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Look around you. Not as many people are picking up the daily newspaper or sitting through long commercials on TV. However, they do have one thing in common. Regardless of the demographic, they are scrolling social media on their phones.

According to Pew Research, 70% of Americans check Facebook daily. It’s second nature for youth to use Snapchat, Instagram and TikTok multiple times a day. That’s how they communicate, read the news, raise awareness — and shop.

So it’s not surprising that brands are allocating larger chunks of their marketing dollars to social media. And within that ad spend, influencer marketing has been on a steady rise. Here are three reasons why.

1. Consumers Identify With Influencers

Millions of people watch influencers make their morning coffee or run after mess-making toddlers because they can relate. People may enjoy seeing Pinterest-perfect pictures, but they also love to get a peek of real life.

There are obvious benefits of hiring celebrities to plug your product. They’re well-known, plus there’s the aspirational glam factor. However, when a movie star says she packs cute notes in her kids’ lunchboxes daily, people don’t always buy it. Her claim doesn’t seem to align with her jet-setting lifestyle.

But when a mom influencer they’ve been following for years says the same thing, they believe her. What’s more, they’re likely to follow her lead. Companies can capitalize on this relatability to increase brand awareness without making it feel like a paid commercial.

Influencers feel more accessible. Many even reply to messages on social media. So when they recommend a set of comfy pajamas, consumers are not hesitant to click the affiliate link.

2. Influencers Can Yield Better ROI

When a Hollywood A-lister touts your eye cream in a TV or print ad, your sales may go up—but it’s hard to tell by how much. Furthermore, the bump probably won’t be immediate. Influencers, on the other hand, drive sales conversions through direct links, meaning companies can get a faster return on their investment.

Since many influencers work independently, brands also save money when there’s no agency in the equation. If the influencer’s social media reach truly reflects the numbers in their media kit, your brand can get more impressions for less cost.

Once influencers truly like your product, they can go from being short-term brand partners to long-term brand advocates. Each time they have their morning vitamins or use that hair tool, they are advertising for you. Followers often send messages asking for links and discount codes even after a collaboration has ended. That’s another reason why longer-term collaborations are becoming more popular than a single post.

Evaluating the key performance indicators of influencer marketing is easier than it is for billboards, television commercials or print ads. Each social media post yields detailed stats of what was achieved with that particular content. It’s straightforward to see how many people liked, commented, shared and saved the post. You can also see how many times a link was clicked.

3. Influencers Forge More Authentic Connections With Diverse Audiences

Since influencers have unique follower demographics, brands can use them to reach specific segments of their customer base. Consumers click links shared by their favorite influencers because they look authentic. While advertising agencies do have access to diverse models, they’re just paired with other actors on a film set.

In contrast, when an influencer from a specific ethnicity shares your product, interactions with their family members are real. Consumers have seen their kids, spouse and pets in their Instagram stories. Their devoted followers will tune into their shopping livestream or try their recommended spice blend because they are a genuine family.

Influencers can also be more creative. They churn out fresh content that is often straight from the heart. Their fans can tell it’s not heavily scripted. Influencers can also have a faster turnaround. Without an agency involved, there is less red tape. Your marketing team sends the influencer a creative brief, and they can respond directly.

Choose Your Influencer Carefully

With so many benefits, influencer marketing is not going away soon. However, there are a few words of caution. Make sure the influencer you choose aligns with your brand values. Someone might be very popular, but if they’re controversial or politically tone-deaf, they could damage your brand.

Don’t be overly impressed by the sheer number of followers an influencer has. The ideal influencer should have a loyal niche following. Some micro-influencers can produce better results because their following is very engaged. Sign a collaboration based on their organic reach. Ask for stats and insights for the last three months instead of that one lucky post that happened to go viral.

It’s definitely worth investing time to find the right influencer. They can do wonders for your brand with less money — and more natural flair.

David:
This is the BiggerPockets Podcast show 738.
Never be discouraged by a lack of results. Only get discouraged when there is a lack of progress or pattern recognition. You may take the wrong path nine times, hit a dead end, come back, but now you know the wrong nine paths. And then the next path you take will be the right one and you’ll have advantage over everybody else. Some people get lucky and they hit the right path on the first try, and then they assume this is how real estate investing works. And then they take the next nine paths for all the wrong ones and they lose a lot of money because they made those mistakes. So as long as you are recognizing patterns in what you did, like you said, this is not the right realtor, this is not the right type of property, this might not be the right market, you are making progress, okay? Don’t just measure how many deals you close as the only result that you’re measuring.
What’s going on everyone? This is David Greene, your host of the BiggerPockets Real Estate podcast. You already know this. We’re the biggest, the best, the baddest real estate podcast in the world with the two most handsome co-hosts in this space as well. This is me and Rob Abasolo bringing the heat today with our last episode with our three mentees. In today’s show, we are going over Philip, Wendy, and Danny’s Journeys. Their stories give you an update on where they are in their real estate investing journey, what’s gone well, what hasn’t gone well, and what they’re going to be doing in the future. It’s a very nice bow to put on this journey that we’ve had. Rob, are you sitting with a little tear over there?

Rob:
I am. A little proud dad tear over here because I feel like they’ve all just had really massive wins. It’s like I’m nostalgic, right? Because it does remind me of when I was getting into real estate and what it was like to have those few big wins at the beginning of your journey that really lit the fire for what would eventually become my real estate portfolio and everything. So it’s cool to see this at the beginning of their journeys and just how much progress you can make in 90 days.

David:
Yes, the wonderful bipolar cocktail that is real estate, equal parts, fascinating wonder and crippling anxiety rolled into one stiff drink. And in today’s show, we have all of that and more. You’re going to hear about deals that were put into contract and what they can do moving forward, backup plans do backup plans, things that started off and did not go well, and how we’re backing up and coming up with the new plan, and ways personal growth happened and market conditions have changed and our mentees have pivoted and adapted to them.
Before we get into the show, today’s quick tip, what is your next 90 days going to look like? Look, if you give yourself an entire year to get something done, it usually doesn’t get done. But if you break your year into 90 days and you set a hard and fast timeline regarding what you are going to do during that time, things can change. We like to use the acronym GPA, goals, planning, and action. Have you set goals? Have you come up with a plan? And have you taken action on that? Don’t waste a year. Ask what your next 90 days are going to look like.
All right, Rob, anything you’d like to get in before we get to our first mentee?

Rob:
Yeah, just stick around into the very end so we can get a nice little sendoff of our little baby birds going off into the world of real estate and so you can find out the perhaps the best domain name I have ever purchased ever. It is such a great domain name and I talk about it at the very end of the episode.

David:
I was going to say the same. That one simple hack can make people billions. All right, let’s get to it.
Philip, last time we talked, you were working on how to negotiate a timeline that works for you when you have a counter offer, as well as getting the details about all the regulations and the code rules where you’re hoping to develop land. So walk us through your update.

Philip:
Yeah. So since we talked, I got a 22 acre property under contract that’s within my zone that will work for the retreat center. We’re really stoked. And just to make it as difficult as possible, there’s all sorts of hair on the deal. There’s a bunch of manufactured homes that are unpermitted, there’s certain access issues. But we’ve spoken with a number of folks that have expertise in zoning and also due diligence. And so far, they all seem like things that we can move through and that there’s a solution for still making this… This property could still be the right one. A huge part has honestly been reaching out to and talking to a bunch of people that are way smarter than me That’s essentially where I’m at.

David:
Can you share some of the deets, as Rob would say?

Philip:
Yeah. So shout out to some of the advice you gave me a while ago. So it was listed for 1.3. And for me, the property was in really poor condition, a ton of junk. We’re budgeting for cleanup and demo potentially of some of the structures on there. And so my initial offer was at 715,000, which in the classic style I was told to take a hike. And then two weeks later I submitted another offer at 775,000 and then they came back 950,000 and we’re under contract right now for 850,000.

Rob:
Whoa.

David:
Wooh.

Rob:
Dude, first of all, congratulations. The way you said that when you were explaining this was very nonchalant. It’s kind of a big deal. You’re under contract on the property. Regardless of some of the hair that that’s in the offer right now and in the deal, I think it’s really cool, man, because I got to imagine you feel pretty good to at least lock something up. Regardless of how it turns out, at least you’re in your first accepted offer and you’re ready to rock.

Philip:
Yeah, no, I’m beyond stoked and a lot of the community that has been really supportive of this process, it’s like I’m the one that’s sort of leading the charge, but I definitely don’t feel like I’m doing it alone, which is really firing me up a lot about this project.

David:
All right. I have some actual practical questions, but before I get to those, I want to ask you a riddle. Are you ready?

Philip:
Yeah.

David:
What do you call an offer on a deal that has a lot of hair in it?

Philip:
What do you call an offer on a deal that… A hairy deal?

David:
That’s not bad. Actually, that’s a good guess. Anyone else want to guess?

Rob:
An escrow? You’re in escrow?

David:
Actually, this came from our producer Eric.

Rob:
Oh, I got it. Okay. An offur, but F-U-R.

David:
That would be good too. We were actually going with something more specific to you, Rob. It’s a coiffeur.

Rob:
A coiffeur. Also very good. I’ll take that.

David:
So this coiffeur was accepted. Congratulations on that, Philip.

Philip:
Yeah.

David:
Now, I do want to ask you, when you say hair, can you give me a couple of what it is that concerns you about this deal so maybe we can give you some advice going forward?

Philip:
Yeah, so the one that’s the most present with me right now is that I was on my phone with my agent this morning and it turns out that the tenants that are on the property, the seller has not told them that he is under contract and he’s not told them that they’re selling. So we’ve been assured that he’s going to be having that conversation in the next couple days or at the latest by March 1st. But I’m extending my timeline because now I don’t really know what the deal is going to be with the tenants moving out. And then also, there’s three manufactured homes on the property, I haven’t seen the inside of them. Our business plan works with even just demoing them out and putting completely new stuff in there. But it’s definitely of concern to me like, what’s the status of these and are they usable?

David:
All right, here’s the advice I’m going to give you moving forward. This is good for everyone to hear. Buyers make decisions on a certain path that we walk, okay? So we tend to go through a deal making a step and then evaluate a step and then evaluate. It’s kind of walking a path up a hill, right? You see something you don’t like, you either stop walking or you go back and say, “I don’t want the deal.” It’s not the same process for a seller. And you can easily make the stake when you’re a buyer of trying to look at the deal from the seller’s eyes and projecting your eyes onto theirs. Sellers, it’s more like falling down a cliff in a sense. They have a belay that stops how far the fall could go. Then that becomes a new baseline. They put a new belay in and then they might drop further. So originally they had a purchase price of what was it listed at? 950,000 was it?

Philip:
Well, it was listed at 1.3.

David:
Okay. So they had a ceiling of 1.3. Or maybe I shouldn’t say a ceiling. A floor. This is what I will accept. As time went by and they emotionally were worn down by no one buying the house, they would slowly accept, “Maybe I’ll get 1.2. Maybe I’ll be 1.1. Maybe it’ll be a million.” If you had written the offer at a million when they first put it on at 1.3, it would’ve been a hard no because their ceiling hadn’t dropped that far. But emotionally, that starts to change as time passes and it’s a terrible experience as a seller because you’re marinating in your own anxiety. It’s horrible. That’s what gets sellers to drop the price. So it got all the way down to where their ceiling hit 850,000, which they never thought they would do, but they got to a point of pain, okay? That is now the new floor. And it could go further down. I don’t want you to think that it can’t go further.
As new information is introduced, that comes with fear. So if you go to inspection reports and it’s like, “Oh, these three mobile homes are terrible. We need to do all this work to fix them up,” or I’m trying to remember what the other thing you said that concerned you. You remember what it was? The tenant’s not leaving, right?

Philip:
Yeah. Yeah.

David:
“Oh man, we might have to pay for an eviction. That’s going to cost 100 grand,” right? Whatever it is that you can give them information and say, “Well, we’re at 850,000, but it’s going to cost me 100 grand to fix this, I need a price reduction of 50 grand and another 25 grand off of closing costs or something to make up for this,” they’re now seeing that like that’s $25,000 more than what would’ve accepted at 750,000. All right? So I just want everybody listening to understand. As you go through the deal, sellers are just having these big drops, okay? It’s not like a buyer that’s sort of taking a bunch of little tiny steps moving forward. And understanding that will give you an advantage when it comes time to renegotiate.

Philip:
Yeah, I got similar advice because I was on the phone with my agent how to approach some of these issues this morning. We had a road guy going to the property that also does demo last week. He’s going to be getting me a bid tomorrow or in the next two days. It’s going to be at least probably 100 grand for the cleanup and the demo. And yeah, I decided I’m not going to say anything to the seller about concessions or anything until I have that bid in hand.

David:
There you go.

Philip:
That’s my next step.

David:
Give that first, create the fear. Now that there’s fear, maybe you take some time, make them wonder are you going to back out or are you going to stick with it? Let that anxiety do its thing, then come with your approach.

Rob:
Yeah. Yeah, and I think for everyone listening at home, this is a really good example of remembering that there are multiple finish lines to get to the end of a deal. You get your offer accepted and it sounds like you’re in a really great position here, Philip, but that’s just the first finish line. The negotiation isn’t over. The negotiation happens throughout the entire deal until you’re literally at the closing table signing. So with all that said, it sounds like you got really good advice from David here. But Philip, I’m curious for you, what homework or next steps would you assign yourself moving forward on this particular deal?

Philip:
Yeah, I think one of the things that’s made me feel so confident in how I’m moving forward honestly has been networking with other professionals. A huge benefit of being on the podcast, I’ve talked to so many incredible people. I actually have a meeting scheduled with somebody that their entire business model is that they help people with due diligence on land. We’re meeting on Monday. I have a foundation guide that’s going to see the property in the next couple days. All of these people have so much more knowledge in their area than I do. And really, I only feel confident moving forward as much as I do because they’re on my team. So yeah, just keep networking and keep getting advice from people that are smarter than me.

Rob:
Great. That’s great. And I also will say that the due diligence people that you talked about, it might be expensive, but I promise the cost of that is worth. Its weight in gold because they will help you so much. They’ll help you get through the process a lot faster than you could yourself.

Philip:
Awesome.

David:
All right. Thank you for that, Philip. Appreciate your update.
Wendy, last time we talked you had decided to house hack your Vegas property. Walk us through where we are with that.

Wendy:
Great. So I feel like I’ve gone two steps forward, one step back sometimes. And perhaps I’m not the only one that this happens to in real estate. I’m actually headed to Vegas tomorrow and I’m meeting with my realtor and I’m going to drive around town and we’re going to see a bunch of properties and we’re going to put the nail on the head as to what exactly is the criteria that we’re looking for. But what I started to realize was there’s a lot of beautiful houses in Vegas that are available for $500,000, even $450,000. But as I crunched the numbers and crunched the numbers, I really couldn’t make it work as a long-term rental, which is my backup plan. And then I saw this thing where it said, “This house is going to rent for $2,300.” Well, it was for sale for 500,000 and I thought, “Wait a minute, I’m doing this all wrong. Why would I even buy a house to begin with? Maybe I should just rent a house and then re-rent it out if I want to do it that way.”
So I’ve had to kind of pivot, if you will, a little bit to just figure out what’s really the criteria that makes a good investment for me. Living in the property, I could maybe break even, maybe make $400 or $500 a month extra, but I’m like, how much more time and effort am I spending to make that happen? And so I really just had to sit back and say, “What do I really want to do here and what’s my time worth?” And kind of figure out that model. So I’ve kind of scaled down the size of properties I’m looking for to maybe just buy an investment property there and put somebody in it and not house hack it. So I’m a little bit in a spin right now to be perfectly honest. I thought I was going down one path and I’m just midspin, unfortunately.

Rob:
Well, you may not be making the progress that you want to, but I do believe that you’re working through this the right way. You’re asking important questions. Because a lot of the times, people in your position, they’re so desperate to get in the deal that they’ll buy a bad deal. They won’t get in a good deal. And in some capacities, I think people will always figure out how to make it work. But I do think it’s a very smart thing to be cautious, right? If the numbers haven’t worked in any of the simulations or any of the modeling that you’ve put out there, then it’s probably a wise idea to reconsider it.
And then also evaluating your time and assigning a worth to that, I think that’s perfectly viable too. I still think you probably have other options. I mean, I know renting a home probably wasn’t super ideal, but that is a form of house hacking. I’ve known plenty of people that have rented a space and then they rented the other two rooms to completely subsidize their rent and then they didn’t pay rent anymore, right? Or they paid a very small amount. But at the end of the day, I think the faster you get out of renting or paying a mortgage, the more money you can save up to actually get into a property that you can probably make the numbers work on.

