\n<\/p>\n
Want to become a millionaire<\/a>? After this episode, you\u2019ll have everything you need to start your journey to a seven-figure net worth through real estate investing<\/strong>. Most people think that to become a millionaire you need to have a high-paying job, a large inheritance, or hundreds of rental properties. This couldn\u2019t be further from the truth, as regular real estate investing allows almost anyone to build wealth<\/strong>, attain financial freedom<\/strong>, and live the life they dream of in only a matter of years.<\/p>\n For those who haven\u2019t bought their first investment property<\/strong><\/a>, or only have a few, this webinar with Dave Meyer <\/strong>will provide the step-by-step system<\/strong> that\u2019ll take you from onlooker to investor. Dave takes you through the math behind making millions, how to find investment properties<\/strong> worth buying, analyzing real estate <\/strong>in just minutes, and finally, how to repeat the system so you can continuously build wealth<\/strong><\/a> no matter what life position you\u2019re in.<\/p>\n Stick around until the end as Dave throws in a special gift for our viewers<\/strong> that will help take you from rookie to veteran investor in no time at all. The tools, information, and data found in this episode could help slingshot your wealth to levels you\u2019ve never imagined. So, are you ready to start?<\/p>\n Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Dave: \u00a0<\/p>\n \u00a0<\/p>\n<\/div>\n Interested in learning more about today\u2019s sponsors or becoming a BiggerPockets partner yourself? Check out our\u00a0<\/i>sponsor page<\/a><\/i>!<\/i><\/p>\n Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n
This is Real Estate Rookie Episode 215. My name is Ashley Kehr, and I am here with my co-host, Tony Robinson.<\/p>\n
And welcome to Real Estate Rookie Podcast where every week, twice a week, we bring you the inspiration, information, and stories you need to hear to kick start your investing journey. Now, I usually like to start the episodes with a quick shout out from folks who have left us a review. And this week\u2019s review, five star review, comes from Solitaire Phantom Maniac. And this person says, \u201cI love this podcast because I learned so much while I\u2019m working. I\u2019m really hoping to use these lessons soon to start my own real estate journey.\u201d And that\u2019s why we do this podcast, to help people, to inspire them. So if you are listening, if you\u2019ve enjoyed, please you leave us an honest rating and review on whatever podcast platform it is that you\u2019re listening to.
So with that out of the way, Ashley Kehr, what\u2019s up? What\u2019s new in your world?<\/p>\n
I don\u2019t know and how much. My son\u2019s been playing football. So my Saturdays are now consumed with football. And it\u2019s actually been fun. So I\u2019m enjoying that element.
So today, I went to an apartment where the person had been evicted. They actually went to prison in April and it is now the end of August. And so they actually received a full rent payment from the county, so we received direct deposit payments from the county every single month on their behalf.<\/p>\n
Even while they were in jail?<\/p>\n
Well, it stopped the month after So May, it stopped May was their last payment. So June, July, August, we didn\u2019t receive payment. The eviction went through everything. The marshals came. Obviously, no one\u2019s been there. So the apartment\u2019s been considered abandoned. And no contact with this person at all. They\u2019ve had no contact with the property management company, anything like that. So the lockout was done, we held their contents. And now, it\u2019s time to get rid of everything.
So Darryl and I went through the property and it is just disaster. The one bedroom, you can\u2019t even walk in there unless you\u2019re walking on six inches to a foot of just stuff on the floor. So Darryl and I made the best of our time there while we\u2019re waiting for the junk removal company to come and we made about 10 Instagram reels. So I\u2019m going to release those slowly throughout the next week. So if you guys want some entertainment on what a destroyed trashed apartment looks like, head over to my Instagram @wealthfromrentals.<\/p>\n
Yeah, saw that first one you posted today. I got a good laugh out of that one.<\/p>\n
Yeah. I tried to make it humorous as much as the situation is unfortunate. But, yeah.<\/p>\n
With me, nothing else too crazy happening either. I mean, we\u2019ve got a bunch of projects in motion. We literally just yesterday wrapped up our last rehab. So now, we\u2019re just waiting on a safety inspection for this new one. So hopefully, that\u2019ll be another successful property for us. But just putting one foot in front of the other and trying to keep growing, keep things moving.<\/p>\n
Well, I think today, we have a great podcast for that. It\u2019s basically about, keep going to become a millionaire. So how to become a millionaire and what those steps look like. And I think it can seem like daunting to get to whatever that next step is for you. So this is going to be a great webinar for you guys to listen to if that is your next goal to become a millionaire. And you guys are in for a treat today.
We have Dave Meyer, who is going to be taking over this podcast episode. So Tony and I get to sit back and relax. You don\u2019t have to listen to Tony\u2019s boring monotone voice or hear me laugh throughout the whole episode. So I\u2019m excited for you guys to be able to enjoy yourselves, relax, and learn a lot.<\/p>\n
And Dave is like literally \u2026 If you guys don\u2019t know Dave, he\u2019s the host of the On the Market Podcast. He\u2019s also the VP of data and something.<\/p>\n
And analytics.<\/p>\n
And analytics at BiggerPockets. But Dave is also literally one of the smartest people that I know in the world of real estate investing. So if you want to get some really good information about how to be successful, take notes, enjoy this content, because it\u2019s coming from a super, super intelligent guy.<\/p>\n
So before we bring Dave on to the show, let\u2019s hear a word from our show sponsor.<\/p>\n
Hey, what\u2019s going on, everyone? My name is Dave Meyer. I am going to be your host for today\u2019s webinar, where we\u2019re going to be talking about how to become a real estate millionaire. And if you\u2019re sitting there wondering if this is for me, the answer is yes because this includes becoming a real estate millionaire is possible for anyone. And that means if you have no money, if you have no experience, you don\u2019t have a network full of high net worth people. This is true for anyone. I genuinely, genuinely believe that anyone who really wants to achieve financial freedom to become a millionaire can do so through real estate investing.
I know that because I\u2019ve done it and I\u2019ve seen hundreds, if not, I\u2019ve seen thousands of people accomplish this by following the same systems and processes that I\u2019m going to teach you today. So I want you all to pay close attention to what we\u2019re talking about today because these really are the things that establish successful real estate investors\u2019 use. And as you\u2019ll see over the course of this webinar, it\u2019s really all about systems and processes. And basically following the path and following the things that other real estate investors have already done.
And I\u2019m going to teach most of what you need to know to get on that path to being a real estate millionaire by the end of the next hour. So please pay attention. Super glad you\u2019re here. And with that, let\u2019s get into it.
I want to first just start by telling you a little bit story about myself and my own personal journey to real estate investing financial freedom. This is a restaurant and it\u2019s called the Cherry Creek Grill. I worked there when I graduated college in 2009. And at that time, I was living paycheck to paycheck. I mean, not even, I guess it was like day to day because it was just the tips I took home every day. All the money I had, literally all the money I had, was in cash in my bedside table. And I didn\u2019t really know what I wanted to do with my life. And I wasn\u2019t spending time the way I wanted to. I wasn\u2019t feeling fulfilled.
