get a cash-out refi to take all the money, ideally, out of that property that you invested in. Sometimes you leave a little bit of money in and then you repeat that process. And so that is a really, really powerful tactic that people use to scale up their real estate portfolio in real estate. David, you’ve done that so much in your career, I’ve done it a couple of times, but you’re saying that that very popular technique, not particularly applicable to the manufactured home side of things.

Jason:
Right, exactly. The other couple things that are important to know with these is you have to be mindful of the age of the home. I try to not buy any that are older than 1990. I’ve made slight exceptions before, but reason being is most of the lenders out there, as far as the ones that will be lending to your buyer when you resell it as their primary residence, they’re going to tell you that they won’t lend on these if they’re more than 20 years old. Almost every lender I’ve talked to has said that. However, almost every one of those lenders breaks that rule and still goes beyond 20 years old anyway.
When you get older than about 1990 or so is whenever they can start to scrutinize a little bit more some of those qualifications. So they might look a little bit more closely at, well, has the structure ever been modified, was this deck permitted on there, and they might try to find other ways to not finance it. But if they want to and they don’t find any other issues, to my knowledge, they’re able to finance anything that is newer than 1976, I believe. So I believe it was ’76 when the Department of… Or no, when HUD started regulating these, allowing them to be financed.

David:
So we’ve got a couple notes here. You’re probably going to sell to a primary buyer, not to an investor. You’re probably not going to be able to refinance out of it to hold it as an investment property, so it can be tougher to scale these things if you want to build your own portfolio that way. But they do make good flips because the person buying it can often use conventional financing when it’s a primary residence. The age of the home will come under scrutiny, so anything built before 1990 can be tricky unless they modified the structure. And then there’s also something about whether it’s been moved. Can you talk about if the home has been moved and how that affects the ability to finance it?

Jason:
Absolutely. So I have not flipped one that has been moved in the past, luckily, but from what my lenders have told me, if a manufactured home was ever set up on a site somewhere and then moved to its new site, it can only qualify, out of all those financing options, the only one it can qualify for for that end buyer is a VA loan. And if it’s been moved twice or more, then it will not qualify for VA either.

Rob:
And so my assumption on this is because once you move it a couple of times there is some structural integrity that may not be fully a hundred percent intact, and so a bank doesn’t want to take the risk on financing it.

Jason:
I don’t know for sure, but that would be my assumption too. That’s also why once those properties get to be older than around 1990, they might also look with a little bit more scrutiny on that. I’ve even heard of some lenders wanting proof that that property has never been moved, and in 99% of cases, there’s not going to be any way for you to prove that because whoever originally bought it isn’t going to have all those records from that long ago.

David:
All right. So you started out flipping these homes, got to know the asset class at a pretty high level here. How did BiggerPockets play into this journey? When did you find it and how did you use BiggerPockets to help?

Jason:
Ah yes, I love this question. Now BiggerPockets has literally changed my life because I was under contract to buy that first house as a rental that we talked about that was a bad deal whenever I went to a friend’s wedding and met somebody that flips houses, and I thought that was really cool, and he recommended that I start listening to the BiggerPockets podcast. So I did and I started, I don’t know, somewhere around episode 350 or so, and I just got addicted. I just started listening to every episode all the way down, and it was because of the BiggerPockets podcast that I learned of specifically about private lending and hard money lending, and being in finance, the light clicked in my head that, oh wait, this is possible, if you find a good enough deal, people will give you all of the money for it. But yet I also I believed it because I could understand it’s collateralized by a property that’s worth more than that.
And so the very next month, I bought that first bad deal in October of 2019, the very next month in November was whenever I bought my very first flip, which was the double wide, using a hard money loan, all because of what BiggerPockets taught me. I mean, nearly everything that I learned came from these podcast episodes. If it wasn’t directly expressed in discussion, certain terms that I didn’t know, I would pick it up and then I’d go to Google and type it in and find out, well, they just mentioned this word or this acronym, what does that learn, and then I go further down the rabbit trails and in the forums. I just love every second of it.