Wendy:
Yeah. So I think going forward, what I’m definitely looking at is still I want to use my money that I have and my W2 that I have to buy a primary residence that maybe has an ADU or something else I can Airbnb on the backside. And the question then becomes, where can I do this and have it be a good scenario? Southern California is a challenge. We all know that living here. But I did finally just reach out to somebody here to just say, “Help me gut check this. Is there any way I could buy something in Long Beach or San Pedro and Airbnb a back unit?” And we’ll see what the numbers come back on that for. But I would do that in Vegas in a heartbeat if I could find that kind of a property there, but it just doesn’t seem to exist.
On the house hacking in one house, I know people do it. I know people share houses, but it just seems even with the midterm rental folks that I talked to with Jesse Vasquez and all of them, their model really works great around a one bedroom condo or a studio apartment or a casita in the back. So if I don’t have that model, I’m just not as confident about going in gangbusters and spending a bunch of money doing it. And I feel frustrated because here we’re leading up to this podcast and everything is going so great and now as we’re like down the road, I’m like, “Wait a minute, wait a minute. Am I getting over my skis a little bit?” But I don’t know yet is the answer.

Rob:
David, you deal with this a lot, right? Because you are in the Bay Area, and so you’re always trying to help clients that are specifically looking for a property with some kind of rentable or house hackable aspect, right? How often are you finding success on the first, second or third try? Is it pretty common out there? What kind of advice do you think you could give to Wendy here? Because I know you’re sort of the pro at this.

David:
I think for Wendy, it wasn’t so much that she wasn’t going to find success on the first try. I think either your criteria changed a little bit, Wendy, or you just didn’t factor in some of the criteria in your search. So when you said I wanted as a backup plan to work up as a long-term rental, immediately almost all track housing is going to be out the window if it’s in a growing market. So you’re not going to find 1% rural stuff or something close to that in the single family residential space with one unit to rent track houses that can’t be modified in a hot market. When I say hot market, I just mean a more expensive than average market. Not the Midwest, right? You might be able to find something like that in a market that isn’t experiencing as much growth, where you could buy a property for 210,000, maybe it rents for 1,700 a month. So it could work as a long-term rental, but then you have the option to go short-term rental and actually get more profit.
Most markets where we’re seeing a lot of growth, you can’t just use that traditional long-term rental model almost at all. If you had just said, “I want to buy a long-term rental in Vegas,” I would’ve said don’t. You can only do that with small multi-family. You’re not going to be able to do it with a residential house. So I don’t know that you did something wrong other than we just probably didn’t measure this up well enough before you went into the market that you wanted it to work as a backup also. So I think for you, it’s going to be some clarity, like do I want a short-term rental? Do I want a house act? And then does it also have to be something that as a backup plan would work as a traditional rental? If so, you got to pick a different market. You’re just going to have to go to a lower price point where the price rent ratios are going to work out.
That doesn’t happen as often in our market because people don’t have that backup plan. It needs to be a long-term rental. They’re just going to live in it, right? Like backup plan is, it will be cheaper than if I had to pay rent living somewhere else. And then they sort of put the odds in their favor where they wait until they live in the house for a couple years and then as rent increases, eventually it is something that they can use a long-term rental if that’s what they want to do. Or they buy a house that has more than one unit. That’s the other shortcut, is if you can get a property with two ADUs or a property where you convert the garage and then also have an ADU now, it does work as a long-term rental because you got income coming from more than just the one space. Does that make sense?

Wendy:
Yeah. You said something really important there. Maybe it’s I’m taking insights from this realtor that I’ve chosen in Vegas and they have a very specific criteria that they will only recommend to their clients, which are in certain areas that are primarily these track homes. Maybe I should not necessarily take their advice and I should go into some of those areas where there are beautiful places that I could do so much more with than these track homes. And so maybe that’s something for me to look at while I’m out there.

David:
Track homes really do limit your creativity with real estate. And I probably should explain why. When a new home is built within a subdivision and all the neighbors are really close to each other, first off, neighbors don’t love investors. So when you got houses smashed up against each other like most track houses are you’re begging for complaints. There’s also going to be parking issues because everyone’s trying to share the same parking spaces. But more than that, they’re built with a really cool flowing floor plan that works for a family. It is very difficult to create separate units out of that one big structure. It’s what I found. It’s almost impossible because most of them are two-story houses that have a separate entrance into the second story.
Now, when you buy houses that are older, they’re on a hill, maybe they’re 1,100 square feet when they were built in the ’40s and then in the last 70, 80 years, they’ve added on several times to the house, the way they added on make it very easy to create separate units out of those homes. Track homes tend to be newer because it’s like a new way of building houses. So that’s why we’re saying you’re limited when you’re looking for that. But that is what most agents are going to be used to selling because that’s what most home buyers are wanting. So I don’t know that you made a mistake here. I think you learned something because you took action.

Wendy:
Understood.

David:
You probably wouldn’t have got to the point that you would’ve realized, “Vegas won’t work if I want to cover my bases with this backup plan” if you hadn’t have taken some steps moving forward. So you walk down the path, you hit the dead end, you’re going to go back, you’re going to find another path arm with the new knowledge. Rob, what say you?

Rob:
Yeah, I would say looking back at your 90-day journey, you’ve made a lot of progress. Just because you’re not in a deal does not mean you haven’t progressed, right? We’ve figured out what you don’t want. We’ve figured out what won’t work. We’ve examined your professional path and what you want out of that. And even though you’re not in a deal now, I just feel like you at least have the clarity on, “Okay, this stuff’s not going to work.” Now move that over to the side and continue down a path of figuring out what other markets can work for you. So I don’t want you to feel bad that you’re not in a deal, because I think you’ve gotten a lot more out of this than you probably realize.

Wendy:
I’m sure. I have gotten a lot out of it. I’ve lost a lot of sleep, but I’ve gotten a lot out of it.

Rob:
And that’s how it should be. So with all of that said, Wendy, as you sort of examine where you’re at and you’re moving forward down your path, what next steps or homework would you assign yourself to get you a little bit closer to that full clarity that you’re looking for?

Wendy:
Yeah. I really think I probably need to do a little bit more networking than I’ve been doing, which of course takes time, but I need to step outside of my Zoom zones and really just go to some more meetups and meet some people and see where people are investing and what’s moving the needle for them today. I feel like I need to increase my access to people like that.

Rob:
Yeah Yeah.

Wendy:
So that’s one thing I definitely want to do.

Rob:
I think it’s great. And that’s even something that Philip talked about too, right? He’s like, “I just need to talk to more people that are kind of higher level, a little bit more advanced.” And that has opened up some doors for him too. So I think that’s going to work great for you.

Wendy:
And I’m going to continue down the mid rental or midterm rental path. I’m going to go to that conference they have in a couple of months. I’m not throwing that baby out with the bathwater. I just got to keep crunching some numbers. I am going to be in Vegas for the next several days and I’m going to look there while I’m there and just see if there’s something I can find or an angle that works. Maybe not necessarily a property, but narrow down my criteria so I’m not just crunching numbers for four hours every night and saying no to every deal that comes past.

Rob:
Awesome. Well, I think you’re taking action. You’re going down to the Mid-Term Rental conference. You’re in Vegas right now looking at properties. You’re talking to people that can help you on this journey. So I think you’re going to get a lot of that out of that too. We’re going to be following along, and I just wanted to thank you for your time and for taking this journey with us as well.

Wendy:
Absolutely. It’s been awesome.

David:
Last piece of advice for you, Wendy, before we go on to Danny. Never be discouraged by a lack of results. Only get discouraged when there is a lack of progress or pattern recognition, okay? You never know when you’re going to hit that finish line that Rob talked about. You may take the wrong path nine times, hit a dead end, come back, but now you know the wrong nine paths, and then the next path you take will be the right one, and you’ll have an advantage over everybody else.
Some people get lucky and they hit the right path on the first try, and then they assume this is how real estate investing works. And then they take the next nine paths for all the wrong ones, and they lose a lot of money because they made those mistakes. So as long as you are recognizing patterns in what you did, like you said, “This is not the right realtor, this is not the right type of property, this might not be the right market,” you are making progress, okay?

Wendy:
Mm-hmm.

David:
Don’t just measure how many deals you close as the only result that you’re measuring.

Wendy:
All right. Good advice.

Rob:
Awesome. Okay, Danny Zabata. Zapata.

Danny:
Zapata.

Rob:
Last time we talked, you were about to make some aggressive offers on some multi-family buildings and maybe even following my strategy of making some offensive offers that might just get you a no right out the gate. Walk us through some of the updates on your end.

Danny:
Yeah. So I did wind up making some offensive offers because honestly what I’m looking out there, that’s what works for me. So I kind of approached this from what’s the price that I needed to be at in order to do this deal versus how do I get to the seller’s asking price, because I think that’s kind of a mindset that I’ve had early on. So I made two offers. One’s an eight-plex in North Oak Park. It’s been sitting for several months. It was listed for 1.9 million. I offered 1.05 million, which is a very aggressive offer. But they did respond it. It wasn’t an outre known necessarily, but they did kind of come back with their limits. So they said, “We can’t take anything under 1.7 million. The sellers looking to get into the next property, and that’s what they need. So that’s kind of where we’re at there. We’ll let it sit for a little bit longer.” It has been sitting for a while and continue that conversation.
Another property that I put an offer in was a 12-plex in Southland Park area of Sacramento. That one’s a little newer listing. Started listing in the beginning in January for 2.9 million. Offered a less offensive offer of 2.25 million, but they seem to be more offended than the previous offer. So they were just like, “Hey, we’re not even going to look at your offer. We haven’t been responding to anything under list. Basically, go away.” But I still plan to follow up on there and kind of follow the progress because that one in particular, I like the area the most out of the two. I feel like it has the most long-term potential and just have a nice stable asset. So yeah, that’s kind of where I’m at, and just continuing to follow up every couple weeks and looking for more opportunities to make offers.

David:
All right. So a couple things to highlight here. I have this analogy that I call the pickle jar that I tell a lot of our clients. You know how sometimes you’ll be trying really hard to open a pickle jar and you can’t get it, and then the next person tries, it pops right off? What do we always say when that happens?

Rob:
“Oh, I loosened it for you.”

David:
I loosened it for you. Exactly. “You’re not stronger than me.” A lot of the times I will step in and I’ll get a deal at a really good price, but I don’t know how many Danny Zapatas came before me and loosened that pickle jar. So they wanted 2 million, you wrote it at a million. They start thinking in their head, “Maybe it’s not worth 2 million. I’d be lucky if I could get 1.3.” And then I come in with 1.32 and they’re like, “Yeah, I’ll take it.” And I’m like, “Well, I’m such a great investor, I got a great deal.” But I don’t know everything that happened before I walked into that scenario, right? So the moral of the story here is you want to get the pickle from your own labors. You want to follow up with these people every so often so someone else doesn’t step in and steal your pickle, right? You’re grabbing the marks on your hand and your forearms are all swollen even wrestling with this pickle jar. You don’t want someone to come in and take it. So don’t forget to keep following up.
As the sellers are wrestling with their anxiety as rates are going up and their property isn’t selling, and doom and gloom is starting to happen more and more on the news, you never know when they’re going to hit that point where they might say, “Hey, you know what? This other opportunity passed us up. We’re going to make so much money on it. If we lose money on this one, that’s okay because I need to move the equity from this one to this one.”

Rob:
That’s going to be a good Instagram reel right there. I already know it.

David:
Protect your pickle.

Rob:
Protect your pickle. But it’s very true. I mean, I think in real estate it is all timing, right? And so you could be the one that capitalizes on the timing if you keep following up. But David’s totally right, man. You could have offended them. They’re going to get offended five more times. And if you’re not following up consistently, someone else is going to come and offend them less and that’s the offer that’s going to get accepted. So you definitely want to make sure that you’re checking in and saying like, “Hey, I know this deal didn’t work before. I know this offer didn’t work before. I’m curious, what have you been hearing? Is there a way to make this deal work? I’d love this property still and I’d love to talk about this a little bit more with you.” So I think getting in there, talking to them.
But Danny, I got to say, man, I think it feels from just the first episode, it feels like you hit your groove, man. You found it. You just seem a lot more confident kind of talking through this. So I am wanting to know when you put these offer in, what did it feel like? Was it scary? Was it a relief? Was it a relief to hear a no? How was that all for you during that process?

Danny:
Yeah, I think you called me out correctly in the last episode about having to make that first offer and kind of rip that bandaid off. It still felt really challenging to go and do it. I did hesitate a little bit, but I kind of had you sitting on my shoulder, talking in my ear, “You got to make that first offer.” So it felt liberating and just kind of really good to get that out there. I think along with utilizing David’s advice around just generally talking to more people and being more comfortable, I think putting those two things together have kind of resulted in what you see today. So yeah, I do like it. Once you make those first offer or second offer, it does feel like it’s starting to snowball and just getting more comfortable doing that.

Rob:
Yeah. So looking ahead, as you kind of walk down your path here, I know we’re at the 90 days, but what homework and what next steps would you assign yourself as you kind of go on to your next 90 days?

Danny:
Yeah. So go… 90 days flies really fast, by the way. But the homework, key is to keep making those offers and keep the momentum going. Additionally, I’m finding as I’m collecting more data over the months, there isn’t a lot ton of properties that fit this buy box, this 10 to 20 multi-family buy box. So now I’m thinking as I’m kind of churning through the existing inventory, what else do I need to do next? So I think about two things. I think are there ways to create more opportunities, things that are not necessarily listed, things that I learned from the single family and the small multifamily world where you couldn’t go bird dogging or talking to people that have properties that may not be up for sale now and just continuing having conversations with them and seeing where there’s opportunities to go and put offers in or say, “Hey, are you looking to sell? If you’re ever looking to sell, give me a call”?
And then the other part of it is being realistic and reevaluating that buy box every once in a while. So as I mentioned, there’s a limited set of properties out there today. So is that pool big enough to continue down this path or should I extend that box a little bit? In the beginning, I think the first episode, Rob, you had talked about you kind of pushed on me, “Is this really where you want to be? Have you thought about other things?” So I am not necessarily changing my buy box, but I feel like I’m open to expanding a little bit more. So instead of that one 10 to 20 unit, are there opportunities for a couple of eight-plexes? Are there different ways that I can look at it and make that similar numbers or similar goals work, just kind of approaching it from a different way.

Rob:
That’s good, man. The more you open that buy box, the more of those opportunities will start falling in you up. Things that you probably had in front of you the whole time that now you’re just like, “Ooh, that actually seems like a cooler deal than I remember.” I think that kind of stuff will start coming across your desk more. David, what about you? You got any final words here to send Danny off on his next 90 days, if you will?

David:
You know, as I’m listening to you talk about your struggle, it’s a very common one where you have set personal goals, okay? “I want this many properties by this much time with this much cash flow and I’m willing to do the work to get there.” What I realized as you were talking is oftentimes real estate does not line up with our personal goals. What the market’s doing can sometimes be working against you. So imagine that you’re in a river and there’s no current at all. You got to swim really hard to get where you want to go. Well, sometimes the current goes with you and it makes it much easier. This current of real estate flows with you. It flows fast, it flows slow. And sometimes it flows against you and you’re swimming against the current, which is kind of the case of where we are right now.
You can’t get discouraged when real estate doesn’t line up with all our personal goals. It’s not completely independent like other things would be that we have complete control over maybe our fitness. We control what we put in our mouth, we control how often we work out. You’ve got a situation with real estate where the market’s tough, not a lot of deals are working out, but there’s not much inventory either. So we’re in this stalemate where deals don’t work, but there’s not so much inventory out there the sellers have to drop their price. The current is flowing in your face and you’re having to swim against it. It is not uncommon to bust your butt swimming and become a really good swimmer and think you’re getting nowhere. And then the minute the market shifts and the currents behind you, you’re flying past everyone else, okay? So it is not a linear progression. It comes in these short spurts where you can get a ton of good deals and make a lot of money, and then sometimes longer marathons where you’re not really making as much progress and it can be discouraging.
So don’t get caught up by the people that bought a bunch of houses between 2010 and 2013 and they crushed it and you’re like, “Well, how come I can’t go do that?” It was a different market. And don’t be discouraged when you’re out there networking and analyzing deals and riding low offers and learning about real estate, but you’re not getting anything under contract. You are still getting stronger. You’re improving your ability to swim and it will turn around, but you’re not in control of when that happens. All you’re in control of is the action you take, the attitude that we bring, and the level of commitment that we have. So you kind of have to trust the process over the long term and fight those feelings of like, “Why am I even trying?” Because Rob can attest, when it turns around, it can turn around so fast.

Danny:
Absolutely. You don’t want to be in that zone where you give up too easily. And that’s kind of where I’ve also been thinking about like, “Hey, I’ve tried a couple things, should I go shift to something else?” I think there’s a balance there of trying enough or putting in your best effort and making sure that you’re staying consistent and not just giving up and jumping to the next shiny object. And I’m very aware of that.