And not shortly after that, I got introduced to real estate investing. And fast forward 12 or 13 years later, now I am financially free. I get to live in Europe. I travel. I have my dream job working at BiggerPockets where I get to host a podcast, I get to talk to all of you about investing in real estate. And, yeah, I am a real estate millionaire. And that is wonderful, don\u2019t get me wrong. But to me, it has always been about time affluence, about being able to spend my time and my life doing the things I genuinely care about, about the things I love with the people I love. And real estate investing has given me that and it\u2019s an incredible gift. It is something that I am so tremendously grateful for. It\u2019s something I\u2019ve worked very hard to attain. But it\u2019s not like I was out there on my own doing this making things up.
I followed a system and path that many others have followed. And that\u2019s what we\u2019re here to talk about today. And I genuinely mean this. If I could go from waiting tables 12 years ago to being a real estate millionaire, I promise you, so can you. This is not \u2026 I\u2019m not special in any way at all. I don\u2019t have any skills that you don\u2019t possess. This is something that anyone could do and I really want to help you get there, and it\u2019s something I\u2019m extremely passionate and excited about.
And like I said, it\u2019s not just me, you can see that other BiggerPockets members have become millionaires by following these same steps, too. Check this out from Kurt. He said, \u201cI bought one duplex in 2003, house hacked it, realized it was awesome, continue to slowly accumulate duplexes over the years, went from negative net worth, negative net worth, to multimillion over the next 17 years from CAP appreciation, reinvesting rates, cashing out equity. Quit job, retired in 2012.\u201d That\u2019s amazing. You can also see Sergio, started with a triplex, just a triplex in 2012 on W-2 savings. Got another one, got another one, and now has a net worth of over $1 million in real estate alone. It\u2019s incredible.
And Mario says he read Rich Dad Poor Dad, that\u2019s how a lot of us got started, right, and decided to start small. Bought his first house in 2011 with FHA financing, only put 3.5% down. Check that out. So everyone who\u2019s thinking you need 20% down to get started, not necessarily true. He was scared as hell like we all are, but made it work. And then I decided to get a bit aggressive, bought a couple more units. And now, he has a net worth of over $2 million in equity alone, operates several profitable businesses and generates over $750,000 a year. And I love what Mario ends this on because that\u2019s why I put this in here. The most important part is still in love with every minute of it, right? Because, of course, we all want to get that amount of money, we want to become millionaires because it feels secure, right, and it gives us that time.
But it\u2019s fun to become a real estate investor. And it allows you so much freedom to do the things that you love. So again, I\u2019m super excited to teach you these systems. We\u2019re going to get into all of that today. But first, I do want to address the elephant in the room because I know a lot of my job here at BiggerPockets is studying the housing market. And when I do that, I recognize that there are some scary things out there in the economy right now. I mean, let\u2019s just talk about it. Recession, people are talking about interest rates have gone up a lot over where they were during the pandemic, and there are super high prices on houses. And all these things are true. That does make it a little less obvious, I would say, how to get into real estate investing.
But let me tell you something, every single, experienced investor I know, and I really mean this, every single investor I know is still buying right now. And that is why \u2026 And I know that seems counterintuitive because there are people on YouTube or on social media are saying, \u201cThe housing market is going to crash, I\u2019m selling everything.\u201d That\u2019s a lot of hysteria. The people who actually are real estate investors and who do this for a living are all buying and active right now because they know, like I know, and like you will know, is that you can make money in every type of market. Doesn\u2019t matter if the market\u2019s going up, if the market is going down. There are always opportunities. And yes, you do need to change your strategy a little bit and you have to be disciplined in this type of market. You can\u2019t just go out there and buy anything.
But if you know how to buy the right properties, in a down market, it\u2019s actually a great time to buy because sellers are more motivated, people are on the sidelines, they are scared, there is less competition. And so there are great opportunities to buy right now, as long as you learn how to identify the right properties. If you can run the numbers and be confident in what you\u2019re buying, you can buy in any type of market. And I genuinely believe that. I\u2019ve done several deals already this year. I\u2019m doing due diligence on two more right now. And so this is true of everyone I talked to, and I just want you to not be discouraged and say that you\u2019re going to get out of real estate investing before you ever get in because that\u2019s just what happens with people is they think there\u2019s all these barriers and they construct these barriers in their head, but that\u2019s not necessarily true.
You can find good deals right now. I\u2019m 100% sure of that. I\u2019m going to teach you how to do that today. So just keep that in mind that in every market, there are opportunities. Which opportunities you find might change, but there are always opportunities. And by the end of this webinar, you\u2019re going to learn how to do this. You\u2019re going to have the tactics, the strategies, and tools needed to become a real estate millionaire. And that\u2019s even if you\u2019re brand new to real estate, like I said. That is even if you\u2019re starting with zero money, that\u2019s what I did, and it\u2019s even if you live in expensive and competitive market, which is pretty much every market right now, they\u2019re all expensive and competitive. Well, not all, but a lot of them are expensive and competitive. And we\u2019re going to talk about still how to find great deals in that type of market.
Today\u2019s agenda is going to be first following this simple four-step strategy called LAPS. This is what almost every real estate investor I know uses to find great deals. We\u2019re going to talk about how to get crystal clear on the best property for you, so that when you analyze a deal and you get the numbers you want, you know exactly when to execute and you can jump in. Third, we\u2019re going to talk about how to finance real estate investing because I know a lot of people are probably thinking, \u201cI don\u2019t have money.\u201d That\u2019s how I started. I thought \u2026 I literally had no money for a down payment. I had never applied for a loan before. But you can figure out how to do this, millions of people have, and I\u2019m going to show you how to do that today.
Then we\u2019re going to talk about how to analyze deals, which if you know anything about me, I\u2019m a data and numbers guy at heart. And so I\u2019m excited to talk about analyzing deals because I think, personally, that\u2019s the most important part of learning how to be a real estate investor is running the numbers. So we\u2019re going to go deep into that. And then we\u2019re going to talk about BiggerPockets Pro and how we here at BiggerPockets have built tools to help you become a real estate millionaire.
All right. So I\u2019ve talked a little bit about this at the beginning. And the reason I\u2019m talking about this is I want to talk about your why, basically, why you\u2019re doing this because a lot of people when I develop these webinars and I say millionaire, maybe people think about these kinds of things, right? Like going out on your yacht, or buying a Ferrari, or a Lambo, or going shopping. And you could do all that. If that\u2019s you, go for it. But for me, that\u2019s not what [inaudible 00:14:09] has been about. To me, it\u2019s about traveling the world. I get to live in Europe right now. That\u2019s awesome. I get to spend time with my family. And maybe if you have kids, you can watch your kids grow up and spend more time with your siblings or your nephews or your parents. You can take them on adventures. You can help them see the world and explore and empower them to do the things that they want to do.