David:
I think we can all agree there’s nothing like BiggerPockets out there, there’s no company, there’s no website, there’s no podcast. I love how it became a framework for you that you would listen to it and if you heard a term you didn’t know, you’d go google it. Right? That’s one of the ways that I learned Spanish. I think I was telling Rob about this in convo that I would listen to music and try to translate the American song into Spanish, and when I hit a word that I didn’t know how to translate, I would go google it. Finding little tricks like that can make learning things a lot easier than when you’re just wandering around in an ocean of stuff you don’t understand and don’t know where to go. So good on you, dude. I love hearing this story. So after three of these flips, you then scale into multifamily and you started right off with an 8 plex. So in this section, Jason, Rob and I will take turns asking you questions to get to know this deal. Question number one, we know is 8 plex, but when did you buy it?

Jason:
I bought that in August of 2021, so just over two years ago.

Rob:
Awesome. And can you recap for us how you found it?

Jason:
Yeah, yeah. I looked on my county GIS website for the little yellow skyscraper icons and built out a list of multifamily owners in my area. Sent out about 40 handwritten letters and got three phone calls from it and one deal out of it, which was the one we’re talking about.

David:
How tired was your hand?

Jason:
Very. I ended up going a different route afterwards where I wrote out a handwritten letter on just a printer sheet of paper with no lines on it, but I left the name and the address blank, and then I just photocopied that letter and then used that same pen to write in the people’s names and addresses so it looked like a legitimate full handwritten letter from me but with a lot less work.

David:
All right. And how much did you buy it for?

Jason:
I bought that for $450,000.

Rob:
And how did you negotiate it?

Jason:
When the seller first called me, I tried to get him to give me a price and he would not. So I went back and looked at my numbers and determined what I thought it was worth where the current rents were. It was a little bit arbitrary. I wasn’t looking for specific cash on cash return, and it was also a little bit more about what the pro forma would be, the potential of the property as well, and so I just based off of that. Came back to him with a number at 435 and his response actually was, “Wow, sounds like you know what you’re talking about.” Or no, he said, “Wow, sounds like you did your homework,” and I was like, “Wait, really? You think that’s a good offer?” And so then he goes and talks to his wife and his daughter and comes back and he asks if I could come up to 450, and of course I’m just like, “Yeah, take my money,” because I knew even at that time that property was worth at least 900,000.

David:
All right. And how did you fund it?

Jason:
I funded that deal in two ways. So the majority of that deal came from a commercial loan from my local credit union so I had to put 20% down, and the down payment actually came from a single wide trailer that was on land that I had bought about seven months prior. I bought it from a wholesaler for $15,000, the trailer on the land. I have no idea how the wholesaler got it that cheap, but it didn’t need any work, and then I intended to keep that as a rental and I did for a few months. And then when I came across this deal in the eight unit, I asked the seller if he would be willing to allow me to schedule the closing for three months out to give me enough time to sell this trailer in 1031 exchange into this property, and he said, “Yeah, I understand what you’re trying to do, that’s fine.” I reassured him that I had another way to close if the 1031 fell through just to make sure he was cool with it.
So I ended up selling the trailer about seven months or so after I bought it for $98,000, and 1031 exchange, the net proceeds in the exchange ended up being pretty much the exact $90,000 or so that I needed for my down payment on that property. Oh, and actually it gets even better, the $15,000 I borrowed from somebody else.

Rob:
So you used OPM, other people’s money.

Jason:
Yep.

Rob:
I didn’t even know you could 1031 a trailer. So honestly, this is all very, very cool to hear that you’ve figured out something really cool. What did you end up doing with it?

Jason:
I’ve kept it, and I did think that I would do a cash-out refi at some point, but then rates started skyrocketing so I have not pulled any cash out yet. I think I owe around 340, 345, and at the time that I bought it, the average rents were about 675. Market rents were about 850. Well, now market rents are like 1,200 because of the rapid rent growth that we’ve seen over here. So the property that I bought for 450 is probably now worth around 1.2 and it’s cash flowing somewhere around four grand a month. So a $15,000 loan from somebody else turned into nearly a million dollars in equity and four grand a month in cashflow. It’s incredible.

Rob:
That’s crazy, man. I mean, congratulations. What a rockstar story. I’m so happy to hear. Really, I’m just totally, I’m tickled, if you will. You’ve tickled me, Jason.

Jason:
I don’t know how I feel about that.

Rob:
If there are people listening who are thinking, “Man, I wish I could look into a deal like that,” what would you recommend listeners should be doing if they want to make the same kind of deal happen?