David:
Yeah, 100%. Great attitude. All right. Well thank you for that, Danny. Let’s bring the rest of the group back in. If you guys could come back and I’m going to hand it over to Rob.

Rob:
All right. So looking back on where you were 90 days ago, would you say that your goals have changed since then? Wendy, I’d like to start with you because I know that you’ve shifted a few times on some of the strategies, but how have your goals changed since the beginning of this journey?

Wendy:
Right. So one of the goals that I’d outlined initially was around my career and moving more into something real estate oriented. I think I was able to get some clarity through guidance by you guys and just really starting to put to think through it that I’m going to stay in my career doing what I’m doing as a marketing professional because I know it, I’m good at it, people pay me well to do it. And until I’m at the point where I’m doing something in real estate that a job kind of comes to me, I’m not going to go try to be a loan processor or go try to be a syndicator. If something works in what I’m doing, whether I’m doing short-term rentals for myself and then I decide to take that on, that would be the better career path for me that I could get into it that way. But in the meantime, kind of stay on the sidelines.
But all that being said, as David said I think in week two, it’s like it’s really tough out there to just be a real estate investor. You’re going to run out of money at some point. So what’s my next move there? Considering I’ve got nine houses that are turnkey now, and those bring in some income to me, the next step was to invest some more of my own money or find partners to do something else. And so the goal that I had there was to find a house that I could live in, maybe have an ADU, maybe house hack it. I’ve honed what I want a little bit on that. This is a good time for me in my career and the timing in my life for me to buy something that allows me to do that.
And so my goals haven’t changed, but I think I’ve done a lot of work to hone what that should look like. First, I think we talked about me moving into my Colorado property next year. I could still do that, but I think now’s the time for me to buy something else and turn that into it. So those goals haven’t really changed, but I’ve honed them a lot more just through your tutelage.

Rob:
Yeah. Yeah, totally.

David:
Well, thank you for that, Wendy. Philip, how about you?

Philip:
Yeah, I think some of the feedback that you were giving Danny about just following up and not being afraid to submitting an offer that the you’re told is ridiculous or offensive, I think those were things that I had a certain self consciousness about and I just kind of was like, “All right, I’m going to trust these guys. They have more experience than me.” And it definitely worked in my favor to just put the number that works for me. And if they tell me to go away, fine, but I’m going to come back in a week.
And so yeah, my original goal was to get the retreat center under contract. That’s something that we have right now. And sort of a little different from Wendy, I’m finding so many people that want to help with the vision that I have. And honestly, I’m running out of bandwidth with the number of things that I’m doing with my career and with responsibilities that I have with my family. When this comes out, I’m getting married two weeks after this episode releases. So my bandwidth is super thin and really the most important thing is the retreat center and locking that up in a good way. And yeah, I think just focusing on that is going to really pay dividends.

David:
What would you say would be your biggest win that you’ve experienced throughout this process?

Philip:
Yeah, I mean, the way that my network has been growing has been so cool. I have talked to so many people that have a lot more experience in me, certain people that have capital and they’re interested in investing. But really just feeling confident moving forward with the land and the retreat center that is still… We haven’t closed yet, so I’m not going to check that off, I’ve completed it or something like that. But it’s going to get done. So I’m really excited about that. I feel great about it.

Rob:
Well, it gives you hope, right? I know you said that you’re not through the deal yet, but sometimes hope is a win because at the beginning of all of this, you’re going roadblock against roadblock. You don’t know things, you don’t know how to maneuver it, and it can be very discouraging. But getting something in contract is like, “Wow, things are shaping up for me. And even if it doesn’t work this time, at least I have this one win to give me hope for the next time that I go under contract.” So that’s huge, man. Thanks for sharing.

Philip:
Thank you.

Rob:
Danny, what about you? How has your thinking changed over the last 90 days and what about your actions?

Danny:
Yeah, so my thinking has changed. I think I can categorize it as moving from more of a bookworm mindset to more of a networking mindset where I’ve always been somebody to really necessarily analysis-paralysis, but dig deep and learn a as much as I could about things. I felt like in the beginning that kind of limited me to taking action. So just being able to shift from that, constantly sharpen your ax and taking that big swing to finding a balance where, “Okay, I think the ax is sharp enough. Now I need to move on to the next thing. I need to build up this network. I need to talk to more people. I need to go take some action and put those offers in.” I think that mindset is the biggest shift for me.
I guess for my actions, similar to Phillip, these 90 days when you’re adding these kind of goals on top of your daily life and all the things that you have going on, it’s really forced me to prioritize what’s important and figure out ways instead of being crushed under the pressure, figure out ways to make sure I can get these done. How do I get these things done? From our last podcast, making the most of my in-between time, figuring out what are the highest and best value things I can do with my time and what needs to get done, but I don’t necessarily have to do them. So I’ve engaged virtual assistant and leveraging my partners more have really given me the opportunity to open up and spend more time on what I think is the most important things.

David:
Success is a function of who we become, not just what we do, right? Now, we often say taking action is required to have success, but that’s because taking action improves who you are. And then as who you are improves, success finds you. That’s one of my favorite things I’ve found about your journey here, Danny, is you’ve embraced the fact that parts of you need to improve or parts of you need to change and become more flexible. You have embraced networking. You’re writing offensive offers that you never would’ve wanted to do. You’re putting yourself in these uncomfortable situations knowing that that’s going to help. And it’s not only going to help you with real estate investing, it’s not only going to help you with growing your wealth. Your overall life, your relationships, your friendships, lots of other things benefit when we do step out of that comfort zone and find improvement. So I just want to commend you on taking that step.
Really you, Philip and Wendy, all of you who have come on here and admitted, “I made mistakes, I did things wrong. I looked into something I never thought I would do. I took this action and I didn’t get the result that I was wanting,” but you are closer to becoming the person that as is going to get it. I know for you, Philip, congratulations on your upcoming wedding. This is going to make you a better husband. It’s going to make you a better partner. Hopefully, that’s going to rub off on your partner and they’re going to want to sort of jump in line with it and do things that are outside of their comfort zone, get more focused. Like Danny was just saying, focus on where time can be better spent. All of us become better versions of ourselves when we commit to this process. So I’m proud of all you guys.

Danny:
Thank you very much. This has been a lifelong dream mark. I can’t say a lifelong. I can’t literally say lifelong, but kind of when I started this journey, being on BiggerPockets was one of those goals that I thought was several years away. So thank you very much.

Rob:
Awesome, man. Well, thank you guys. We really do appreciate all the vulnerability and just checking in with us and staying to it and actually coming back with homework and the assignments that you completed. You get out what you put into this kind of thing, right? I’ve seen so much of what y’all have put into this, so I’m excited to see and keep up with y’all over the next 90 days and see how things change. If people want to learn more about you, if they want to get in touch, if they want to find you online, where can people get in touch and follow along with your journey? Danny, I’ll start with you.

Danny:
So Instagram, I just started Investor on Fire Instagram account and posting a few things there. I’m learning. As I’m going through this process, I want to start uploading more reels and kind of putting more of that out there.

Rob:
Awesome, man. Investor on Fire on Instagram. Wendy, what about you?

Wendy:
I’m wendysc_invests on Instagram. You can also find me on LinkedIn at Wendy St. Clair. A lot of people have found me there. I’m not as active on Instagram as so many other people are in the world of real estate, but I’m going to try to get a little bit better at it. wendysc_invests.

Rob:
Okay, awesome. And Philip, what about you, man?

Philip:
Yeah. So on Instagram and LinkedIn, I’m the_educated_investor. I have a podcast called The Educated Investor where I interview incredible people in the real estate and entrepreneurs and find out how they did it. And I have a website, educatedinvest.com where I have all my podcasts and all the good stuff.

Rob:
Okay, awesome man. Educated_. Give us the Instagram handle one more time.

Philip:
[inaudible 00:44:57] too complicated. The_Educated_investor with underscores in between them.

Rob:
Okay, cool.

Philip:
You can see a picture of my shining face.

Rob:
Great. And then David, what about you man? Where can people learn more about you?

David:
You can go to the_agent_BiggerPockets_flipper_buyandhold_mediumtermrental_bald_wealth builder. Just kidding. No, you can just go to my website. It’s just been remade, davidgreene24.com. You can see all the stuff I got going on. And then if you want to follow me on YouTube or any of the social media stuff, I’m @davidgreene24. It’s kind of the opposite of Philip. At least his handle makes sense, you know what it is. You see mine, you’re like, “What is DavidGreene24? Is this a diner that he owns? Does he think he’s Kobe Bryant? Is he saying that he works 24 hours a day?” It’s very confusing and frankly, I don’t blame people for being confused. Rob, how about you?

Rob:
You can find me over at www.If this was a good episode and it inspired you to take action, please consider leaving us a five star review on the Apple Podcasts platform or wherever else you download your podcasts.com. I know it’s really long, but everything else was taken. So yeah, if this inspired you to take action and get started or optimize or scale your real estate journey, leave us a five star review and thank our awesome guest mentees here in the review.

David:
Absolutely. Thanks again to all of you for doing this. And thank you listeners for following along on the journey. We hope you’ve been inspired, that you’ve learned something. And please reach out to all of our guests and just tell them thank you for being transparent and vulnerable and signing up for this. It’s not always easy or fun to be in the spotlight, but they are willing to do it because we care about all of you and trying to give you best experience and the best show possible that we can. This is David Greene for Rob www.abasolo signing off.

CNBC’s Diana Olick on why the housing market is in deep trouble. With CNBC’s Sara Eisen and the Fast Money traders, Tim Seymour, Courtney Garcia, Jeff Mills and Steve Grasso

Ashley:
This is Real Estate Rookie episode 268.

Tony:
I think a lot of rookies maybe make the wrong assumption that they need a license to be real estate investors, when the majority of real estate investors that I know don’t have their license, and instead, we hire someone who is an expert in that specific thing and we leverage their expertise, because my agent in Joshua Tree, him and his team, I absolutely love them because they have the process of buying and selling real estate down to a science. Like, if I forget to schedule my inspection, his transaction coordinator is saying, “Hey, I’m going to schedule your inspection for you.”

Ashley:
My name is Ashley Kehr and I’m here with my co-host Tony Robinson.

Tony:
And welcome to the Real Estate Rookie Podcast where every week, twice a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. As always, I want to start today’s episode by shouting out someone by the username of KSP75. KSP left us a five star review on Apple Podcast. It says, “I own a multifamily home and my family lives in part of the house, so I have some exposure to tenants, leases, et cetera. Real Estate Rookie is fantastic to listen to as it gives information, guidance, and confidence to move to the next level of real estate investing. I plan to devour every episode, take notes, read, research, and be 100% ready with absolute certainty to pounce on my next deal when the conditions are right.” So KSP, we appreciate, you and I love that you’re going to have the information, guidance, and confidence soon to take that next deal down.

Ashley:
So Tony, what is new with you?

Tony:
I got a different color shirt on today, so I’m rocking the maroon. I guess. It’s almost black, but not quite.

Ashley:
I had to turn up the brightness of my phone because I still thought it was black until the producer said something and I turned the brightness, I’m like, “Oh yeah, it is a different shade.”

Tony:
I think I might try a different color for 2023, so we’ll see. But no, on a serious note, we’re actually, I think I’m going to be flying out to West Virginia this weekend. We just got an LOI signed on a deal we’ve been looking at out there. It’s really cool piece of land that we’re looking at. It’s about six acres, and it’s near a new national park out in West Virginia, and the property itself has a main house, a guest house, five RV pads, and then it also has the permitting to add a bunch of glamping sites as well. So the idea is that we’re going to buy that property, add the glamp sites, renovate the primary house, and then probably buy a few Airstream campers as well to kind of make it a little destination out there. So we’re excited for it.

Ashley:
That’s awesome. That’s really exciting.

Tony:
Yeah.

Ashley:
Have you been to West Virginia before?

Tony:
Never in my life. This will be the first time.

Ashley:
When I was younger, I used to go to the IBO World Championships for archery there. Me and my dad and my brother would call [inaudible 00:02:51].

Tony:
You were in the world championships for archery?

Ashley:
For like one league, the IBO League, but yeah.

Tony:
Why am I just now hearing about this? Have you ever told me that you were in the world championships for archery?

Ashley:
I don’t know. I mean, I feel like it’s not that big of a deal. I don’t know. But yeah, I used to do 3D target archery shooting when I was younger.

Tony:
I mean, how many people can say that they’ve been in the world championships for anything?

Ashley:
But anyways, it was at Snowshoe Mountain each year in West Virginia and I just loved going there. It’s like a little ski village on top of the mountain, and it was super cool. The whole archery tournament would be walking up and down the hills to do the 3D shoot and stuff, so it was really cool.

Tony:
Yeah, I’ve never been, so I think we’re going to take off this weekend and it’ll be kind of a quick turnaround trip, but we’re super excited. This will be our first time doing anything with glamping. Wasn’t even really in the game plan, but the property kind of presented itself. Actually, this person reached out to me on Instagram, and I’m not the best at checking my DMs, but every once in a while I’ll go through and kind of try and clear them out, and someone had sent me a deal, was like, “Hey, yeah, I’m looking to offer at this.” So if you guys have some other good deals that kind of fit that criteria, please continue to send them to me because this wouldn’t have happened without that guy.

Ashley:
I’m also going away this weekend, but unfortunately it’s not for a deal. It is for a real estate girls weekend in Las Vegas. So some women real estate investors have become my closest friends. So we are having a girls weekend in Las Vegas. We do a lot of trips together, but it’s usually our whole group of friends, but this time it’s just going to be a couple of the girls, and yeah, we’re about to take down the Las Vegas strip.

Tony:
As long as you don’t have more fun with them than you had with me and Sarah last summer, I think it’s totally fine.

Ashley:
Well, you know what? I think you’re safe because the pools are closed this time of year, so there’ll be no pool party.

Tony:
No pool parties.

Ashley:
But I’ve also, I’ve been to Las Vegas, I don’t know, probably 12 times, but I’ve never been to a Las Vegas nightclub. That’ll probably be my first time this weekend.

Tony:
Well, as long as it ranks your second most fun Vegas trip, and I think we’re square. We’re good.

Ashley:
So today on the Rookie Reply, we actually have some great questions that our producer pulled from the Real Estate Rookie Facebook group. So we’re going to be talking about cleaning for turnover. So after a tenant moves out, how you should charge for it, what’s common, different ways that you kind of charge for the cleaning. Also, a little bit of seller financing, if the seller does offer that to you, how does that work along with getting bank financing in the same place, and then we talk about getting a survey done on a property. Tony and I have very different experiences with that, so if you guys want to weigh in as to what is common in your area, we’d love for you guys to hop in onto the YouTube comments and comment below as to whether you typically do or don’t get a survey when purchasing a property and why.
Okay, so today’s first question comes from Jason Dorsey. “When purchasing a property, what’s the purpose of getting a survey? The realtor is asking if I’m going to get one.” Okay, so a survey, a survey is of the land. So where the boundary lines are, you’re going to find out where, how large the parcel is, so how many acres and where those lines actually go. So what is your property that you’re actually buying and what is the neighboring property. Tony, is it common for people to get surveys done where you live to purchase the property?

Tony:
At least not the properties that I’m buying. I don’t think a realtor or anyone or even my lenders have ever asked me to get a survey, but also our parcels are pretty small. I think the lot lines are pretty well-defined typically. So maybe that’s why it’s not as much of a concern for the markets that I’m in.

Ashley:
Yeah, I don’t think I’ve ever closed on a property without having a survey which is interesting.

Tony:
Isn’t that so crazy?

Ashley:
Yeah. For here, it’s very common to have the survey done, and usually, typically, the seller pays to have the survey done where a surveyor comes out, marks the property, maybe stakes the corners of the lot for you, and then draws out basically the survey map. They’ll put usually where the house is located on the property, the property lines where a street is. Sometimes though a person maybe already had a survey done maybe previously when they purchased the house, or I bought a little A-frame cabin last year and there was an old survey from like the ’90s, and I accepted that survey and just had the seller sign an affidavit of no change stating that they were saying that there was no changes to the parcel line. Usually it’s only recommended that you go back and accept a survey that’s maybe only a couple years old, just to have that sense of security that there weren’t any changes to the parcel and to your survey lines.
I did have a property that when the survey was done, there was a dispute with the neighbors that it wasn’t actually done correctly, and we didn’t close and our closing was pushed off until that actual dispute was done and the lines were actually defined as to where the parcel actually went. This is where you can also find out if there’s easements on the property too. Around where I live, it’s very common for an easement to the gas company where they have a gas line. Actually, on my primary residence, we have a gas well, and there is a road that goes back to the gas well on the property that the National Fuel is the gas company that they can go and have access to at any time. And then they pay, we get free gas to our house which is great. Yeah, unlimited consumption, which you don’t even hear that these days. So just there’s different things like that you can also find out from having the survey done on the property.
So if it’s recommended from your real estate agent, ask if that’s something the seller is going to provide. If not, you can always pay for the cost of the survey to be done, and depending on the size of the parcel, I mean, typically I see for a couple acres, not a ton of buildings or anything on it, it could range from 400 to maybe $1,000 at the highest.