It\u2019s really about being able to do what you want, when you want. At the end of the day, it\u2019s about time freedom for me. And I keep talking about this at the beginning because real estate investing, it\u2019s not complicated, but there are going to be times where it gets hard, where you have to figure something out. And for me, that why has always been what continues to motivate me. The money is great, but I love to daydream about traveling or spending time with friends and doing something amazing and feeling like my life is purposeful and valuable. And that\u2019s what has always made me feel excited.
And so today, we will talk about how to make that dollar number in your bank account read $1 million. But I also want you to think about why do you want that million dollars. Why are you going to work hard for the next couple of years to take action and pursue this? Because, really, that\u2019s what it takes, it takes action and consistent action. And there will be times when you\u2019re feeling a little lazy or not motivated, it happens to everyone, and having that why crystal clear in your head is going to help you.
BiggerPockets. If you want to know why you should be listening to me, I just want to \u2026 And you\u2019re not familiar with BiggerPockets, I want you to know that BiggerPockets has been around for 17 years now. We have over 2 million members, big podcast, and we have helped literally tens of thousands, if not, hundreds of thousands of people become real estate millionaires. And the reason we\u2019ve done this is because we have very firm beliefs. And here\u2019s what they are.
Real estate investing is the greatest tool. This is what we believe, that real estate investing is the greatest tool on the planet for the average person to build wealth and passive income. Now, we also believe that it\u2019s not a get-rich-quick scheme. And that\u2019s what I was just talking about. This is going to take years of hard work. It\u2019s not crazy. It\u2019s hard being broke, right? It\u2019s a lot easier to be working towards something that\u2019s going to make your life better in the future. But if you think \u2026 If you\u2019re here to make a quick buck, real estate investing is probably not for you. There are probably other, I mean, really high-risk ways to do that. But real estate investing is a much more safe, proven, consistent, slow build kind of thing.
For me, it took about nine years to get to financial freedom. And I actually went slower than most people. But at BiggerPockets, we really believe in all of these things that you see on your screen here that anyone can do it, it\u2019s just about consistent action and a long-term perspective. For me, just so you know who\u2019s talking to you and why I\u2019m qualified to lead this webinar, my name is Dave Meyer. I\u2019ve been a real estate investor for 12 years, like I said. And my full-time job, I work because I like my job, I love my job, is as the vice president of data and analytics here at BiggerPockets. I mostly invest in rental properties. Since I moved to Europe about three years ago, I do a lot of passive investing. I invest in syndications. So these are large multifamily, complexes, value add kind of things.
I also have the great pleasure of hosting On the Market. It\u2019s a podcast talking about what\u2019s going on in the world of investing. We talk a lot about the housing market. We talk about interest rates, businesses, everything you need to know to make informed investing decisions. So if you are into that kind of thing, check out that podcast. I have a book coming out this fall all about deal analysis. And just like you, I was once a newbie. I had no money, I had no experience, and I still figured it out, thanks to BiggerPockets and countless other real estate investors who showed me the path. And now, I get to pass that along and to give back to this community. And that\u2019s why I\u2019m here leading this webinar today.
If you do want to connect with me after this, you can do that best on Instagram. I am @thedatadeli because I love sandwiches and just generally any kind of food.
All right. With all of that, hopefully, I\u2019ve given you a good introduction about why you\u2019re here, why you should be paying attention to me and to this topic. And now, let\u2019s get into the meat of this thing. The funny thing about becoming a real estate investor and hopefully becoming a millionaire through it is that it\u2019s actually boring. It\u2019s not like all glitz and glamor. There\u2019s really not that much to it. It is a time-tested system, right? And I\u2019m going to show you a little bit about it. Here\u2019s the math behind it. You \u2026 I guess this isn\u2019t math, these are the steps and then I\u2019ll show you the math in just a second.
But first things first, you buy a property with a loan, right? That\u2019s what everyone does. You go out, you find a great deal, we\u2019re going to talk about that, then you get a loan. Then over time, you pay off that loan. And the great thing about real estate investing, unlike buying your primary residence, is you\u2019re not actually paying it off with your money. You\u2019re paying it off with rent. You\u2019re paying it off with \u2026 Someone else is paying off your loan over time. Hopefully, your property goes up in value over time. We\u2019ve seen that like crazy over the last few years. But even if it goes back to the average, which is what I think is going to happen of about 3%, your property value does go up over time. And if you do this with multiple properties, you\u2019re going to become a millionaire. It is really that simple.
Let me give you some simple examples here. First, take this chart here. When you buy a house and you put 20% down, let\u2019s just use really simple numbers and say that you\u2019re going to buy a house that\u2019s worth 100,000. And you\u2019re going to have a loan that\u2019s worth 80,000, right, because you put 20% down, that\u2019s 20k in this scenario. And you have a loan for 80,000. Then over time \u2026 So you have 20,000 in equity, right, that\u2019s your down payment. Over time, two things happen here. First, the value of your property, that\u2019s that green line, starts to go up. That\u2019s your net worth. But at the same time, because like I said, you are paying down that loan, the amount you owe on that loan has gone down.
So in this graph, we see that our value of our property went from 100,000 to 105,000. And the amount we still owe the bank went from 80,000 down to 70,000. So instead of having just $20,000 in equity, now we have $35,000 in equity. That\u2019s pretty good, right? I mean, I haven\u2019t put yours on here, but that just happens over time, right? Then it keeps going. We owe the bank less, the property is worth more. We do it again. We do it again. We do it again. And the spread, how far apart these two lines get, that is your net worth. That is how much money you have, right?
So now that your property is worth \u2026 Let\u2019s just keep going. Now that it\u2019s worth 135, 140, 145, once you get to 145,000 and you owe the bank only 65, let\u2019s do some quick math, now your equity in that property is $80,000. So this isn\u2019t even including cash flow, right? You went from $20,000 in equity to $80,000 in equity just by buying a property with a traditional mortgage and holding it over time. That is why investing in real estate, specifically rental properties, can make you a millionaire so easily.
Let me just give you an example, right? I bought this single-family home a couple of years ago. I put 20% down when I did and I bought it for about 400,000. So my equity was 80,000. Now, just a couple of years later, I\u2019m making $800 a month in cash flow. And I have $140,000 in equity. So that\u2019s $60,000 in additional equity. That\u2019s an example of a single family. I also did it with this triplex here. So we have this triplex that I bought a couple of years ago. Originally, it was about 650 grand, I think. So that\u2019s probably about 120 in equity, now 220 in equity, so over $100,000 in equity gained off this all while I\u2019m making $2,500 a month. Sounds pretty good, right? So just between these two properties, I have a couple 100 grand in equity and I think over $3,000 a month in cash up.
What about this? Short-term rental. You can do it with short-term rentals as well. I bought this short-term rental three years ago maybe. This one\u2019s done incredibly well for me. I\u2019m making about 1,500 bucks a month. And I think I\u2019ve gained, this is a conservative estimate, at least 100 grand in equity, maybe 150 on top of what I put down. So I hope you can see that this isn\u2019t anyone\u2019s strategy. You can do this with small multifamilies. You can do it with single families. You can do it with short-term rentals. And I\u2019m including my cash flow here. But that chart I showed you before doesn\u2019t even include cash flow.