Jason:
Look for them. Simple as that. There’s a quote, I forget who it’s from, that’s something to the extent of opportunities of a lifetime show up about twice a year if you’re looking for them, and that’s very much so been the case for me. I mean, you would say that trailer deal that I bought was a once in a lifetime deal or a unicorn, and then you would say this eight unit would be, and you would say the same about many others that I’ve purchased. And so I would just say just get out there, do the work, look for the deals, and ask for what you want. If I wouldn’t have asked that seller for the three months to be able to 1031 into that, then I would’ve never known that it was an option. He would’ve just assumed we were going to close sooner.
The other aspect is stay educated on the available types of financing out there for different products. Whether it’s a commercial loan like I got on that eight unit or seller financing that I got on a 16 unit or private money that I got on a 15 unit that I’ll refi out of, having all of these tools in your tool belt will help you to take advantage of more of these opportunities as they come across.

David:
All right. So you started with $15,000, you turned that into an eight unit building that now cash flows $4,000 a month. Have you ever considered going to a swap meet? You could probably just walk in with a safety pin and leave with title to the entire thing. You’ve got a talent, my friend.

Rob:
You do.

David:
So now we also should highlight here, this is not just pure ROI. There was some work that went into turning the property around, executing on a plan. You did something better than what the previous owner was doing with the property, and that is why people need to be listening to podcasts like this one. Finding the deal is part of it, but then actually turning the property around to get it to perform well does take some skill. So let’s not forget that while part of the deal is running the numbers, another part of it is actually executing on it, and that’s what I love about your stories. You started off not knowing how to execute on this deal. You learned how to execute. Now you’re applying your execution skills to bigger deals and you’re crushing it. So Jason, thank you for coming on to talk about your story.
To recap your portfolio, for anyone wondering, you now have 23 units across two properties plus part ownership on two other properties for 44 doors altogether with weighted ownership. You didn’t say this, but I’m guessing that the people in those other properties wanted you as a consultant on that deal because you clearly have done your homework like that first seller said. You’re making $120,000 in cashflow a year. You’ve replaced your six-figure salary with real estate income. Tell me what life looks like for you now.

Jason:
Oh, today it’s so much more fun. Instead of having to wake up at a certain time every morning and be at a desk and deal with particular clients or bosses, I get to wake up when I want to and when I wake up, it’s something new every day. I wake up and say, “Okay, what do I want to get done today? Which properties do I want to go check on today?” It’s something new every day. It excites me.
On the financial side too, for the first several years of doing this we made an effort not to cannibalize any of our real estate earnings early. We reinvested everything back into the business, into the rental portfolio because my business model from day one was flip single family to buy and hold multifamily. Now we’re finally at a point that we’re starting to take advantage of some of the fruits of our labor that we’ve been blessed with, and we’re able to buy back some of our time by doing things like hiring a landscaper to cut the grass and a house cleaner to come clean the house. The wife and I don’t have disagreements about money anymore because we’re more relaxed around the subject and so rewarding. As much as I love real estate, the joy of giving is even that much greater.

David:
Well, thank you for that, Jason. Appreciate that, man, and thank you for giving back to us and all of our listeners by sharing your story and what you did to get there. I hope this leads to many more people ending up with a similar result to yours. If you want to connect with Jason on BiggerPockets, Instagram, or LinkedIn, you can find his username and info in the show notes for this episode. You can also find Rob and I’s contact information there as well.
You should also consider checking out a Seeing Greene episode that I did with Kristina Smallhorn that gives more context on manufactured homes. That’s episode 771 that aired in May of 2023 which is right around the same time ironically that Jason left his full-time job. We’ve got episodes coming up on this feed. Next week we will have Dave Meyer and James Dainard breaking down the state of real estate investing, including strategies that are working and what to watch out for. You don’t want to miss this one, so make sure you check out next week’s episode. Jason, anything you want to say before we let you get out of here?

Jason:
No, just thank you guys again. It’s been such a blast and a full circle moment for me. I’ve had a great time.

Rob:
Awesome, man. Well, you know the cool thing is you’ve inspired us and you’ve inspired so many people that will be listening to this episode for the first time, so it truly is full circle.

David:
Thank you, Jason. This is David Greene for Rob tickle-me-Elmo Abasolo signing off.