Tony:
Interesting. Yeah, I’ve literally never heard of that. I’m looking through closing docs as you’re talking for some of our old properties to see if maybe it was in there and I just didn’t even notice it, but I don’t see anything about a survey in any of the documents that I have. The closest thing that I have, it even shows the lot lines, is from the title report and the very last page just has like a bird’s eye view of all the different parcels on that street, and it just kind of outlines which parcel is ours. But no, that’s so interesting. I’ve literally never done that before.

Ashley:
Yeah, I’m actually shocked too about that one. We had the episode where we talked about wells and how you guys don’t typically have wells where you were first purchasing, but yeah, for a survey, to have that done. Yeah, I would recommend getting a survey done or seeing if they have one already done. It just, it makes things a lot easier too if you’re getting bank financing. I’ve recently had banks ask for a copy of the survey too which I previously hadn’t had that done, but I just did a commercial loan where they asked for a copy of the survey.

Tony:
Yeah, and now it makes me wonder if I’m maybe opening myself up to issues down the road by not doing that survey when we are purchasing the property, especially if it’s only a few hundred bucks. It’s just to make sure that there are no issues with the property lines or what if the neighbors fence is like 10 feet further than what it’s supposed to be. You can see some of that stuff, like my realtor, they use LandGlide, the app or something. So if we’re at the property, they’ll like, “Hey, here’s where the line is,” and stuff like that, but it’s probably something we should take a little bit more seriously now that I’m hearing about this.

Ashley:
Yeah, we use LandGlide too and onX Hunt. We did a little experiment actually a couple weeks ago where this 30 acres I had bought, we walked the property line. It was right after hunting season had ended, and it was amazing how close some of the tree stands were that were for the neighbors that were… They were facing towards their property, but there was some instances where it’s like, “Eh, that actually might be on our property,” their tree stand. But the onX Hunt we did notice, and the LandGlide, was a little bit off from where the actual stakes were in the corners of the property too. It wasn’t super accurate.

Tony:
Spot on.

Ashley:
Yeah.

Tony:
Cool. Well, should we should move to question two?

Ashley:
Yeah, let’s go to the next one. “Can you share pros and cons in getting your real estate license just to help yourself in real estate investment deals?” This question comes from Teresa Molter from the Real Estate Rookie Facebook group. If you guys aren’t in the Real Estate Facebook group yet, make sure you are joined. It is worth signing up for Facebook just to get into this group, and you get to connect with a lot of like-minded investors and also ask questions that we may play onto the show. So Tony, neither one of us have our real estate license, but Sara is getting her license, correct?

Tony:
Sara is working on getting hers. Even as she’s gone through this whole process, she’s almost at the finish line now, and we’re still debating does she even need to go through the final step of taking the test. There’s a few things that we’re looking at, right? First is it’s a pretty lengthy process in California to get your license. You have to take three courses, there’s some additional certifications you have to get, and you finally have to take this exam which is a pretty lengthy exam as well, and obviously there’s some costs associated with all of this as well. But it’s not like in 30 to 45 days you can have your license. It’s like a six-month ordeal at minimum, maybe even longer depending on how fast it takes for you to go through all the coursework.
So I think the first question that anyone should ask themselves, but Teresa for you specifically, is how much time and money and energy will it take for you to get your license. And then the second thing is what is your goal in doing this. You said that maybe it’s just to help yourself in your own real estate deals. Are you looking just that you have MLS access? Do you want to maybe save on commissions that you would pay to a buyer’s agent when you’re buying something or a seller’s agent if you’re selling something? What is your motivation for doing that? And then what is the volume that you think that you’ll actually use it? If you’re buying one deal a year, does it really make sense to go through the hoops of obtaining and maintaining that license on an annual basis or however frequently it is in your state?
I think a lot of rookies maybe make the wrong assumption that they need a license to be real estate investors, when the majority of real estate investors that I know don’t have their license, and instead we hire someone who is an expert in that specific thing and we leverage their expertise, because my agent in Joshua Tree, him and his team, I absolutely love them because they have the process of buying and selling real estate down to a science. If I forget to schedule my inspection, his transaction coordinator is saying, “Hey, I’m going to schedule your inspection for you,” or, “Hey Tony, just a reminder, your due diligence period ends in seven days. If you want to get your request out, let’s make sure we do that today.” So I do think, Teresa, that if your goal is just to save money, maybe not do it, but if you really want to be an agent, then I will probably go for it.

Ashley:
I started my real estate license like three times. I think I paid like $99 for the online course. This was, I don’t know, five years ago or whatever. You have to rebuy the course after a year or whatever. But it got to the same point as to why do I need it, and really the only reason I was going to get it was so that I could take myself to showings, so I didn’t have to schedule showings with somebody else, with an agent, and I could just go to the properties. Then I got to the point where most of my properties were off market deals. That was the only benefit really to me. Of course, saving the money on the commission, but I think it is worth paying the money to have somebody else do the paperwork, draw up the contract, talk to the other agent, deal with the things that come up.
Especially, I think it’s a huge advantage having an agent when you have tenants in the property and you’re trying to sell. Scheduling showings with tenants in properties can be a nightmare of just coordinating with them, getting them to grant access. I’ve gone to so many showings of properties where I’m supposed to get in a unit and we get there and it’s like, “Nope, sorry. The tenant said no or they were supposed to be here, they’re not. We don’t have keys,” things like that. I actually sold two properties within the last year that had tenants in place and literally I just, I went with a real estate agent who worked with my property management company, said, “This is what I want to sell it for. Here’s my property,” and he got all the tenant’s information from the property management company, he coordinated every showing with them directly. That right there was worth the commission in itself of having to do that.
I agree with Tony on this. If you want to actually run a business as a real estate agent and buy and sell houses for other people, then yes, it could be worth it because remember, there’s those continuing education costs. To keep your license going, it’s going to cost you money, it’s going to cost you time to take those continuing education classes too.

Tony:
Yeah, I totally agree, Ash. I think it comes down to the ultimate motivation. Just like you said, I would rather pay someone to handle all of the administrative work than me do that myself. But again, I get it. We’re kind of in different spaces in our real estate journey, so maybe it makes more sense for us to do that. But my personal thought, Teresa, is that if you don’t plan to make this an actual income source for you, I might focus more of my time on building my real estate business first and then looking at the agency stuff or the agent work later.

Ashley:
Okay. Onto our next question by Rick Watts. “Has anyone ever purchased a home with occupants in it? Anything I need to consider in trying to get them out? They were there with the permission of the previous owner, but there’s no lease agreement of any sort and they don’t seem willing to leave. I’ll probably talk with an attorney regarding my legal obligations. I’ll soul search a little for the ethical obligations as well. Just didn’t know if anyone has experienced this before.”

Tony:
Ash, can I start with a question to you first, right? I never buy properties with tenants. Even our flips that we purchase, a lot of times they are long-term rentals beforehand, but it’s always a requirement on my end is the buyer to make sure that the tenants have vacated. There’s actually a flip that we’ve had under contract for almost two months now because the seller is working to get those tenants out. So my baseline is just I’m not going to buy it if there’s a tenant in there because I don’t want the headache of having to try and evict. From you, from your perspective, if you have a property that you’re looking at purchasing and you already know that the tenants don’t want to leave, would you still move forward with buying that?

Ashley:
Yeah, and I think something with this question that Rick maybe didn’t know the do enough due diligence I think maybe as this property was under contract, because I think there’s some ways that he could have handled this before getting it under contract. Trust me, there’s so many things I wish I would’ve known on the first couple properties I did too.
I’ve boughten quite a few properties that have tenants in place, but what I do is I do an estoppel agreement where I compare what the landlord is saying to what the tenant is saying. The tenant or the landlord will either say, “Here’s the terms of the lease, here’s the lease agreement.” Or, if it’s in Rick’s situation, there’s no lease agreement, it’s will they just give me $400 cash per month and they’re month to month and this is their name, this is their phone number, this is all I have. Then I’ll contact the tenant, with the owner’s permission of course, and have them fill out an estoppel agreement which basically gives me more information about them but confirms what the landlord said. Are they saying their rent is also $400 a month? Are they saying that they’re actually in a five-year lease agreement where the landlord’s saying, “No, well you can get them out as soon as you close on the property”?
So there are steps that you can take. You can also use this as a negotiation too. I recently sold a property and the person purchasing it wanted the tenants removed from the property before buying. What we did was we gave notice for them to vacate. They were month to month, we gave the proper notice, they said, “No, we’re not leaving.” So we started the eviction process and we actually still closed on the property, but we held money back in escrow to pay for attorney fees if they had to continue with the eviction. We set a dollar amount, I think it was maybe like $1,200 or whatever to cover attorney costs if they had to continue with the eviction if the tenant didn’t leave. And so, when the tenant left on their own without having to proceed with the eviction, I was refunded that $1,200. And then if they would’ve had to go through with the full eviction, the buyer would’ve gotten to keep that $1,200 to help cover the cost.
There is some way that you can kind of address this issue before closing on the property is stating in your contract that the property to be vacant. In this exact situation here with Rick is you’re going to have to start the eviction process to get these people out of the units. Things to be concerned about is that there is no lease agreement to the property and you want to be careful that you go to court and all of a sudden a lease agreement appears. So getting some kind of documentation maybe from the previous owner stating that they were living there at this X amount, there wasn’t a lease agreement or they were month to month, something along those lines can definitely help your case.
But as far as doing your soul-searching for ethical obligations, you are well entitled to the right of that property, and just do the legal process of going through with the eviction. And then, Tony, you may know more about this as far as squatter rights. I mean, are they even paying any rent here or are they just living in the property? Because that can be a whole nother issue in itself where you would have to again go through the eviction process, but excuse me, in California I believe there’s very lenient squatter rights. Is that correct?

Tony:
I don’t own any long-term rentals in California. I never have. But I do know that, and don’t quote me on this because I could be a little off, but I’m pretty sure that even if someone just finds an open house and they stay there long enough with no permission from anyone, they can technically have rights as a tenant. It definitely is going to vary state from state, Rick. So chat with an attorney in your state to get that right information, but my preference has always been I just don’t buy property that have tenants in there if I don’t plan to keep those tenants.

Ashley:
Yeah, and I did a house flip with James Dainard in Seattle, Washington and there’s pretty favorable squatter rights there too. I always joked with him, well, if this deal goes south, I’m just going to move into the property and I can at least live there for probably a year or two for free to get my return back.

Tony:
Before you get evicted.

Ashley:
Okay, so let’s go on to our next question. This question is from Rob Young and also comes from the Real Estate Rookie Facebook group. “What are the risk associated with seller financing the down payment? I’m the buyer. The seller doesn’t own the home free and clear. I can get the mortgage but don’t have the money for the down payment. Seller is willing to extend terms. He would have to satisfy his mortgage when he sells. Any advice?” Okay, let’s kind of map this out maybe first. Okay, so Rob is going to get a mortgage to purchase this property. Okay, let’s just use, for easy math, let’s say he’s buying it for a $100,000. He’s getting a mortgage for 80%, so $80,000 and he needs $20,000. The seller is saying, “I will loan you the $20,000 for the down payment. You have to pay me X amount over five years,” or whatever that is.
So the thing with this though is that the bank is going to want to see where that money came from, especially if you’re doing it residential where you have to show that you earned that income or you had that money saved or that money came from you, or it was a gift from a family member. Seeing that you got the money from the seller may not qualify as proof of funds for the property. That’s the first discussion I would have is going to the loan officer, the lender that you’re using and ask about the situation.
If you’re doing commercial financing, I know that this happens quite commonly where the seller will do seller financing for the down payment. You disclose it to the bank, the bank runs the numbers and says, “Okay, this rental property can afford to pay its monthly expenses including these two mortgage payments, one to the bank for the $80,000 and the other to the seller for the $20,000. Approved. Go ahead. Let’s move forward.” But that’s my concern with this. Is this going to be residential financing or is this going to be commercial financing? So that’s kind of like the first step I would look at for this kind of situation.

Tony:
And I think, Rob, just to give you some clarity on kind of how the money flows between buyer, bank, seller, bank, because there’s a few steps in there, right? So going back to your example, Ashley, of say that Rob is buying this house for $100,000, he’s getting a mortgage for $80,000, and he has a down payment of 20, and let’s say that this seller maybe owes $35,000 on the house. Using round numbers, if they’re selling it for 100, they’re going to pay off their $35,000 mortgage, they’ll be left with $65,000 afterwards, right?
But Rob, the money just doesn’t flow from you directly to the seller. Usually there’s a third party in between. In California, we use title and escrow companies, and the way that it works is when the bank sends their check in for $80,000, they’re going to send that into title and escrow. Escrow’s then going to go to the seller and say, “Hey Mr. Seller, this money is for the property that you’re selling to Rob. We see that you still owe $35,000 to Bank of America for this property. So before we issue you any funds, we’re first going to pay off your $35,000 debt that’s due to Bank of America and you will get the balance which is 65,000.” So, Rob, you don’t necessarily have to worry about the seller paying off that initial mortgage because as long as you go through title and escrow, they’re going to make sure that any debt or any kind of liens, anything against that property are paid off before that money actually goes to the seller.

Ashley:
Yeah, so that’s a great point is you want to make sure that the money you’re paying, so that $80,000 in our example, would cover what is owed on the mortgage or that the seller does have the money. But like Tony said, that’s something that title will make sure happens at closing and you’re not all of a sudden going to own this property but there be another lien still left on the property from the previous owner.

Tony:
Ash, based on what you said, I do agree. I think it is common that you’ll see sometimes the seller will carry back some portion of the down payment, and honestly, I think there are some smaller banks, if Rob’s working with maybe a local credit union or something that might be comfortable with the seller having a second lien against the property as well. Rob, that’s typically where banks kind of feel weird, where they don’t want anyone in second lien position. They want you to have some kind of skin in the game and not another lender. But if you’re working with maybe a smaller credit union or local bank, maybe they are comfortable giving you 80k for the first and then having the seller give you 20k for the second. So I think it depends on what bank you’re working with.

Ashley:
Especially if you’re buying the property below market value. If you can show the bank comps and say, “Look, I’m buying this house for 100,000, but any other house that’s like this around me is selling for at least 150,000. I’m already buying it $50,000 below market,” or whatever that is, that definitely would help your case too.
Okay, so our next question here is from Eric Donno. “Cleaning and move-in fees, how do you work with fees? For my long-term rentals, I have been charging a move-in fee to cover a professional cleaning prior to move-in. My thinking was it’s better to do this than to take out the cleaning fee from their deposit on move-in. How do you deal with cleaning? Do you just eat the cost, take it out of the deposit upon move-in , don’t clean at all?” Okay, so this is more of a long-term question, but Tony, maybe after we go through the long-term rental situation, you can even cover it on the short-term rental side too.
For a long-term rental, you can charge a move-in cleaning fee. I don’t typically see this often. Really, I honestly don’t know if I’ve ever seen anyone do this. I mean, you can charge a fee, unless your state doesn’t allow you to do that. What I do is I do a cleaning checklist. When somebody moves into the apartment, they walk through with me and we do almost like an inspection of the property where they can say, “You know what? There’s this dent in the trim here. I don’t want to be charged for that. There is a stain in this corner of the carpet,” whatever these things are. They can go through and mark, or they’re going to go through and just say, “yep, everything is in great condition, great condition, great condition.” Maybe there’s a little wear and tear on one of the cabinets, they can mark that down. Document everything with photos, you as a landlord sign or the property manager, and then the tenant also signs, date it, and this is the date they receive their keys, they’re going into the unit. Okay? Everything’s fine and good.
Then when it is time to move out, they are given a cleaning checklist. I actually provide this upfront when they do move in. So hey, just so you know when you move out, this is everything that needs to be cleaned. I actually got this list from my sister. When she graduated college, she had to move away for a teaching job for a couple of years, and the apartment that she was in, I went to move her out when she was done and they gave her this cleaning checklist and it itemized everything as to if this wasn’t done, what you would be charged. So if you didn’t clean out the fridge, that was $10 or whatever it was. I mean, this was actually a pretty nitpicky list and where it’s wiping down the blinds, everything like that.
I remember my sister just freaking out that it wasn’t going to be clean enough. I mean, she literally did not even touch this place the whole year she lived in it or whatever it was. It was spotless. I remember the manager coming to do her move out inspection and he just glanced around, he’s like, “Okay, it looks great.” She’s like, “That’s it?” And he’s like, “Yeah, yeah, you took really good care of this place. Thank you.” And she had two days before spent just cleaning every little speck of corner even though there wasn’t even any dirt or dust in it. So implementing some kind of checklist where your tenants know ahead of time, this is the expectation for when you move out so there’s no surprise, and they’ve already signed that inspection sheet saying you both agree that it’s in good condition. There was nothing wrong with the unit when they moved in.
And then I always refresh, when they give their notice they’re moving out, give them that inspection sheet. That’s where you can write down this is the cost per an item. If the carpets need to be cleaned because there’re stains, they need to be professionally cleaned or something like that, that is $100 charge, whatever it is. Or, you can do a flat rate cleaning fee. If you don’t clean the unit, have this checklist of things cleaned, we’re going to charge you $250 because that’s what it costs us to have somebody come in and do that. And then when the tenants move out, they have their belongings. You come in and you do the walkthrough with the tenant stating, “Okay, this wasn’t cleaned here, this wasn’t there.”
In New York State in June of 2019, they actually changed the law where you actually have to offer the tenant to do the move out inspection prior to them actually moving out. When they give notice, I think it’s two weeks before their actual move out date, you have to offer them the chance to have an inspection there, it’s kind like a pre-inspection, so that they have the opportunity to correct anything. Say there’s a hole in the wall or something. This gives them the opportunity to patch and paint it, which if you guys follow me on Instagram, you can see that’s not always the best thing is to have your tenants do repairs on their own. That’s the way that I’ve done it and I typically see it is that there’s no fee charged and that can be taken out of their security deposit until after they have moved out.