The way to build long-term wealth to get to that million dollar number, in my opinion, is not through cash flow. You do want cash flow, that is also important, but that millionaire number is going to come from building equity in your property over time. The truth is, it doesn\u2019t take that many properties to become a real estate millionaire. I just showed you three properties, three random properties I own, that\u2019s probably about halfway there, right? I just bought three properties, I\u2019m generating almost all of my monthly expenses in income from those three properties and have made almost half a million dollars off those three properties. And that\u2019s just the truth is that it doesn\u2019t take that many properties, it just takes the right ones. You have to be able to identify the properties that are going to go up in value, that are going to provide consistent cash flow and are not going to cause you a million headaches because at least, for me, that is a big deal. I don\u2019t want to have a lot of headaches.
So in addition \u2026 I should have mentioned. In addition to buying the right ones, not headaches, and it\u2019s just time, right? Just buy good properties and wait. It\u2019s \u2026 People say this all the time. Don\u2019t wait to buy real estate, buy real estate and wait. Dennis, I love that saying because it\u2019s so true. People get so concerned about the market fluctuating, but over 10 years, over 20 years, your property\u2019s going to go off, you\u2019re going to pay off your loan and you\u2019re going to be a millionaire. It\u2019s almost guaranteed.
So if you look at this, going back to this, it\u2019s a perfect example that I was showing you earlier one example of one property at a time, right, but think of this at a portfolio because you don\u2019t become a millionaire of one property, you become a millionaire by assembling a portfolio over time. And so this is just random numbers here. But if you bought $2.6 million worth of real estate, which sounds like a lot, right, but that\u2019s maybe five properties worth $500,000. And you would only need to put down $800,000 for that. And again, that sounds like a lot of money. But we\u2019re going to talk about how to get that money in just a little bit. And over time, you went from having 800,000 equity. Remember, it\u2019s 2.6 minus 1.8, that\u2019s 800,000 to having $3.5 million in equity, and you are well into being a millionaire.
So that is how \u2026 That\u2019s where you need to get to and to start thinking about is just buying good properties, holding them over time, you will become a millionaire, it\u2019s pretty much guaranteed. So \u2026 Oh, I got ahead of myself, you can see here 3.5 million less closing costs, that\u2019s about your equity. So just think about it this way, right? Think about it like a stack. You don\u2019t need to do this all at once. You just start with one property. It could be a single family home, it could be short-term rental, or I started by getting a small multifamily. I bought a quadplex first. And that\u2019s honestly before I really knew what I was doing, it was just the best deal that I found. I would have bought a single family. Short-term rentals weren\u2019t a big thing when I first started, but I started with a quadplex, but I still buy all three of those things.
Then maybe in the next year, you buy two properties, or maybe it\u2019s even two units, doesn\u2019t even need to be two separate properties, you buy duplex. Then buy a quadplex or four units or whatever. Then eight and then 16. And that\u2019s it, right? Then you\u2019re a millionaire. And it\u2019s not that hard. You can actually do this one per year and become a millionaire in probably five to 10 years. So buy one single family, I\u2019ll just go in reverse, right? You buy one single family, buy a duplex, buy a triplex, maybe buy two quadplexes and then buy a small commercial property with 16 units, five years, one deal a year. You can do that.
I know thousands of people who do this. I\u2019ve done it. You can absolutely do it. It\u2019s not that intimidating. So don\u2019t think about, \u201cHow do I get to 100 units?\u201d And on the podcast and social media, you hear these people who have thousands of units and it can be intimidating. I understand that. But you don\u2019t need to think about them. Just think about this. It\u2019s so much easier. Just be, \u201cWhat\u2019s my first deal? I\u2019m just going to buy a deal, buy a deal and wait.\u201d Next year, what are you going to do? I\u2019m going to buy a duplex and wait. The next year after that, I\u2019m going to buy four units and wait. And I\u2019m going to buy eight and wait. Like I said, it\u2019s boring. I know this is boring, but it is true. That is how it\u2019s done.
The key here is really being able to find good deals. So \u2026 And I know that\u2019s what a lot of people are at. So hopefully, you understand the stack. Hopefully, you understand it\u2019s about buying good properties over time. Now, let\u2019s talk about how to find good deals. And we call this here the crystal clear criteria, Triple C, or you might hear this often referred to as a buy box. I like to call it the buy box as well. It\u2019s basically identifying the criteria that you want to see in a property because we\u2019re going to talk about the systems you need. And the systems require you to see a lot of deals, analyze a few deals, and then being able to execute on them when you find the ones you want.
And so the first step in that process is to find that what do you want. So first thing here is location. Location, something I talk a lot about on the podcast, this can be within your own town, it can be in your own sub market. I really recommend you try to pick two to three different markets that you\u2019re interested in. You can read some of my writing on the blog about different markets that I like. But you can really do it almost anywhere. You can go find a start at a broad level. So I mostly invest in Denver. So let\u2019s say I pick Denver and then I want to find a couple sub markets. Go drive around and find areas that you think are really good, that have good potential to appreciate, that have good quality of life. People are moving there, there\u2019s good jobs, those are the things I really like to look at.
Economic growth and job growth, super, super important and population growth. If I had to narrow down to two things I care about when I\u2019m talking about location, those are the things, economic growth, usually measured as job growth, and population growth. Those are super important. You can check out more of my writing about location somewhere else on BiggerPockets to talk about this a lot.
Next, property type. Do you want to buy a short-term rental? Cool. Do you want to buy a small multifamily? I recommend it, I really like them. But I also buy single families because in Denver, there aren\u2019t that many great single families and they\u2019re really high demand so they get excellent rent. So I buy those two. But you can decide, especially if it\u2019s your first deal, I recommend you just focus on one property type. And that can be small, I would say either a small multifamily, two to four units, or a single family are probably the best if you\u2019re just getting into this.
Next, condition. And listen, if you are experienced and you want to do BRRRR, you can buy some properties that need work. But if you\u2019re new, again, I recommend buying something that\u2019s not a lot of complicated work. You don\u2019t want foundation issues. You don\u2019t want to buy a new roof. If you can do some cosmetic work, I recommend that for your first deal.
Now, if you\u2019ve done two or three deals and you\u2019re ready to scale, then doing value add can be really great. And when I say value add, I mean buying a property that needs work, renovation, add a new bathroom, fix up some of the tile, whatever. That can really add to your net worth quickly. And so I do recommend that for people, but not necessarily on your first one. If it\u2019s your first one and maybe you have a background in renovation or construction or design, maybe you\u2019re ready for that. But you don\u2019t need to do that stuff if you are brand new, you can find a deal and properties that are already in pretty decent condition.
Next, set your price range. And we\u2019ll talk about this a little bit. But if you want to buy with your own equity, then you might want to just estimate what 20% down would be or what you think a good price range is in your neighborhood. Maybe you think that there\u2019s a lot of demand for homes that are in the $300,000 to $400,000 price range. And that\u2019s going to be your price range. But generally speaking, if you had $80,000 to invest and you divide that by 20%, that would give you your estimated price range, which would be about $400,000. So you take 80,000 divided by 20,000, that would allow you to at least get your traditional mortgage.
Last is profitability. Think about what you care about. For me, I am usually willing to accept a lower cash on cash return, maybe 5% or 6%. If I think it\u2019s in a neighborhood that\u2019s going to appreciate a lot, because for me, I want that spread that we were just showing to keep going up and up and up, I still work full time. So cash flow is not as important to me. I want to see my net worth grow as quickly as possible. But for other people, it could be different. So you might prefer to have more cash flow. And usually, that comes at an expense of appreciation. That\u2019s not always true. You can find ones that are good, but think about in your head what\u2019s most important to you.
And if you \u2026 You can read about this and think about this. But over the next couple of days, let\u2019s say in the next week, I want you to think about where you\u2019re going to buy, what type of property you\u2019re going to buy, and what your price range is. And that is going to help you understand because if you know, \u201cHey, I want a single family in Denver, I want it to be at least in pretty good shape where I don\u2019t have to do a heavy renovation, my price range is 500,000. And I want at least an 8% cash on cash return.\u201d That\u2019s the level of specificity I want you to have so that you know where you\u2019re going to buy, what you\u2019re going to buy, and what return you\u2019re looking for because then the systems I\u2019m about to show you are going to help you a lot.
It\u2019s going to help you analyze deals. And when you find \u2026 Because when we learn how to analyze deals in a couple of minutes, and you get all those numbers, then you\u2019re ready to go, then there\u2019s no questions about what\u2019s going on in the market, is there a better deal out there, because your buy box and your crystal clear criteria are already set. And then there\u2019s a match, right? You\u2019re like, \u201cThis is what I want. The deal calculator tells me that I have it, it\u2019s time to jump in and buy that deal right now.\u201d
And I want you to remember, especially if this is your first deal that you want to set these criteria, but don\u2019t be so ambitious, right? You don\u2019t say, \u201cI want a 15% cash on cash return.\u201d You\u2019re not going to get that. If you even get a 5% cash on cash return, I would argue that that\u2019s a good deal because what else are you doing with your money? As long as it\u2019s improving your financial situation, I\u2019d still think getting your first deal is all about momentum. It isn\u2019t that you\u2019re not going to hit a homerun on every deal. You don\u2019t need this to be the best deal you ever do. What you needed to do is, one, improve your financial situation. So is it going to get you cash flow? Is it going to help your net worth? Great, because what it\u2019s really going to do is start that stack and start building and teaching you how to get those next five or 10 deals that are going to get you to the financial freedom that you really care about and that you really want.
I love this quote, it\u2019s more important that you decide than what you decide. And so that\u2019s why I want you to think about this criteria is it\u2019s not like you have to get the perfect thing and pick the perfect neighborhood and the exact right return. It\u2019s all about picking so that you\u2019re ready to act. It\u2019s not about making sure that you have the best deal of anyone ever. That\u2019s not going to happen. You\u2019re new to this. It\u2019s about knowing what\u2019s good enough so that you can get started and jump into this.
Another way of putting this, I love this quote, is more is lost from indecision than the wrong decision. I absolutely love it. It\u2019s so true, right? It\u2019s like you just sit around and can\u2019t decide and you wind up doing nothing forever. Well, you\u2019re not going to make a wrong decision if it improves your financial situation. And you can do it, jump in, you\u2019re going to learn, it\u2019s going to be great, I promise you.
So now, you\u2019ve identified that you have the right topic to write, but how do you find those, right? People are always talking about, \u201cThere\u2019s no good deals out there.\u201d Well, to find incredible deals, all you have to do is follow a process that me and millions, I don\u2019t know, thousands of other millionaires who are getting wealth through real estate have followed. It is called the LAPS system. And it is really just coming down to a numbers game, right? It\u2019s all about this funnel. And you start at the top, that is the broadest part of the LAPS system, it\u2019s called leads, right? So how many total properties can you see? That is a lead. A lead is like you think there\u2019s a good deal out there, it\u2019s a house, it\u2019s a link to Zillow, it\u2019s your neighbor telling you that they heard someone selling you, all those are leads. It\u2019s just a threat, it\u2019s a whisper that there is a good deal out there. You need a lot of leads. That\u2019s why it\u2019s the top of the funnel is you need a lot of leads.
Next, you need analysis. So if you get 100 leads \u2026 We\u2019re going to use simple numbers, right? If you get 100 leads, that\u2019s a good number. If you had 100 leads, you\u2019re going to find a great deal. Then maybe of those 100 leads, you follow up on them and you analyze 20 of them because you\u2019re like, \u201cSome of these are going to work, but I really need to run the numbers to know which one is really going to work.\u201d Then you have to pursue them, right? Not all of them are going to work. Maybe you need to raise money and you can\u2019t find a partner. Maybe the seller doesn\u2019t take your offer or someone else bids higher, right? So you\u2019re not going to be able to get every one of them. But one of them is going to work. And this is the process I want you to think about.
Real estate is ultimately a numbers game. Start with 100 leads, you go down to 20 to analyze, you go to five to pursue and just one of them, all it takes is one of them to work for your stack to grow. Remember before I was saying that if you just bought one property per year with escalating size, you could be a real estate millionaire in five to 10 years. That\u2019s 100% true. You just need to follow this system. It\u2019s really not all that hard, right? You can absolutely do this.
So here\u2019s another example. I threw a picture of Brandon in this because he loves the LAPS system. But basically, he uses a different number, 300 leads, 42 and analyze, 12 to pursue and one to succeed. And if you think, \u201cHow am I going to get 300 leads?\u201d It\u2019s not that hard. A real estate agent can send you dozens of deals a week. If you want to use an off-market deal-finding app, you can find hundreds a week. And analysis, how we\u2019re going to analyze 40 deals? I\u2019m going to teach you to do that today. So don\u2019t get intimidated by these numbers.
So where do you get leads from, right? That\u2019s the most important because we have to start broad and get a lot of leads. So here\u2019s where we get them. The MLS, people love to say the MLS doesn\u2019t have deals, that\u2019s absolute nonsense. Listen to my podcast, On the Market, there are people out there and far more prolific investors than me like James Dainard, Henry Washington. They are getting dozens of deals off the MLS every single month. This just happens. So go find a real estate agent in your area, preferably an investor-friendly agent. We have a tool on BiggerPockets, it\u2019s biggerpockets.com\/agent. And you can get matched with an investor-friendly agent 100% free. They will start sending you deals, it\u2019s a great source of leads.
Next is off-market deals. You can drive for dollars. This is when you go out and you try and buy a distressed property. So my friends have a good way of saying this. It\u2019s like you\u2019re not buying a property, you\u2019re buying a situation. I love that because in every town, in every market, there are sellers who don\u2019t want to put their house on the market on the MLS for some reason, right? Maybe they had an unfortunate family situation or they don\u2019t have the time to fix up the property. You hear a lot about quarters or absentee owners who inherited a property and they don\u2019t want anything to do with it, right? These are situations where there are motivated sellers.