Tony:
Yeah, that is a great breakdown, Ashley. The most experience I had with that was that property management company that I worked at after college, and their process was almost exactly what you just said where some period of time before the guests actually, or the guest, before the tenant was actually supposed to move out, they would do an initial walkthrough, and then the day that the tenant was returning the keys, they would do the final walkthroughs to make sure that everything was corrected. Whatever wasn’t corrected, they were billed, obviously taken out of their security deposit, and if it went over, then they would be issued an invoice, but they were billed for every item that was still outstanding. That was their process. But yeah, I don’t think I’ve ever met anyone that charges their tenants a move-in, like a cleaning fee when they move in to the property, but I guess Eric, if it’s working for you and people are still looking to say at your place and maybe it works, but like Ash said, there are a lot of other options there.

Ashley:
Okay, so that is it for today’s Rookie Reply. I hope you guys took away a ton of value from this. If there are questions that you want answered, please send Tony or I a DM on Instagram. You can leave a question in the Real Estate Rookie Facebook group where you’ll probably get a ton of responses before we’re actually even able to air the episode with our response on it. Thank you guys so much for joining us. I’m Ashley at wealthfromrentals and he’s Tony at tonyjrobinson, and we’ll be back on Wednesday with a guest.

Manga has been the fastest-growing category in the US comics market for the past dozen years, outpacing the growth of everything except graphic novels for young readers. Despite there being more manga than ever available to English-language readers, the amount that makes it over to these shores is just a fraction of the total produced by Japanese publishers.

Readers whose appetite for content exceeds the selection offered by publishers like Viz and Kodansha on legitimate apps know they can find what they’re looking for online, but only on legally dubious pirate sites. That leaves room for new companies offering ethical fans legal access to unseen and original material through licensing arrangements with smaller Japanese publishers, as long as the pricing is affordable and the selection compelling.

Azuki is one of several recent entrants into the market. Co-founded by five young industry veterans (Adela Chang, Abbas Jaffery, Evan Minto, Krystyn Neisess and Ken Urata) in 2019, the virtual company launched its app during the pandemic and has seen steady growth, an infusion of capital from Y-Combinator, and a burgeoning assortment of new titles. It has grown to an extended team of several dozen, and still operates virtually rather than out of an office.

“We had all worked at [Sony-owned anime platform] Crunchyroll and had kept in touch,” said cofounder and CEO Abbas Jaffery. “We asked ourselves what we’d want to see in a manga app, since we all saw similar problems in the existing models, and put in a lot of sweat-equity to build the app.”

At launch, the subscription service featured manga series from Kodansha International and Kaiten Books, and quickly expanded to include more publishers as well as exclusive titles directly licensed and localized by Azuki. Today, Azuki offers over 200 series including The Yakuza’s Guide to Babysitting, BLITZ, Gacha Girls Corps, Attack on Titan, Fire Force, and additional publishers like Futabasha, Micro Magazine, ABLAZE and Star Fruit Books. According to the company, the site has hosted over a million unique active users since launch and served up more than 30 million pages of content.

While the Azuki app is subscription based, the company just announced a program to distribute download-to-own ebooks of its original and licensed content on BookWalker, AmazonAMZN
, Apple Books, and Google Play Books, starting with My Dear Detective: Mitsuko’s Case Files and Turning the Tables on the Seatmate Killer!. The first volume of each series will be available for pre-order on BookWalker, and they’ll go on sale on March 23. Pre-orders for other platforms will go live in the coming days, according to the company.

“We want to provide people with a wide range of manga to read, and a wide range of how they can read it,” said Marketing and Licensing Director Evan Minto. “We do our own scouting of titles that subscribers will like. That curatorial approach gives us the mindset of a publisher, not just an app.”

Azuki has a narrow path to navigate in the digital comics space, which is dominated by Amazon’s comiXology service (which offers manga alongside other kinds of comics), dedicated manga platforms like Shonen Jump and Viz, and Korean-based Webtoon, which offers material optimized for mobile, vertically-scrolling format.

Minto says the combination of Azuki’s subscription model ($4.99 per month for unlimited access), emphasis on localization by professional teams of translators, letterers and editors, curation of diverse subject matter, and passionate approach to the material can help differentiate it from the rest.

“We offer a better discovery experience, because manga can get lost in other kinds of content,” he said. “A subscription model is different from the pay-by-chapter or download-to-own because it encourages people to try new material.” In addition, it allows fans to know that they’re supporting the creators rather than the hosts of the pirate sites.

“We feel we can provide more value in the manga market and help it grow faster,” said Jaffery. “We’re not even to 25 percent of where manga can be in the English-language market.”