And as a real estate investor, you can go, be proactive and find them, and you might be able to get a better deal by going off market. And if you want to go and become a Pro member, I\u2019ll talk about this later, we actually have a masterclass on finding deals that comes with the Pro membership, which we\u2019ll talk about.
Next is direct mail. This is a different version of off-market. The first thing I should have clarified is the first way to do off-market deals is driving for dollars, where you actually drive around and you find distressed properties. And you\u2019re like, \u201cOh, that one was tall grass,\u201d and like, \u201cOh, no one\u2019s living there. Let me find that owner and talk to them. So that\u2019s one way. The other way is you could just start sending out mailers to properties that you like. And this is a numbers game, right? You\u2019re going to send out mailers and you might send out a thousand and only get 10 leads, but those 10 leads might be the ones that ultimately get you that really good deal. And it\u2019s worth it. Honestly, a lot of real estate investors I know do this very, very successfully.
The last is relationships, right? And real estate \u2026 People think it\u2019s this independent lone wolf game, but it is not. It is all about relationships. Sometimes people who I know who are real estate investors will pass me deals. And if you\u2019re thinking like, \u201cOh, why would they do that if it\u2019s such a good deal?\u201d Well, sometimes they don\u2019t have the money. They\u2019re between deals, right? They\u2019re saving up for a bigger deal. Or maybe they\u2019re working on flipping right now. Or they\u2019re really into short-term rentals and I\u2019m into small, multifamilies. If you have relationships with people, they will pass you deals and leads if you reciprocate, right? I do that for my friends. I don\u2019t flip houses personally.
So if I found a deal and I have friends who flip houses, I would pass that along to them. And I would hope that they would reciprocate in the future if they found deals that they thought met my crystal clear criteria, right? Again, that is why it\u2019s so important to have your criteria because I know what deals work for me. If they\u2019re not going to work \u2026 If I have a lead that\u2019s not going to work for me, I\u2019ll pass it along. And other people are going to do that for me as well. So these are just some of the ways you can get leads. Again, if you go Pro, we can get you this masterclass, it\u2019s going to teach you dozens of ways to find deals and it\u2019s great.
Next, let\u2019s talk about money because this is a big one, right? Everyone is like, \u201cHow am I going to get leads? Am I going to save for it? Do I have to save up?\u201d Yeah, that is a good way to do it. If you have a high-paying job or a sufficient income where you can save, you can save up enough money. Personally, I\u2019d in. If you want to BRRRR, in BRRRR, you do need money down, but it is a good way to recycle that money quickly. So if you had 100 grand to put into a property, you could renovate it, refinance it, and take out, let\u2019s say, 80 grand and use that 80 grand to buy another one. And you can do that over and over. And you can recycle the capital that you\u2019re using to buy multiple properties. That\u2019s a great method.
If you want to do low money down, the occupied loans. So this is like house hacking, owner occupied, you can put as little as 3.5% down. One of the examples I gave at the beginning of this webinar, someone used 3.5% down. So you can do that, too. Also, partnering. This is how I got started, just so you know. I got started \u2026 I found the deal. And I had three partners who we each put in a quarter of the down payment, right? But remember, I said I had no money. I further partnered and I borrowed money from one of the other partners for my down payment and paid them a 6% interest rate on my down payment on my one quarter of a down payment until I could get enough money to pay them back. So just think about that.
I found three partners, so four of us split a deal. And then I didn\u2019t even have any money. So I went out and borrowed even more money to be able to put my quarter of the down payment down. And listen, I am lucky, I knew some people who had enough money to be able to lend and to partner with me. Not everyone has that, but you can network and meet those people. But I knew some people and I was able to do that, right? I had no money, but I thought creatively about it. And most importantly, I had a good deal. And investors, no matter who they are, will not turn down a good deal.
So these are some good options. But you can \u2026 So just to summarize here. And again, actually, if you go Pro, we have a how to invest with low and no money down workshop that Brandon Turner put together that you can check out because there are so many more ways here. But I want you to focus on these, right? So I would say focus on partnerships. That\u2019s how I got started. So I think that\u2019s a really great way to do it. If you have a high-income job, you can either do a low. Not even high income. If you have a W-2 job where you can get a loan, you can save up for it or you could do an owner-occupied house hack. So those are my three personal favorite ways to get started because putting 3.5% down is super easy. If that\u2019s on a $400,000 property, it was probably a nice property, that\u2019s only 12 grand, right?
So if you have a W-2 job, you hopefully can save up 12 grand. And if you can\u2019t, go partner for it. That\u2019s what I did. So these are good things to do. But I want you to focus on something that I just said and it\u2019s really important. If you find a good deal, you will find the money, right? Everyone thinks, \u201cI need to find the money first and then I go find a deal.\u201d No, it is the complete opposite of that, right? Imagine going to someone and asking, \u201cHey, can I borrow some money? I want to buy real estate.\u201d They\u2019re like, \u201cSure, yeah, what\u2019s the property?\u201d And you\u2019re like, \u201cI don\u2019t know, I\u2019m going to go find it.\u201d The partner is going to be like, \u201cWhat? I mean, I have no confidence in that.\u201d
If you think about it the other way around, if someone came up to me and they\u2019re like, \u201cHey, I have this amazing deal, it\u2019s going to generate a 12% cash on cash return and you\u2019re going to get a 20% annualized ROI over the next 10 years,\u201d I\u2019d be like, \u201cYeah, okay, that sounds like a great deal. Where do I sign up?\u201d So think about this when you\u2019re thinking about money, it\u2019s about getting the deal first and then you can have an opportunity to go partner. And this is if you don\u2019t have the money to buy up on your own. So think first about finding great deals and, second, about finding the money because if you have the deal, you\u2019ll get the money, but you have to be able to analyze the property, right?
If you\u2019re going to come up to me as an investor and say, \u201cDave, I want to partner with you on this project, I have this great deal,\u201d and you don\u2019t have an analysis for me to look at, then what are you doing, right? I don\u2019t know if it\u2019s a good deal.
So next step is to analyze deals so that when you go out and partner or if you\u2019re just going to fund it yourself, you can go and show them what a great deal you\u2019ve found. So one way to do it is by hand, you can build an Excel spreadsheet. And I used to do this because I have a master\u2019s degree in analytics and I know how to do this stuff. And other people do do this. But honestly, I use the BiggerPockets calculators just because it\u2019s so much easier. And I don\u2019t want to have to build a new spreadsheet for every single property I analyze because, remember, when we talked about the LAPS system, we need leads and then analysis. And you might be analyzing 20 or 30 properties a month and you need something to do quickly. And the BiggerPockets calculators, honestly, let you do this in five minutes.
And so if you\u2019re doing that volume, if you\u2019re trying to follow the LAPS system, as I hope you do, you\u2019re going to want to find a tool that works quickly. So I highly recommend using the BiggerPockets calculators. We\u2019ve got tons of them. And I\u2019ll show you how to use it. Let\u2019s just do this right now. We\u2019re going to analyze a deal together.