Dave:
Welcome to today’s bonus episode of the BiggerPockets podcast. We’ve seen continuously new record highs for home prices for the last several years, and that is not necessarily where you want to buy. That is often why money is made during a corrections because you have an opportunity to buy below market value.
Over the last couple years, we are very, very clearly in a seller’s market. You know this because the rebidding wars, right? That means that the seller could just pick the highest offer. Sellers could really dictate the terms of any transaction. That has completely changed. What’s going on everyone? I’m Dave Meyer. I’ll be your host for today’s bonus episode.
We are giving David Greene a very well-deserved day off, so I can talk about one of my favorite topics, a topic I’m super passionate about and I’d like to think an expert in which is how to invest during a market correction. I think we all know that the housing market is very uncertain and a little bit confusing right now, but there are really good ways to invest if you can identify the right types of opportunities.
There is risk in today’s market for sure, but with risk comes reward, their sort of counterbalances for each other. And investing successfully during a housing correction is all about spotting the right opportunities and using the right strategies and the right tactics that are appropriate for this type of economic environment.
If you guys don’t know me, I work full-time at BiggerPockets as the vice president of data and analytics. I host the On The Market podcast, which comes out Mondays and Fridays. I’ve written a book called Real Estate by the Numbers. And through all of these efforts, all this stuff that I do and spend most of my life doing, a lot of what I do is study the housing market.
I talk to experts all the time. I look at data to try and understand what is exactly going on in the broader economy, what is going on in the housing market, and I try to make sense of it so that all of us as real estate investors can use the appropriate tactics and to know how to invest appropriately with the least amount of risk, the best amount of upside during this type of market condition.
And so through those efforts, and even though we are in a confusing economic time, there are absolutely still good ways to invest in real estate right now. This is not just an academic exercise for me. I am also a real estate investor. I’ve been investing for more than 12 years now. And I’ve already done two deals in 2023 even though I know that we’re in a housing market correction. And I can do that confidently because I know which tactics and strategies to use.
So to share all the information that I have gathered and that I use myself in my own investing, I recently created a webinar for BiggerPockets and how to invest during a housing market correction. So basically we’re going to replay that webinar for you today and we’re going to go over some really important topics.
First and foremost, we’re going to talk about what exactly is going on in the housing market right now and why it is happening. I think there’s a lot of fear out there about the housing market because if you don’t really understand the fundamentals that are driving the housing market behavior right now, it can be a little bit confusing. So we’re going to talk about what is going on.
Next, we’re going to talk about the strategies that you can use to mitigate what is going on in the current environment and then I’m going to actually help you learn how to find good deals in this market, analyze those deals, and ultimately execute on the opportunities that are coming right now. Because I want you all to know that there are actually good opportunities right now.
With the risk and the uncertainty that comes in this kind of market, a lot of people jump out of the housing market and that means there are better deals, there are better opportunities for the people who know how to adjust and invest in this environment. So without any more ado, we are going to jump into this webinar so you can learn how to invest during a housing correction. Do you feel some sort of economic or financial anxiety right now?
I know this is really common, A lot of people are feeling that. So if you’re feeling that way, that is completely normal. Maybe you’re worried about a recession, a lot of people are talking about that, or inflation has really had an impact on you, or you’re worried about a layoff or a job loss. These are genuinely stressful things. Why are they stressful? Because they’re out of our control, right?
As people, we get stressed about the things that we don’t have an impact over, that we can’t directly control. And for most people, money and finances and whether or not you get laid off are out of your control. But what if it were different? What if you had control of your financial future? What if you had more time to spend with your family and doing the things you love?
What if you earned money passively from sources other than your full-time job? What if you had the freedom to do what you want, when you want and with who you want? Well, that my friends is financial freedom and it’s really at the heart of what we’re going to be talking about today on today’s webinar. Because today is all about how to achieve really any financial goal that you have through real estate investing.
And we’re also going to talk specifically about how you can do that, how you can kickstart your investing journey really during any market conditions. By the end of this webinar, you will have a plan to build long-term wealth, yes, in today’s housing market conditions.
I know it might seem daunting to get started right now, but by the end of this webinar I promise you, you will have a plan and you will see that there is great opportunities to build long-term wealth even in today’s housing market conditions. Plus, we also have some great giveaways for you at the end. It’s something I don’t think I’ve ever given away before, so definitely stick around for that.
For today’s agenda, basically what we’re going to start with just talking about what in the world is going on in the housing market in 2023. That’s going to be first and foremost because I think if you understand that, if you understand what’s going on in the market and the fundamentals, some of the economic conditions that are driving the behavior and things that we’re seeing in today’s market, it will help you overcome any anxiety you have about the current day market.
Then we’re going to talk about what business plans work in the current market. If you know a little bit about real estate investing, you probably know that there’s a ton of different ways that you can invest in real estate, but only some of them work in today’s market conditions.
You can’t just go out there and buy anything, certain types of strategies, certain types of properties, certain types of tactics, probably not great for a correction like we’re in right now. But there are plenty that work during a correction, so we’re going to cover which ones you should be thinking about and focusing on given the current market conditions.
And then lastly, we’re going to talk about how to find those good deals. So once you know what’s going on in the market and what business plans work in this type of economic cycle, then you can go out and find the deals that work in this type of market and you can pursue them.
So that is today’s agenda. If any of you don’t know me, let me just quickly introduce myself so you know who is talking to you right now. My name’s Dave Meyer. I’ve worked full-time at BiggerPockets as the VP of data analytics. I’ve worked here at BiggerPockets full-time for more than seven years now, but I’ve also been a real estate investor for more than 12 years.
I mostly invest in rental properties. I also invest in syndications, I do some lending. I’ve been in short term rentals. So I’ve done a little bit of it all over the last couple of years and I’m really excited to share some of that experience with you. I also host On The Market podcast.
It comes out every Monday and Friday on the BiggerPockets podcast feeds. And if you like the type of information we’re talking about today, some of the data, market conditions, that’s what we talk about on On The Market, so you can check that out. I’m also the author of a book called The Real Estate by the Numbers, which teaches you how to analyze deals like a pro.
We’re going to talk a lot about deal analysis today because that is super important to today’s market condition. So I’ll share some of my expertise about deal analysis today, and that’s me. If you want to connect with me after this, you can always do that on BiggerPockets or you can find me on Instagram where I’m @thedatadeli.
I love data as you are going to see over the course of this podcast, but I also love sandwiches. It’s my other passion, so that’s why you get the data deli. But if you don’t have any questions or want to ask me anything after this webinar, the best place to do that is on Instagram where I’m @thedatadeli, check it out.
So before we get into this, so let me just tell you a story about how I got started investing in real estate. And as I said, I started over 12 years ago. I started buying in early 2010. And it’s hard to remember right now, but that was a very uncertain economic time. The housing market really started to go down in 2007 and 2008. It was still going down at that time, and so it was really uncertain.
When I first got started, I knew exactly zero people who were actively buying real estate. And when I told some friends and family that I was intending to get into real estate at a rental property, most people thought I was crazy because the market hadn’t bottomed. It was still really uncertain what was happening with housing prices. But I knew that over the long run housing prices really always go up, even though 2008 was just so you know, the worst housing crash I think I’ve ever, than I’ve ever seen data for in the United States.
And so even though I saw that, I knew that housing prices over time, asset prices go up. And so I did a couple of things back then to protect myself and to ensure that even though that I was buying in uncertain market conditions, that it was still a good investment. So the first thing I did was I bought well under the list price.
I knew that the market hadn’t bottomed yet and I was a little bit worried that prices could fall a little bit further. So what I did was when I offered on properties, I offered below what the current market value was. That way if prices fell a little bit further, then I would have some cushion on my equity. The next thing I did was I earned money from things that don’t really concern housing prices.
And we’re going to talk a lot about this today, that housing prices do not equal profit. There are many other ways that you earn returns as a rental property investor. So I made sure that I bought a property that headstrong cash flow, that I earned money for amortization, otherwise known as loan pay down and value add.
I was able to make the property more valuable than it originally was through concerted and specific actions. And I also got great tax benefits which weren’t in any type of market conditions. So I focused on these things even though the market was really uncertain and I didn’t know what was going to happen and I pulled the trigger.
And now looking in retrospect, I can tell you what happened, and what happened was the value of my property actually went down after I purchased it, not by a whole lot and I was protected against it because I bought under asking price, but the housing market, at least in Denver, didn’t really bottom until 2011 and I had bought in 2010.
So for a short period of time there I was seeing my property value go down at least on paper. But it didn’t really matter to me because I was earning really good cash flow, I was still getting amortization and I was doing value add. I was getting great tax benefits. And 12 years later, I obviously don’t really care that my property value went down temporarily because over time, as the housing market always does, and we’re going to talk about that a lot today, it went back up. And you only lose money if you actually sell the property.
Right? The housing prices only matter at two points, when you buy the property and when you sell the property. What happens between those two things, of course it matters sort of emotionally, but it doesn’t really matter. And when I sold the property, this property I sold back in 2018, it had gone up literally three times the amount. So yes, it went down a little bit. I bought it for something like $457,000, something like that. That’s very precise. I bought it for about $457,000. In 2018, I sold it for well over a million dollars.
And I’m not saying that’s going to happen for every deal, but yes, it was a little bit concerning that housing prices went down, but housing prices go up over the long run and I was easily able to recover that and more because I had a long-term business strategy. I also want you to know that I wasn’t just buying deals back then. I am practicing what I preach. I have done deals already this year in 2023, even though I know the housing market isn’t a correction.
I study this for a living. I know we’re in a correction, but I’m still doing deals because I know these things. I know how to analyze deals given the current market conditions. I know that housing prices do not equal profit. There is a lot more that goes into rental property investing than just the value of your assets. And I also invest using the specific business models that work in any market conditions.
So that’s what I’m doing. But let’s get to you. Right? Should you be buying in today’s market, right? Let’s get to the elephant in the room and talk about what is going on in today’s market. I want to just start by telling you this, that every experienced investors I know, it’s not just me, but every experienced investor I know is active in the market right now.
And that is because experienced investors, generally speaking, not every single person knows this, but experienced investors know a couple of things. People have been through some market cycles generally know these things. The first thing is that money is actually made during a correction. Right? You don’t necessarily want to buy at the top, which is where we’ve been over the last couple of years.
We’ve seen continuously new record highs for home prices for the last several years, and that is not necessarily where you want to buy. That is often why money is made during a correction is because you have an opportunity to buy below market value. And of course, I really want to stress this a lot today over the course of this webinar is that you cannot buy just anything. Don’t go out and just buy any home that you see. You need to buy smart.
But the lesson here is that corrections create opportunities, right? Risk and reward, it’s like yin and yang. They balance each other out. So yes, is there risk in the market right now? Yeah, there is risk that the market is going to go down. But that risk also creates opportunities. You just need to find them. As the great Warren Buffett, one of the most famous investors in the world said, “Be fearful when others are greedy.
Be greedy when others are fearful.” And I think others are fearful right now. And I know it’s logical to be fearful in some ways right now, but if you know what experienced investors know, you’ll see that there are great opportunities right now. The main reason there are opportunities is because we are now in a buyer’s market. This is something that confuses people a little bit so let me just take a minute to explain this.
But what it means when I say that we are in a buyer’s market, it means that buyers have the power. Right? It’s that when you’re going to negotiate, usually one side or the other has more leverage. Either sellers have the leverage, that’s a seller’s market or the buyers had the leverage and that’s a buyer’s market.
Over the last couple years we were very, very clearly in a seller’s market. You know this because there were bidding wars, right? That means that the seller could just pick the highest offer, that buyers were often waving contingencies like their appraisals or their inspections and sellers could really dictate the terms of any transaction.
That has completely changed. We are now in a market where buyers have the power, buyers are being able to negotiate really great concessions. Buyers are getting sellers to pay down part their rate on their mortgages. Right? So buyers have the power. And today, you’re going to learn how to use that power to your advantage.
The other thing, I said this a few times and I’m going to keep saying it, the other thing that experienced investors know right now is that housing prices do not equal profit. And I know it’s easy to focus on housing prices, but there is so much more to real estate investing than housing prices. There are actually five different ways to earn money, and appreciation, which is really housing prices, is just one of them.
It’s also the least important, which we’re going to talk about. But I just want you to know this isn’t stock. This isn’t buying a stock, this isn’t buying crypto. The price of an asset isn’t the only consideration in real estate investing. You need to factor in other things like cash flow and amortization, value add and tax benefit. So that is why so many people I know are active and why I think you should at least consider buying in today’s market.
So let’s just dive into, let me just explain for a few minutes what is going on with the housing market. Because there’s a lot of understandable fear, but I think I really find that if you understand the fundamentals, what is driving this behavior, fundamentals of the housing market, it can help you overcome any market anxiety that you have.
So we need to discuss this because you, I’m sure you’re all wondering, should I really be investing? What happens if prices go down? And these are very reasonable questions. So let me just explain what’s happening in the housing market. Over the long term and the history of the United States, housing prices typically go up, they trend upward.
Over the long run they have always, always, always gone up. Now there are times when it goes down, that’s known as a correction. There are time when it goes flat as well, but over the long run it is normally a relatively boring and predictable thing. Housing prices go up slightly above the pace of inflation. Now what’s happened since 2008, since after, in sort of the aftermath of the great recession is we’ve been in a low interest rate environment.
And what happens when interest rates are really low is it makes leveraged assets like real estate, things that you take out loans on. That’s what leveraged asset means. It makes them, the value of them go up. So we’ve seen asset values go up a lot from 2008 to 2020. Then when we got to 2020, things basically just went on steroids. It’s the same situation in a lot of ways, but it was just even more dramatic, right?
Interest rates went even lower than they have ever been. And then we also had the combined impact of all this money printing, all this increase in monetary supply which just made affordability skyrocket. And affordability is a really important factor in the housing market, because when more people can afford to buy homes, generally speaking, more people want to buy homes. Right?
We are now at a part where millennials, which is the largest demographic group in the United States now are reaching their home, peak home buying age. So a lot of people want to buy houses right now. And in 2020 with all this money printing and super low interest rates, a lot of people jumped into the market.
And I think this is something that people miss is that in 2020 and 2021, even though prices were going up a lot, it was one of the most affordable times in US history to buy a home. Because interest rates have a huge impact on affordability, so does all the increased monetary supply. And though, even though prices were going up a lot, it was still really affordable.
When I think about the housing market, I like to think of it as a scale sometimes, right? Because there’s not one thing that is impacting housing prices. Right? It’s not just mortgage rates, it is not just supply, it is not just affordability, it is all these different things. And from 2020 to 2022, literally every single variable that I can think of, every important factor that impacts the housing prices was putting upward pressure on the market.
It was all on one side of the scale. Right? Everything from bond yields, mortgage rates, demand, inventory, supply, how much money people were making in crypto and stock markets. All of those things contributed to the housing market going up and up and up and up. And that’s basically what happened up until June of 2022.
But then things obviously changed. Right? The fed in response to high inflation started to raise interest rates. And that has a negative impact on affordability. And affordability, like I just said, is super important in the housing market. And when affordability turns negative, it puts downward pressure on pricing. So ever since mortgage rates started to go up, we have entered what I would consider and I would call a housing correction.
Now this doesn’t mean that everything is going to crash necessarily. Right? As I just said, when I think about the housing market, I think of it as a scale. Right? There are different variables and they balance out to impact prices. So whereas in 2020 and through 2020, the first half of 2022, everything was pushing prices up. Now some of the major factors have moved to the other side of the scale.
Right? Now, demand and affordability are putting downward pressure on the market. Right? That doesn’t mean that everything is pushing down. Inventory, supply, demographics are still sort of on that upward pressure side, but we are now in a much more normal market where certain macroeconomic conditions are pushing the housing, are putting upward pressure on the market and certain macroeconomic conditions are putting downward pressure on the market.
And this is normal. But right now I do think there is more pressure downward and that’s why we’re seeing prices to start to come down. Prices have definitely come down on a seasonally adjusted, inflation adjusted basis since its peak in June of 2022. I don’t know what’s going to happen, but personally I believe housing prices are going to continue to fall through 2023.
And that’s okay. We’re going to talk about that. It is okay that prices are going to fall. As I’ve said, I’m still investing and I still think there are opportunities, but this is what I want you to know. I’m explaining this because I want you to know that this is not 2008. There are very considerable differences between what is going on. And yes, housing prices are going to come down, but I personally don’t think that there’s going to be this foreclosure crisis that we saw in 2008.
I don’t think there’s going to be selling, forced selling which caused the extended decline of housing prices in 2008. To me, this is all about affordability. And as soon as affordability improves in the market, we are going to see people jump back in the housing market’s going to bottom and resume probably it’s boring growth. I don’t think it’s going to explode again, but that boring predictable growth that we as investors actually really like.
I love boring, predictable growth. And so to me, this is really an issue about affordability and there are still, the thing that encourages me and why I’m still buying is that there are still very strong long-term fundamentals for the housing market. Even though we were in a short-term correction, I think there are three things that really point to better housing prices and that a resumption of those long boring gains in housing prices over the long run.
The first one is housing shortages. Experts estimate that the US is somewhere between three and seven million homes short of how many homes we need for people. If you know anything about supply and demand, when there is a shortage of supply that puts long-term upward pressure on prices. So I think that’s something that encourages me that home prices are going to go up again after this correction.
The second is demographic demand. Right? I just said that millennials and Gen-Z are starting to hit their peak home buying age. And there are a lot of these people and they want homes, they want homes just as much as everyone, but they’ve been priced out of it and they have a lot of demand for these homes. So once they can afford it again, I truly believe that millennials and Gen-Z are going to jump back into the housing market.
And the third one is credit quality is really high. The reason in 2008 that the housing correction got so bad and turned into a full-blown crash for several years is because the loans that people were using to buy homes were absolute garbage. People were not qualified to be taking out the loans that they were. There was really no chance that a lot of these people were ever going to be able to repay the loans that they had taken out.
And that is not true anymore. Credit quality is extremely high right now. And even though we are entering a correction, foreclosures and people going into forbearance and defaults are still very, very low in a historical context. So I’m going to say this again, the correction that we’re in right now is real. Housing prices are going down. But the correction is affordability problem.
It is not some fundamental problem with the entire housing market, it is a problem with one part of the market, which is affordability. And affordability problems get resolved in one of two ways. And I want to just be clear, they do get resolved. So basically the two things that can happen is one, home prices could go down. Right? That would help improve affordability. We’re already starting to see that.
That is one symptom of an affordability problem, is housing prices start to come down. The other way that this gets resolved is mortgage rates come back down because that has a huge impact on affordability as well. And those are the two different things that can happen. And in reality it’s probably going to be a combination of the two.
We’re probably going to see housing prices come down in 2023 and then we’re also probably going to see at some point in either late 2023 or some point in 2024, we’re going to see mortgage rates come down into the low 6%s or even the high set 5%s. And that’s going to restore affordability into the housing market and it will probably bottom out and start to grow at that slow and boring predictable rate again.
So what happens during this type of affordability correction is that certain markets, the ones that are really unaffordable, think markets like I don’t know, Seattle and Austin and San Francisco, New York, the markets that are very unaffordable are probably going to come down the most over the coming years.
Because this is an affordability crisis, and those cities, they’re all very, every city is very different. And those cities are probably going to be impacted the most. On the other hand, there are certain markets that are still relatively affordable and if you don’t live in one of these cities, you probably find this hard to believe, but it is true. There are still markets where you can find affordable homes.