Okay. So all I\u2019m going to do is go to tools. And then I\u2019m going to click on rental property here. And I\u2019m opening this in another tab. And you can see \u2026 Just so you know, guys, the rental property tool is part of BiggerPockets Pro, which is an amazing tool for people who want to get into real estate. Talk about that in a minute. But you can use it five times for free. So if you want to follow along or test this out, you can do that. I came to this page first because I just want to show you that I really use these. I actually don\u2019t always use pictures until I\u2019m going to show them to a potential partner or to a lender. I don\u2019t usually put pictures in, but I do this all the time. You can see, hey, look, good deal or cash flow, 5,000, this one was not so good in Austin for negative 14,000.
So show you all sorts of different kinds of deals, different cash flow. I\u2019m using this all the time. But let\u2019s get into this, we\u2019re going to run our deal together. So this deal, I\u2019m just going to copy and paste this here, street address and in Kentucky. And I\u2019m going to add a photo. And this is really important because, remember, in the LAPS system, a lot of this about finding a partner, maybe you want to find a lender, and it\u2019s super cool to just show them a really professional-looking report because they\u2019re going to want to know what they\u2019re investing in, what they\u2019re lending on. And these calculators are a great way to do that.
All right. So that\u2019s it. Next, we\u2019re going to move on to our purchase. Let\u2019s assume that we\u2019re going to buy this at asking \u2026 This was for 240,000, was the asking price, and closing costs is 5,000. Now, you\u2019re probably thinking, \u201cDave, how do I know purchasing closing costs, how\u2019s that 5,000?\u201d Well, I\u2019ve been doing this a long time. But if you haven\u2019t, you can just click on these help tips over here. Just click on calculating closing costs, and you can see around 1% to 2% of purchase closing costs. I\u2019m going to use 2%. You can use whatever you want, you can talk to a loan advisor, that\u2019s a good way to know, for sure. But if you just want to estimate it, 5,000 is great.
Let\u2019s just say we\u2019re going to rehab this property. We\u2019re not going to do a big bird calculation, but let\u2019s just say we\u2019re going to put some money into it and we think if we put 25 grand in, it\u2019s actually going to bring the value of the property up to 300,000. Again, after repair value, that takes some time to get good at it. But look at this, we have all of these tools for you to learn how to estimate ARV. I highly recommend you read these so you can get good at estimating it. But for now, I just want to walk you through the calculator and how easy this is to use.
I\u2019m just going to say, let\u2019s just say, it costs us 30 grand, I don\u2019t know, sounds about right, for repair costs. And that\u2019s it. So now, what we\u2019ve done just so far is all we\u2019ve done is put on that property information, we upload some photos, we got purchase price, closing costs, our ARV and repair costs. Next, it\u2019s time to talk about our loan. I\u2019m going to say that we\u2019re going to put 25% down because as an investor, I\u2019m not living in them. Usually, if you\u2019re not living in, you have to put 25% down. Depends on your lender. But for me, that\u2019s usually what I put down.
And I\u2019m going to put 6% interest rate. I think that\u2019s actually higher than interest rates are right now, but I\u2019m going to just say 6% for this. We\u2019ll be conservative, right? We don\u2019t want to buy the wrong things. We want to buy something that fits our crystal clear criteria. And I\u2019m going to put a 30-year fixed rate loan because I love 30-year fixed rate loans. Again, you want to learn more about it, just click on these super easy things, right? We\u2019re flying through this, guys. We\u2019re more than halfway done.
Now, it is time to put in our rent income. And I know that this can intimidate people. But lucky for us, we just go to the BiggerPockets rent estimator and we can just put in our rent, our area. So we\u2019ll search this address, we know that this is \u2026 I\u2019m actually going to do this as two bed one bath. If you remember, this was four units, they were all two bed, one bath, and I\u2019m going to search this address. And look at this. So 725. That\u2019s what we\u2019re seeing. And look, confidence is high. This is one of the things I love about the BiggerPockets rental estimator is that it tells you how confident it is because there are some places where there just aren\u2019t good comps, maybe if it\u2019s like super rural, or it\u2019s a seven-unit, a seven bedroom or something random like that, it\u2019s hard to estimate, but a two bed one bath usually get high.
And you can see on the low end for maybe a not great property, you\u2019re getting about 507. For a high-end property, you\u2019re getting almost 1,100. I\u2019m going to assume this property, again, I\u2019m just making this up, I don\u2019t know that well, is right in the middle. So I\u2019m going to use 725. If you want to look around and see the comps, wow, this is near a place called Spaghetti Junction, which is hilarious. I love that. So this property is near Spaghetti Junction apparently, great sounding place. And you can click on any of these comps if you want to see. But look, there\u2019s a lot of comps over here. So you can see that\u2019s why we have this high confidence is that there\u2019s a lot of properties around here.
And listen, this is a great way to estimate rent. But if you really want to know for sure, call a property manager in your area or you can go on Craigslist, or Zillow, or whatever and just see what things are renting for in that area. Or maybe you\u2019re a renter right now in your neighborhood. And you might be able to do that. So 725 times four is 2,900. So I\u2019m going to do that as our gross monthly income. And that\u2019s it.
So again, use the rent estimator on BiggerPockets that it\u2019s a Pro feature, call a property manager if you don\u2019t know, go on Zillow. Those are all great ways to estimate rent. But, obviously, if you\u2019re using BiggerPockets, that\u2019s an easy way to do it.
All right. Down to our last one, expenses, property taxes. This one, I\u2019m going to estimate it at about $2,500 per year. And you can determine this a lot of ways. A lot of times, it\u2019s public data. So if you see here public data, you can probably go \u2026 This is in, where was it in, Frankfort, Kentucky, in Frankfort, Kentucky, you could probably go on their government website and look up what the taxes are. So you don\u2019t even have to estimate, you can just go know, for sure, which I recommend you doing.
Insurance is usually a little bit trickier. But for a single-family home, it\u2019s usually around 1,200. For my multifamilies, I usually pay around 2,400. So I\u2019m going to estimate that again. These are just for running the numbers quickly. If you get to the point where you\u2019re going to offer on a property, you\u2019re going to want to call an insurance broker and know exactly what your numbers are. But in the context of the LAPS system, if you\u2019re running 40 deal analysis, you can use these rules of thumb just to narrow it down, which ones you\u2019re going to offer on and then refine your search, which I\u2019ll show you had to do in a second, overtime.
Repairs and maintenance, vacancy, CapEx, all these are a percentage, and I like to just use fives, 5% for repairs and maintenance, 5% for vacancy. Vacancy in the US is 2% right now, but you should look up your local area because it can really depend on where you are. A lot of high-priced cities, where there\u2019s not a lot of rentals available, have really low vacancy. Rural areas sometimes have higher vacancy rates. So you definitely want to check that out for yourself.