I think of a city like Philadelphia where you can see that these markets are still relatively affordable for the people who live there. And these markets will probably stay flat, they might go down a little bit or stay relatively flat and some of them could keep growing. I just read something recently about how home prices in Boston are still going up.
So we’re going to see different behavior in different markets. And to me, it’s really dictated by affordability. Now the question many of you are probably wondering is when is this going to end? When are things just going to become easy and simple and predictable? And I’m sorry to say we don’t know. I know that you were hoping that I have some crystal ball and I could tell you when the market is going to bottom, but I just don’t know.
But the thing that you shouldn’t know is that that’s okay. It is okay that we don’t know it’s going to bottom because there are still ways that you can invest in today’s market and we’re going to get into that. So let’s get into it. What works in this market? Let’s talk about business plans and tactics that work for investing in this type of affordability correction that we’re in.
So the first thing to me is planning past the uncertainty. So I know it is uncertain what’s going to happen this year in 2023. It’s kind of uncertain what’s going to happen in 2024. I don’t know what’s going to happen with housing prices, I just told you that. But I know I feel very confident that five years from now housing prices are going to be higher than they are today.
10 years, they’re going to be even higher than that. So I look at long-term business plans as the best possible option during a correction. And to me, rental properties are the best long-term option out of all the different real estate investing options. And I’m not saying that flipping doesn’t work. I know people are making a lot of money flipping right now and short-term rentals still can work.
There are always deals that work. But to me, for newbies, for people who want to think about the long-term, I highly recommend rentals right now because they are designed through the type of long-term hold period that work best during this type of correction. And long hold periods reduce risk, right?
We’re seeing market volatility right now, but if you hold for a long period of time, you get to take advantage of that long trend that housing prices go up. And if you hold for a long time that increases the probability that when you’re going to sell you’re going to sell for a higher price than you bought for. I’ve actually done some research that shows that if you hold a rental property for seven years or more, there’s almost a 0% chance that you sell for less than what you bought it for.
Obviously it depends on all these different things, but when I did that for rental properties, there’s about seven years gets you to a 0% chance. When you do it for a stock market, it actually goes up to 20 years. So when you look at real estate prices, they really are relatively predictable over the long run, not over the next year or two, but over seven to 10 years it is relatively predictable.
The counter to that though is if you want to buy real estate and sell it in the next year for a quick buck, that now is probably not the time to do that. That’s pretty risky. If you want to do a flip and you’ve never done it before, I personally wouldn’t do that. But if you want to buy a rental and hold it for at least five years, seven years, 10 years, there are going to be great deals for you right now.
The key to buying right now, the number one thing you need to do is buy below asking price. If you think your market is going to go down by 5%, make offers 5% below asking price. Right? That just makes sense. Right” If you think, “Oh my god, over the course of the next year it might be 10%. My market is really risky, it’s unaffordable.
I’m going to go 10% below asking.” If you buy 10% below asking and then the market goes down, you still have cushion, right? You have an equity cushion and you’re still benefiting from it. So you’re not 10% below where you bought it, you’re actually just in line with where the market goes over the next year or two.
And don’t worry about the exact number, no one knows how far your market might fall, but if it’s five to seven percent, make a 7% offer under asking. If it winds up 5% under asking, that’s okay. My property value went down when I bought my first deal. But you want to get close to where you think the market might bottom to give yourself that equity cushion.
And I want to, I’ll stress this again later, but you have to be really, really patient, right? There is no frenzy anymore. There is no need to waive contingencies, to be the first person to go see a property, to make the first offer. You can afford, and you actually need to, not just afford to, you have to be patient right now.
You need to wait, you need to negotiate, you need to find the right deal. Not every seller is going to take an offer below asking, especially on the first offer. If they just put their deal or house on the market five days ago, they’re not going to take a 7% below asking, but we’ll talk about how to find the right deal. So just be patient, know that right now. Again, know that housing prices do not equal profit.
This is super important. And I’ve said it and I’ll say it again, I’m going to return to this right now and talk about the five other things that we, how you make money in real estate. So there are actually five ways and market appreciation like the asset value, the value of your asset is just one of them.
And the thing is that about market appreciation is that this is, when I talk about market appreciation, I mean basically the price of houses going up by market forces like macroeconomic trends. But the truth is that experienced investors don’t underwrite or plan for any market appreciation.
Maybe the rate of inflation, but personally I don’t plan on it above in the rate of inflation, even during good times. Most experienced investors know that appreciation is the least reliable way to make money in real estate. No one is counting on this. I write about this in my book Real Estate by the Numbers pretty extensively and that it’s just true that no one really counts on this.
The things as an investor you want to focus on are the ones that you could directly control. And market appreciation, I’m sorry to say, is something that none of us control. But the good thing is that there are four other things that you can control. The first one is value add. This is sort of like flipping or renovating a property.
It’s basically you look for properties that need renovations and the pull point of it is to improve the property by more than you pay to make the improvement. So maybe you buy a house that needs some help, you put 50 grand into it, but by putting that $50,000 into the property, you raise the value of that property by a hundred thousand dollars.
So let’s just say you buy a property for 300 grand, you put 50 grand into it, but all of a sudden due to the value that you’ve created in that property, that property is now worth $400,000 and you’ve just earned yourself a $50,000 profit by adding that value. This is basically the premise behind fix and flip. And it also works with rental properties.
A lot of rental properties need improvements, they need a nicer kitchen or new bathrooms or to add a bedroom. So these are things that work really well in these types of corrections because the prices on properties that need rehab fall further than properties that are in really good shape.
So if you go out and look for new construction or a really prime location, a great property that’s beautiful and already really nice, the prices on those tend to fall less even during a correction than the ones that need a lot of work. And so that’s why value add works in a correction is because prices tend to fall pretty far for these rehab, these homes that need rehabs.
All right. The next profit driver, the next thing that earns you a return as a real estate investor is cash flow. We all love cash flow, right? Cash flow is why so many people get into real estate investing and it’s what? It’s the lifeblood of financial freedom because it can replace the income from your full-time job. Cash flow, if you don’t know what it is, it’s basically the money you receive every single month from rent above and beyond your expenses.
So if you collect two grand a month in rent and you have $1,500 a month in expenses, then you make $500 a month in cash flow. I’m just making that up, but that is what it is. And the great thing about cash flow is that it is not really market dependent. If your housing prices are going up or down over your first year, you’re still getting cash flow, right? Rents are extremely, extremely sticky.
Even during 2008 to 2011 when housing prices went down more than 20%, rent really never went down. Rent is extremely sticky even during a recession, even during a correction. And so cash flow, you can still be earning a great return on cash flow even during a market correction. So that’s something you should absolutely be focusing on right now is value add is great, cash flow is always important.
I never recommend someone buy a property that doesn’t cash flow. We’ll talk about how to analyze deals in just a minute about so you can make sure that your property is cash flowing well. The next one is amortization, which is basically some people call it loan pay down as well, but it basically means when you pay your mortgage using the rent that you collect, your tenants are basically paying down your loan for you.
And that means when you go to sell your property several years from now that you owe the bank less when you sell it. So that actually earns your return, it’s somewhere between three and 5% depending on the loan. But the great thing about amortization is it is also not market dependent. Right? So as we’ve already talked about, cash flow, not market dependent. Amortization or loan paid out, not market dependent.
Value add does really well in a market correction. So these are three ways that even buying during a volatile time in the housing market, you could still be earning really good returns that are probably above and beyond what you would earn in the stock market.
The last one is tax advantages. And it’s not necessarily like income, you don’t really earn a return for tax advantages, but it means that you get to keep more money than you, more of the money that you make you get to keep. And real estate is, I mean this is just generally true, real estate is the most tax advantage asset class out there.
There are a lot of different ways that you can use real estate to keep more of your income every single year. And again, this is another one that is not dependent on what is happening in the economy. So you get value add, you get cash flow, you get amortization, you get tax benefits regardless of what is going on in the housing market.
The only thing that’s impacted by the broader market is market appreciation, which most experienced investors agree is the least important of these five profit drivers. So if there’s one takeaway from this section is that not all profit drivers, not all of the ways that you earn returns from real estate investing are impacted by market volatility.
The last thing I want to say about things that work right now, I said focus on all these different profit drivers, I’ve told you to buy deep, and the last one is that financing strategies, there are other ways to get better financing. And I know a lot of people are daunted by the high mortgage rates, but a lot, you see these headlines that people are paying six and a half percent or 7% in some cases, somewhere around there.
But right now you can find a lot of different creative ways to finance your properties. The number one rate is rate buy downs. So because it’s a buyer’s market, you have the power to negotiate. A lot of people are having their sellers do some negotiating with the seller to do something called a rate buy down where the seller basically pays some money up upfront to your bank to lower your interest rate.
There’s something called the 2-1 buy down where basically the seller pays a couple thousand dollars on your behalf and then your interest rate is 2% lower for one year and 1% lower for another year. So right now you can be getting a mortgage rate in the fours or fives for the next two years and then you can refinance later. There’s also great seller financing and create a financing opportunity. So I really recommend you learn a little bit about this.
I’m not going to get into all the details today, but I really think you should not focus on that headline mortgage rate until you talk to a mortgage broker, because… Or a real estate agent, because they’re going to tell you that that six and a half, seven percent is not necessarily what you’re going to be paying for the next few years. You can probably pay something lower than that and then refinance later.
So definitely take advantage of that. But overall, when we talk about the things that work during a market, here are the main takeaways. Number one, find deals that make money regardless of market appreciation, right? This is true even not during a correction. You don’t want to find deals that need to appreciate in value from market appreciation just to make money.
You want to focus on deals that make money from cash flow, from value add, from amortization and to take advantage of the tax benefits. That is definitely true. The number two takeaway is time is your friend. Right? You want to hold deals for a long time to smooth out market volatility. Right? If you’re looking for short-term deals, probably not a great time, they’re pretty risky right now.
But if you’re looking at deals that you’re going to own for two, three, five years, then these are really good opportunities because you’re buying well below low market value. And even if things go down a little bit over the next two or three years, over the long run, they are going to appreciate in value and you’re going to get to take advantage of all five of those different ways you make money with rental property investing over a long period of time.
The last thing is to also take advantage of creative financing. I just did a deal a couple weeks ago, I’ll just tell you what I did. I bought a home or I participated in a deal where we bought the property for 30% below peak value, 30% below. Right? Most experts, even the people who are the most pessimistic about the housing market, do not think the housing, that prices are going to fall 30%.
So I’ve just bought something that is 30% below peak value. So I might already have earned some equity in this deal. And when the market starts growing again, it’s only going to go up from there. This is a very heavy value add deal. That’s why I was able to get it for so cheap is because like I said, deals that require renovation and value add are going to fall further than other types of properties during this type of market condition.
So I was able to negotiate this one. And then it has a five to seven year business plan. We’re planning to hold this thing for a long period of time. And that means that we’re not too concerned about if our value, property value fluctuates over the next couple of years because we’re planning to hold it for at least five to seven years.
And we are very confident that asset values are going to grow a lot, a lot from the point where we bought it at, because we bought it super, super low. So hopefully that just helps you understand how I am thinking about it, how I’m using these business plans in today’s market. So once you know, you understand some of the strategies and tactics that work in this type of market conditions, let’s talk about how to find good deals today.
For this, I like to use something called the LAP System. Brandon Turner came up with this, but I love it, so we’re going to use it. LAP stands for leads, which is basically looking at a lot of properties. Analysis, which basically means find from all the leads that you get. So you look at a hundred different leads, you need to go the analysis phase where you’re going to start breaking down the specific deals and figure out which ones are right for you.
Then you have to pursue the ones that are good and then that leads to success. Right? So it’s about being a funnel. Right? You need to look at a hundred deals, maybe you analyze 10, you pursue two, and you actually succeed on one of them. Think about your deal flow in terms of this funnel. Because the first deal you analyze probably not going to be the right one even in good market conditions, but in this type of market conditions, it’s even more important that you look at a lot of deals, analyze all of them and only select the cream of the crop. Right?
You only want those couple of deals that are going to be really good for you in these market conditions. Because there’s a lot of garbage out there, and that’s absolutely true. And at any marketing conditions that’s true. But right now there’s a lot of garbage and you don’t want to be stuck with that. You have to find the right deal.
So where do you find these leads? The first place to look is on market deals, right? Look for on the MLS, it is the simplest thing in the world. Just here are two tricks. Right? And the MLS is just like Zillow or Redfin or Realtor.com, just people putting their houses up on the market. And I know over the last couple of years it’s been hard to find deals on the market. One of the benefits of a correction is that there are deals back on the market right now.
You can go on the MLS and find cash flowing deals on the MLS right now. My two tricks for looking at the MLS when you’re doing this are one, look for deals that have come back on the market. So sometimes deals fall out of contract. And in those situations, sellers are usually pretty frustrated and they just want to get over it, right?
Imagine if it were you and you had a buyer lined up like, “Oh, I’m going to sell my house. This is going to be amazing.” And then right at the end, the deal falls through. You’re going to be pretty frustrated and probably pretty willing to negotiate with the next person who comes along who’s willing to buy your deal. So look for those deals. There are filters on Zillow or Redfin for deals that have come back on the market.
The second thing you want to look for are deals that have been on the market for a long time. Because again, these are going to be situations where you have the most leverage. Like I’ve said, you’re looking at a buyer’s market and you want to exert your leverage as best as possible. Right? And so the best way to have leverage is by a seller who’s not able to sell. And how do you know that they’re not able to sell?
It’s because their deal, their house has been sitting on the market for a long time. So look for those two things for on-market deals. Deals that have come back on the market and deals that have been on the market for a long time. The next thing to look for is off market deals. And these are still good. And off-market deals are great, but they’re honestly not as important as deals as it was a couple years ago. In 2020, 2021 it was almost, it was basically impossible to find cash flowing deals on the market on the MLS.
It happened, but it was pretty rare. You had to really search for them. So a lot of people, a lot of investors resorting to off-market deals, driving for dollars or working with wholesalers. And those still are good, especially for value add projects, you can still do those things. But you can still, you don’t need to go off market anymore. And that is one of the great things about a correction.
Like I said, there are benefits to being in a correction, and this is one of them. You can find deals on the market, which is really good. The key for all of these things is to negotiate, right? Sellers are still in their mind. They’re anchored to the idea that they could sell for what they could back in June of 2022. That is not true. They can’t sell for that.
The market has changed, the market is correcting. As the buyer, you need to nicely and in a productive way convince them that that price is no longer reasonable and that you need to buy under market value, that you need rate buy down so you can pay a lower mortgage rate.
This is what really matters is that you negotiate. Whether you find the deal on market or off market, you really need to negotiate. And that is why it is always important to have a great investor friendly agent because agents are often doing the negotiations on your behalf.
Obviously, you need to know what you’re doing to work with your agent and tell them what kind of offer you want to make, what sort of concessions you want to ask from, from the seller. But having a great investor friendly agent is super important for that. If you want to find one, you could do that on BiggerPockets. We have a free tool to meet investor friendly agents.
It’s biggerpockets.com/agent. You can check that out for free. I’ve found agents there. It’s really helpful and that helps with your negotiation. But remember, when we’re talking about our deal funnel and the LAP system, the highest part of the funnel is leads, right? But remember that most leads, they don’t make good deals.
And that’s okay. If you find a lead and you’re like, “Oh, that seller doesn’t want to sell to me for the price,” that’s fine. Don’t get frustrated. That is part of the business, that is part of the gain is that most leads don’t make good deals.
You have to analyze each of them to find those special deals that are going to be the best for you and that are going to help you build that long term wealth. Deal analysis is my favorite topic in all of real estate and is why I wrote a book about it. And we’re just going to, to talk about deal analysis and how you take the leads, how you go from working with your agent, working off market to find these leads, to picking the ones that work in this type of market.
I’m actually just going to, we’re going to go through a deal analysis together. So I’m going to just switch my screen share here. Hopefully this just works. So we’re going to go to the BiggerPockets calculator. So as you can see here on my screen, I use this BiggerPockets calculator all the time because it is a varied handy tool to be able to take all those leads that you have and analyze them.
When we’re talking about the LAP system and you have all these deals and all these leads, say you have a hundred. To find one good deal, you might need to analyze, you might need to look at a hundred different leads. You need to be able to analyze deals quickly. Right? If you’re building a spreadsheet for every single lead that you’re doing, it’s going to take you months. That’s never going to happen.
So I use the BiggerPockets calculator because it allows me to analyze deals really quickly and hone in on the properties that I actually want to make offers on and ultimately buy. So here’s what it looks like. I actually am going to go to the BiggerPockets, they have this place where you can find deals and just look for different types of deals.
And I wound up picking out one before. It’s this deal here in Memphis, Tennessee. You can see that I just went in here and looked for things, but people love Memphis. I’ve never actually been there, but people seem to love it. And I found this deal kind of interesting because it’s a new construction built for rent. This is a really common strategy built for rent right now.
I’ve never done it before, but I thought it’d be fun to analyze this one. So let’s just do this. So the first thing you need to do to do deal analysis using the BiggerPockets calculator is just to put in the street address. So we’re talking about Ardmore Street. What do we got here? 35, 32 Ardmore Street. You just click that in.
Actually, the calculator’s going to fill that in for you and we are on our way. So look, next what we want to do is I like to add a photo just so I can remember in my mind. When you’re looking at a lot of deals and a lot of leads, the addresses kind of sometimes get messed up in your head. And so I like, I’m just a more visual person I guess, but I remember the photo.
So I’m going to just upload this photo here so I can remember what this house looks like. It’s kind of cool looking house. So now we do this, I’m just going to hit next. So we’re well on our way, we’ve just entered the address, now we’ve entered in a photo. Now it’s time to get down to the numbers, my personal favorite part. So purchase price. So let’s go back here and see, what did we say?
Let’s just assume right now that they are offering 157. That’s what they want to buy it for. But as I said, we’re going to buy deep on this property. We are not going to just offer a purchase price. So I’m going to say 145. I don’t know if that’s a good deal, guys. I’m really, just over the course of this I’m not going to be super precise with my numbers.
I’m trying to show you how to analyze these deals so you can do it for yourself. But let’s just say that we want to offer 145 instead of 157. Purchase closing costs, I’m going to put about $4,000. And if you’ve never bought a deal before, you might be wondering, “How do I know $4,000?” Well, I’ve bought a lot of deals, so I know that for myself.
But on the BiggerPockets calculator we also have these help tools. So if you look over here and hover on this stuff, you can see that there’s some tips to fill this out. So you can see that typical closing costs are around one to 2% of the purchase price. So the property can differ depending on location and financing. So if you’re unsure, one and a half percent. So I’m going to do about 2%. Actually, I did more than 2% just to do that.
You can rehab your property if you want to. If you’re doing a value add, you’re going to want to click here and say rehab your property and put in your after repair value. That’s how much you think the property’s going to be worth after you put some money into it. And then you need to put how much repair costs are going to be. Because this deal is a build for rent, it’s the brand new construction, I’m not going to be rehabbing.
We’re not going to be using the value add strategy. Instead, I’m going to be focusing on those other profit drivers of cash flow, amortization and my tax benefits and we’re going to see if this is a good deal. I honestly have no idea. So I’ve never done this, so we really are just going to figure this out ourselves. Then let’s go down to loan details.
So if you look at the left side here, you’ve seen we’ve already put in property info. Now we’ve done purchase. Now we’re going to go to loan details. As an investor, if you’re not going to own or occupy, you usually have to put 25% down. I know 20% is normal, but if you’re living in the house. I’m not going to live in this house, so I’m going to put 25% down and my interest rate I’m going to say is 6%.
I know I would love a rate buy down, but I’ll get to that in a minute. Right now, actually let’s even put six and a half percent, let’s just say six and a half percent. That’s about what market rates are as of this recording. And I’m going to do that over 30 years, right? Again, if you don’t know what loan points are, if you don’t know what loan terms are, you can click on these help buttons and they’ll help you figure those out.
Guys, we’re going pretty quickly and I’m talking a lot and now we’re up to already up to the fourth of fifth steps here. So you can see how easy honestly it is to analyze deals. The next thing we need to do is figure out our rent income. And this is often the hardest thing for people is to figure out what things are going to rent for, but there are two ways to do this.
You can go on Apartments.com or Zillow or whatever and just look around your area for comps, but you can also use the BiggerPockets rent estimator, which I’ve pulled up here, which can do this for us. So I’m actually just going to go back and just enter this property in again and show you how to do this. So all I need to do is enter the address into the real estate rent estimator and hit search address, it’s four beds, two bath, and I’m going to search address.
And right here what it tells us that our median rent is 1030 and what we can do is then decide if that’s an appropriate amount. So when I click around, I can see all the comps in my area and I can see that just down the street there’s one similar property renting for more than that, at 1075 or a couple blocks away, we have one for 1250, we have one for 1335. And honestly, what this is showing us is the median rent.
That means it’s the median, the middle quality product, which is important, but because this is a new build, I actually think it’s going to be a little bit higher than this. So I’m going to just enter at 1100, right? I think that’s a fair number. I want to just point out on the listing, they say the projected rent is at 1450.
Based on what I just learned from the BiggerPockets calculator, I don’t believe that, so I’m just going to say 1100 because just given my experience, I think 1100 is probably about appropriate. When during other types of times you can enter annual income growth. And over the last couple year rent have grown by crazy amounts, but I personally don’t think that’s going to continue and so I’m just going to put 2% in which is about the pace of inflation normally.
I know inflation is way higher right now, but I just don’t think rent growth is going to go up that much. And because I’m a conservative investor, definitely want to be conservative in this type of economic conditions. I’m only going to put very modest 2% annual income growth. I also want to point out that I left it like that for property value growth just at 2% here too because I don’t want to forecast market appreciation. I said that a couple times.
I don’t count on market appreciation, and so I’m putting that assumption into the calculator to show that I am not banking on housing prices going up a lot to earn my return. Next, we have property taxes. I’ve looked this up. It’s about 1500 bucks per year. Insurance in this area, I looked this up before the webinar, just so you guys know. I haven’t run the numbers, but I looked these things up so I could do this quickly.
If you want to do these for yourself, honestly, Googling it is really easily. For most properties you’re able to just Google it and they’ll give you the exact property tax number. Insurance is a little bit harder, but I just recommend Googling it. Google single family home property insurance in Memphis, Tennessee, and you’ll get a pretty accurate number. Before you actually go buy a deal, you need to get a quote and an actual number.
But when you’re at this phase where you’re looking at all these leads and you’re trying to analyze and whittle it down to the ones you’re actually going to offer on, doing these ballpark numbers are generally okay, at least that’s what I do. For repairs and maintenance, I’m going to do 5%. Again, this is new construction, so I don’t think repairs and maintenance are going to be really high. I like to put 5% for vacancy, 5% for capital expenditures.
If you don’t know what that means, CapEx capital expenditures is kind of like repairs and maintenance, but for big items like a new roof or a new boiler. And because this is new construction, you’re probably not going to need to do that anytime soon, but I still like to put money away for that because you’re going to need to do it one day, right? We’re talking about long-term holds here.
That’s the business model that works during a housing market correction, and so if you’re going to hold this property for five to seven years, something’s going to break, right? That’s just part of the business. You’re going to need a new hot water heater. That will definitely happen if you own it for 10 years. And so you better off just putting that money away right now and planning for that than getting stuck and not knowing what it is.
I don’t live in Memphis, so I’m planning for management fees of about 8%. And then since this is a single family home, when I get to this section about utilities, I’m putting in zero because my tenants are going to pay all this. I actually usually pay water and sewer, so I’m going to just put 25 bucks in there. I don’t like to buy places with HOAs, so I’m going to put zero.
Garbage, I’ll put zero and zero. Right? You guys can adjust this as you need. If you’re going to buy a place where you’re going to pay the utilities, you need to put those numbers in. And again, I recommend just Googling that for your area. If you are unfamiliar what a four bedroom house costs for electricity per month, you could just Google it. It’s honestly really easy. And then we’re done.
That was it. I mean, if I wasn’t just blabbering on here, I would’ve done that in probably two or three minutes. Because I’m trying to explain it, maybe it took five minutes. But let’s look at this deal. Okay. All right, this is a bad deal. This kind of happens with that, but I wanted to do this on purpose to show you. What we’re just looking at here in this deal is that it would net negative $90 per month and negative 3% cash on cash return.
So this is obviously not a deal I would buy as is. And I honestly, I kind of suspected this. New construction tends to not be great investments, so I was kind of curious. But I did this for a reason because as I was talking about, most deals that you analyze are not going to be good, but there are two things that you can do.
If it’s just a no-go, it’s a terrible deal, it’s never going to work, just forget about it. You can just move on. But if you see that there is potential, and I think there’s potential in this, what you can do with the bigger pockets calculator is meek your deal, right? There’s a common saying among investors that great deals aren’t found, they are made. And let me just show you what I mean.
I just made up a number that I was willing to, that I was willing to pay for it, but what if I bought well under asking price? Let’s say we went down to 137,000. What happens then? Okay, we’re still negative at 51% or 1.6%. That’s still not going to work for me obviously, and I don’t think the seller’s going to go well below that. Let’s just say 135. Maybe they would offer that, that’s still a negative cash on cash return. But obviously that’s not good enough for me.
So what I’m going to do instead is imagine that I can offer or negotiate a rate buy down. So remember I said there’s a very common thing going on right now where you negotiate with a seller for them to pay down your mortgage 2% for the first year. So let’s just say, I mean, let’s just say that I did it by 1%. What happens if I go down to 5.5%. Right? Does that mean that it goes positive?
Yes. Now it is $23 a month in cash flow and 75 and 0.75% cash on cash return. Probably still not good enough for me, so I’m going to see what happens if I get them to rate buy down by 2% for the first year. That would get me to 4.5%. That would give me an $85 a month cash flow and 2.71% ROI. Probably still not good enough for me. Right? But this is getting closer, so we’re getting closer.
So what would work for me? I think the last variable that really matters here is cash flow. Remember, these people who listed this said that they think that the cash flow could be 1430. I put in 1100, but I’m not really that sure. So what I would do in this scenario is I would say, “What cash flow do I need to get?” Here’s a good deal.
If I could get the rental income to 1265, I could earn $200 a month in cash flow, a 7% cash on cash return and I would be earning on an annualized basis 14% per year. That is well above what the stock market returns. Stock market returns eight to nine percent. This is even during a correction, even during market conditions where I’m forecasting almost no rent growth and almost no appreciation. I could still be well outperforming the stock market.
Will the seller accept this deal where I offer them 135 and they do a rate buy down? I don’t know. I need to still go out and call property managers and see if it’s realistic for me to get rent of 1265. But now that I’ve analyzed this deal, I know what a good deal looks like, right? I know, I’m not going to offer what they’re offering me. That’s not appropriate in this type of market.
What I’m going to do is go to them and say, “I know, I, as an investor, I’m an informed investor and I know the exact numbers that are make sense for me to buy this deal. Here’s what they are. I’m going to offer you 135. You need to do a rate buy down for two percentage points.” And then on your own you need to independently verify the rental income and see what you can actually earn.
There was a big range on the BiggerPockets calculator when I showed that. I’m going to jump back over that. You can see here that they offered, they said 1030 per month for the median rent. But one of the things I love about this rent estimator is it says that the confidence is low, right? So that’s not great, but it admits that it’s not very sure because there aren’t great comps.
So in this type of situation, you need to go independently verify that and figure that out. So that’s why I think this calculator is so valuable and you need to run all these deals is because go and make this offer. If they say no, what have you lost, right? You know the numbers that make sense for this particular deal. If it doesn’t work on this deal, go run another 10, another 20, another 30.
And you will find, I promise you, you will find a seller who is willing to negotiate with you in this market because that is the benefit of the correction. People are willing to negotiate. So hopefully that helps. I just want to show you some other things about the calculator while we’re here. When you come down here, you can see how much money you will make on this property over the long run.
And I think this is particularly important during a correction. If you’re going to hold for five or seven years, it’s super helpful to know how much money you’re going to make five to seven years from now. So for this example, you can see that in year five that you will probably make, if you sold it, you would make $37,000 in cash for an annualized return of over almost 15%, which is incredible.
If you held it for 10 years, you would make 87K. Remember, on a property like this, you’re probably only putting in $30,000, $40,000 and you’re making 87K. So you’re tripling your money in 10 years for an annualized return of nearly 13%, which is well above what the stock market returns. So that’s why the calculator is so helpful.
You can really see how this will impact your financial future and help you on your path to financial independence. The last thing I want to share with you here today is this share button, which is a super cool part of the BiggerPockets calculator.
So if you go up here and you want to can download a PDF, so when you go to the seller, right? This is super important in negotiations, when you go to a seller and you’re trying to negotiate with you, you need to show them that you know what you’re talking about, that you’re not just making up numbers, that you’re trying to bully them around or take advantage of them.
If you go to them and say, “Listen, I need an 8% cash on cash return.” And you show them this report that shows, look, the only way that I get a 10%, 8% cash on cash return is with these numbers. I need to give you 170, 35. I need you to pay down my mortgage and this is the rent that I’m going to need to get. So I need to verify that, that seller’s going to take you a lot more seriously because it shows that you’re not just making these numbers up, you’re not trying to low ball them. You’ve actually thought about this.
You’ve come up with a number that is thoughtful and meaningful for your investment and their property. And I think it’s super helpful. It’s also great for talking to lenders by the way, or if you want to get your spouse or partners on board. The share feature is really awesome. So this is one, just one of the reasons why I use the BiggerPockets calculator. All right. Now that we’ve done that, that let’s get back to our deck here and our webinar.
So I want to ask you, now that we’ve talked about all this amazing stuff, I want to ask you, do you feel more confident in understanding current market conditions? I hope you do because I’ve explained some of the fundamentals and hopefully you understand that this is an affordability issue and the housing market is in a correction due to that affordability issue. But that’s okay.
Do you now understand what business plans work best in this type of market? Do you understand that you should be buying deep, buying well below market value? Can you find creative financing solutions? Are you going to hold your property for long term? That’s what works in today’s market. Do you feel comfortable finding and analyzing deals? Do you know that you’re going to need to be patient? You’re going to need to analyze a lot of deals to find those nuggets of opportunity.
You’re going to find the sellers that are willing to negotiate or who understand the numbers that you’re going to put in front of them using a calculator report or your own spreadsheet. You need to, are you comfortable finding, analyzing and talking about those deals? I hope so. If you do, that is great.
That is the whole point of this webinar. That is why we are here. But information is not everything, right? Now you have the information, but what happens is you need to take action too. Right? Everyone loves information, learning about things, but what really separates people who succeed in real estate investing and the people who just learn about it but never actually take advantage and start pursuing that financial freedom is taking action.
And to me, the key to taking action is finding the support you need. Right? You need these tools, you need services, you need a great agent, you need great content and education to get you a toss the finish line. And so if this is you, listen, it’s not for everyone to invest in a market correction. I personally am doing it, everyone I know who’s an investor is doing it, but it’s not for everyone. I totally understand that.
But if you are one of the people who has seized the opportunity, is willing to do the work to find the great deals right now, then the next step, the next logical step for many of you might be to consider BiggerPockets Pro. It is something that I’ve worked on personally a lot. I’ve helped develop a lot of the tools in BiggerPockets Pro. Over the seven years I’ve worked here, I’ve put a lot of my own analytical skills into the calculator. I basically help build a lot of that rent estimator that you see there.
And I truly believe in it because BiggerPockets Pro is your one-stop shop. It really has every tool you need, a one-stop shop to start, scale and manage your entire portfolio. And if you’re new to this, I can’t even stress enough how helpful it is to have all the tools that thousands of investors, tens of thousands of investors have used to successfully build their portfolio. And I just want you to know it’s not just me saying this. I’ve worked here for seven years.
I’ve literally seen 50,000 or more people use BiggerPockets Pro to become successful in real estate investing, and that’s why Bigger Pockets Pro is so valuable and I believe in it so much. Let me just quickly tell you about what it actually does. So first and foremost, it helps you analyze investment properties. We just talked about this. I just showed you how useful the calculators are.
You can analyze deals on your own, you can use your own spreadsheet, but I have a master’s degree in business analytics and I don’t even use my own spreadsheets. There’s just too much margin for error. It takes too much time. When you need to analyze the volume of deals a real estate investor needs to analyze, using a calculator just makes a lot of sense. Hopefully you see that now.
The second thing is that rent estimator, honestly, it’s one of the hardest things for real estate investors is to figure out how much income they can generate from a property. And that’s the reason we created this rent estimator. You saw it in action and how useful that can be. The next thing is we have Pro exclusive content and videos so you can get curated videos, webinar replays. The webinars just like this, they are not available to everyone in perpetuity.
Instead, that you need to, all the knowledge that you need is locked in some of these webinars and some of the Pro exclusive content that we have. You get that from being at BiggerPockets Pro. We value that at over $1,500, but it’s included in the Pro membership, which as you’ll see is a lot cheaper than that. We have a workshop. A lot of people might even, if you’re bought in on buying in a market correction, maybe you don’t have a lot of money to invest right now.
That is totally normal, which is why we have a workshop for you if you go Pro, which is investing with No (and Low) Money Down, which is taught by Brandon Turner and David Greene. They have a nine part video series that you get completely for free at BiggerPockets Pro. We’re going to give out a Finding Deals masterclass, which is super important in this type of market.
Again, this kind of stuff sells on the open market for over a thousand dollars, but again, we’re giving it away for free. That’s a theme here. Right? We basically bundle all this really expensive useful stuff into Pro for one, really affordable and usable price. We also have the Pro Badge, which honestly I feel like is something people really underestimate, but it’s really valuable.
When you’re going out and building your network, finding an agent, looking for mentors in real estate, people want to know that you’re serious. And so many people have messaged me on Instagram or whatever and they’re like, “Hey, I’ve never done anything, but I really want you to teach me how to invest in real estate.” And I’m like, “Show me that you’ve put in a little bit of effort, that you’re committed to this process and I’m happy to help you.”
And the Pro Badge is something that really helps you out in the BiggerPockets community. If you’re a Pro and you ask a question in the forums, you are way more likely to get really thoughtful responses because people know that you’re bought in, more people are going to be interested in working with you.
And it’s really, really valuable to let people know that you’re a Pro. We also have landlord documents. So if you’ve never signed a lease before, don’t know how to do a pet addendum or any of the things that you need to do as a landlord, we have a lawyer approved lease documents in all 50 states. It’s super helpful.
I’ve use them in multiple states. And I know I have a lot of friends who use these leases. They’re really, really high quality. We also have negotiated with partners on your behalf with companies like Rent Ready so you get free property management software. I can’t, this is extremely expensive for most people, but you actually get free property management software from Rent Ready just for being a Pro member.
You get discounts on your AirDNA if you want to be a short-term rental. And you get discounts on CPA courses from Amanda Han. And you also even get free access to [inaudible 01:08:41], which helps you find off market deals. If you want to drive for dollars, you get that for free all for being BiggerPockets Pro. So those are just a couple of the incredible values.
We also have amazing boot camps that you can only join if you’re a free member. You can learn from experts like Ashley Kehr and Tyler Madden, Avery Carl, Craig Curelop, all these incredible people have these boot camps where you can get really focused information about a specific topic and that is only available for Pro members.
So those are some of the features. But at the end of the day, all these features are amazing, but the number one reason you should consider Pro, it’s not any of these one individual features. It’s because it works. As I’ve said, thousands, tens of thousands of people have used BiggerPockets Pro to become financially free and to purchase real estate, unlock that power of real estate.
It really does work. I’ll just read you a quote from Aaron who said, “The BiggerPockets calculators are my go-to for analyzing property potential properties. There’s no way I could analyze the volume of properties I do without being a Pro member. I locked up my first free unit almost a year ago and now I’m selling it for almost a 70K profit that will go towards something larger.
The BiggerPockets calculators were a huge factor in making sure my numbers were right.” I love that because it’s all about, listen, he said, he’s talking about analyzing a lot of deals. That’s really important right now. And knowing that your numbers are right, those are two essential components to investing during a correction.
And so the calculators in Pro can help you with that. Patrick says, “Back in June, I attended one of the webinars right afterwards I signed up for Pro. In the next couple of weeks I analyzed a lot of deals. Eventually I found a fourplex. I got it under contract three weeks later after signing up for Pro. And a week later closed on another property that was six units.
Big thank you to you and the entire team. Final quick tip, sign up for Pro Annual. I made my money back at the closing table.” Well, I think that’s incredible advice. And I just want you to know that making your money back on Pro is honestly pretty easy. You’re probably wondering how much all of these tools and benefits cost, you know what it is? $390, right? You’re probably used to seeing courses in real estate that are thousands of dollars.
Hell, if you even bought an inspection on a single house, it’s going to be double the price of this. This is less than a home inspection. $390 is normally what Pro annual costs. It is a fraction of the price of if you acquired all these tools and services together would cost you literally thousands and thousands and thousands of dollar. But we offer it for 390.
But just for being here, for being a part of this webinar, I told you we have a couple of giveaways and I’m going to show you the first one. The first one is 20% off Pro. If you use the code, INVEST23. When you check out right now, just use the code, INVEST23, you will get 20% off and you’ll actually pay just $312, which is even cheaper. And I told you at the beginning that I had a bonus giveaway for everyone listening to this.
I’ve never given this away before. But if you go Pro in the next few days and use that code, INVEST23, you’ll get the ultimate package for my book, Real Estate by the Numbers, which is all about how to invest like a Pro, how to analyze deals like an expert. We went through the calculator. If you want to understand every single detail of how the calculator works, how to analyze deals for yourself, I think my book does a really good job.
Obviously, I’m biased because I wrote this book, but you’ll get the Ultimate Bundle, which means you’ll get a physical copy of it, you’ll get a Kindle copy of it, you’ll get an audio copy and all the bonus content. The bonus contact comes with additional calculators that you can use and resources to help analyze deals in these types of markets. So if you’re interested in BiggerPockets Pro and getting all these bonuses, which are valued well over $2,000, go to biggerpockets.com/pro right now.
Use the code in INVEST23. You’ll get all these bonuses, you’ll get my book and a year’s worth of the tools that you need to pursue financial independence and to find great deals even in these market conditions. Now if you’re already Pro, you can still get some of these bonuses, go to biggerpockets.com/pro/videos and you can find some of this bonus content there.
And the last thing I just want to say about this is listen, we know that it is concerning that you, not everyone is going to be ready to buy in these types of market conditions, but I’m just going to encourage you to go try. Go find a bunch of leads, analyze a bunch of deals, go Pro right now, and if it doesn’t work out, if you’re not ready to buy a deal, we’ll give you your money back. There is a 100% money back guaranteed for 30 days. So do it. Go Pro right now. If you’re at least even considering this, go find an agent, talk to, look at a bunch of deals and start analyzing them.
And I think for a lot of you, you’re going to realize that this isn’t that hard, that you’re going to find deals that are going to vastly, incredibly, life-changing, improve your financial position. But if you don’t, that’s okay. We don’t want to take your money if you’re not actually investing in real estate. So we will give your money back a 100% refund, no questions asked.
So I’ll leave you with these parting words. Jim Rohn, incredible person said, if you really want to do something, you’ll find a way. If you don’t, you’ll find an excuse. So if you’re bought it, if you want to eliminate some of that economic anxiety, if you want to find the financial freedom that has changed my life and changed tens of thousands of life through real estate, go do something.
Take action right now. If not, you’ll find an excuse. So I hope this helps you. I hope you helps you see that there are great opportunities buying real estate right now and helps you pursue some of the deals that I’m, the types of deals that I’m doing and a lot of my friends who are experienced investors are doing. If you want to go Pro, again, go to biggerpockets.com/pro and enter the code INVEST 23.
Thank you all so much for listening. Again, if you have questions about this, you can always hit me up on the BiggerPockets website or on Instagram where I’m @thedatadeli. Thanks again everyone. I’ll see you next time. All right. Well, that was my webinar. I hope you all learned a lot. Thank you all for listening. My main hope here is that you understand that you can invest in really any sort of market condition.
It’s really just about using the right strategies and tactics and then going out and finding and analyzing the right kind of deals so you can proceed with confidence. If that’s for you, if you are ready to go ahead and start investing in this type of climate, I recommend that you do so and you can use the BiggerPockets Pro suite of tools to get a jumpstart on your investing.
We have everything that you need from deal analysis calculators, landlord forums, property management software. And you can get 20% off. You can go to biggerpockets.com/pro. Just use the code, INVEST23. That’s biggerpockets.com/pro and use the code INVEST23 for 20% off. It also comes with a free copy of my book Real Estate by the Numbers, which teaches you how to analyze deals like a Pro, very topical and today’s environment.
So definitely take advantage of that if you are considering going Pro. Thank you all so much for listening to this webinar slash podcast. I really appreciate your time. If you have any questions about the content that we covered today or anything else at all, you can always hit me up on BiggerPockets or on Instagram where I am @thedatadeli. Thanks again. I’ll see you next time.