Again, I just want to show you how to use the calculator here. CapEx, which is like repairs and maintenance, but it\u2019s actually for the big ticket items. If you needed a new boiler, you need a new roof, it\u2019s treated a little bit differently in your taxes. And so you want \u2026 That\u2019s why we have them separately here in the calculators, but it\u2019s 5%, I think, is probably pretty good. For repairs and maintenance and CapEx, you want to go by the condition of the property. If you have a brand new build, you can estimate on the lower side. If you have something that\u2019s rundown and needs a lot of work, you\u2019re going to want to jack that up to make sure you have a cushion and that you\u2019re not putting in yourself at risk for needing to have to come out of pocket to make those repairs.
So for some people, it might be 10%. Let\u2019s just make the 7%, I don\u2019t know. I\u2019m just making numbers up here. And management fees are the last one. So if you want to self-manage, you can put zero. I recommend that, honestly, for people who are just getting started because you learn so much and you generate more cash. But let\u2019s just say this is my deal, I don\u2019t live in Kentucky, so I\u2019m going to estimate 8% on management fees. That is a personal decision whether you want management or not.
Now, for me, my personal preference is to find properties where I can bill electricity, gas, water, all of these utilities as separate, that I can just bill them directly to my tenants. They sign up with the electric company. They sign up with the water company. I don\u2019t even have to get involved, right? It\u2019s so much easier. So I personally just put these down to zero because the tenants take care of it. They pay for what they use, it\u2019s fine. I don\u2019t need to be involved.
Next is HOA. I don\u2019t buy properties in HOAs personally. I do not like them. I don\u2019t like the idea of this like governing board of people who I don\u2019t know, who may have no experience at all in real estate investing, dictating what I\u2019m allowed to do at my property. That\u2019s not for me. Some people do it, not for me personally. But if you are going to do a property with an HOA, I recommend you do a lot of due diligence on the HOA, learn about who\u2019s on it, what the rules are, what their power is, or try and get on the HOA, right? If you\u2019re going to buy a property in an HOA, try and get on the board so you can have influenced the decisions. That\u2019s up to you, though.
Garbage, I think I usually pay this stuff. So I\u2019ll just say [inaudible 00:56:00] 50 bucks a month, it\u2019s 25 bucks a month. And that\u2019s it, guys, we have done everything we need to do for property analysis. And I know that probably took me, what, five, seven minutes, but I was talking a lot. So if I was just doing this on my own, I could have done this in probably two or three minutes. And that\u2019s what\u2019s so cool about this is if you\u2019re doing this LAPS system and you\u2019re getting deals from your agent and your deal machine or whatever, you can run these deals in an hour, you could probably do 15 of them.
So let\u2019s check out this deal. Where does it come out? Oh, that\u2019s a pretty good deal, right? $662 per month in cash flow, a cash-on-cash return of 8%, which is \u2026 For me, I would love that. This is great. Annualized return of 17%. All this is excellent, right? So we can see here that for most people, this is probably going to be a great deal. And if you come down here, you can start to see the long term of what I was talking about.
Remember, on those slides before, we had this green line that was going up, that\u2019s your property value. And then we have this purple line, which is how much you owed the bank. And you can see the same exact thing here as we showed in the slides on our chart here that shows our value is going up and up and up over time. And you can see the profit if sold, at first, it was 33k. By year 30, it\u2019s not $125,000, [inaudible 00:57:22] a millionaire from this one property guys, right? It\u2019s incredible. So that\u2019s why these calculators are so helpful.
But I also want to show you one thing. We got lucky here, I picked this random deal. This turned out to be a good one. But say in your crystal clear criteria you only want a 10% cash on cash return. Okay. So maybe what you need to do \u2026 The thing I want you to know is that every deal has a number that works for it, right? You want 10% cash on cash return. So maybe this deal isn\u2019t for you. But let\u2019s just see, let\u2019s see what else happens. What happens if you can increase your rent to 3,000 a month or 3,045, right? Maybe you make some more repairs. And you can do that.
All right. Now, we\u2019re at 9.75 for cash on cash return, not bad. Pretty good. So let\u2019s put this back. Maybe instead of 2,900, maybe I keep rent, and I don\u2019t think I can raise rent. What if I offered the seller 220 or let\u2019s just say 225? What happens then?
Now, we\u2019re at 9.94. Let\u2019s \u2026 Okay, I\u2019m just going to go to 223. Okay. Now, we\u2019re at a 10% return. And I\u2019m, obviously, fudging these numbers, but that\u2019s what real estate investors do. If you need a 10% cash on cash return, don\u2019t just say, \u201cOh, this is a bad deal. I\u2019m not doing it.\u201d Go offer, what was it, 223. That\u2019s going to get you your 10% cash on cash return, right? They might not accept it, but like I said, it\u2019s a numbers game. Remember, you do 100 deals and then \u2026 100 leads, analyze 20, pursuit five, if you\u2019re getting five people this offer, maybe one of them accepts it and you got a deal for 10%. And that\u2019s why I love these calculators because you can make it work for you.
I think there\u2019s something that a lot of real estate investors say is that you don\u2019t find great deals, you make great deals. And this is a perfect example here. If you wanted a 10% cash on cash return, that was your crystal clear criteria, then you make it a great deal by offering 223,000. They don\u2019t accept, fine, that\u2019s fine. That\u2019s why you have so many leads. That\u2019s why you\u2019re analyzing so many deals. You\u2019re not attached to this one deal. But if you could do it, great. That\u2019s what\u2019s so cool about this. And that\u2019s what\u2019s so important about being able to analyze the deal accurately.
Last thing I want to show you about this is you can share these things, which I think is really cool. So you can enable report sharing and hit Download PDF here. And you\u2019ll be able to download these entire PDFs. And when you\u2019re going to partner, remember we talked about using this deal analysis, if you have a great deal, people will want to partner with you, people will want to lend it to you. And so look at this, it\u2019s a great deal. I can now show this professionally developed analysis to people and say, \u201cLook at what I got, I have a deal that\u2019s going to produce 10% cash on cash return.\u201d Over the 10 years, you\u2019re going to get an annualized return of 13%. Look at how I\u2019ve estimated my expenses, look at how I\u2019ve estimated my income. I\u2019ve done this in a professional way and you can share this with people to great way to help you raise money. So don\u2019t overlook this part of sharing these deals.
And let me \u2026 I should just mention that people come to me and ask for money in partnership a lot. And they offer me these Excel spreadsheets, and I know how to do this stuff. But I don\u2019t want to learn how you did Excel, I don\u2019t want to look through every cell and see if you made all these mistakes or how you\u2019re calculating cash flow, if you do CapEx, right? When someone comes to me with something like this that\u2019s professionally created and as a system, I\u2019m much more likely to believe them because I know that a team of people here at BiggerPockets or whatever have vetted them and have created this.
Okay. So that\u2019s analyzing a deal, right? So what we\u2019ve talked about today is the LAPS system. We\u2019ve talked about how to find these deals, just get an agent, look at off-market deals, then analyze these deals and pursue them. Is it really this simple? Is real estate really as easy as just following this simple? Well \u2026 I mean, this simple step? Yeah. Yes and no. I mean, first thing you need to know is that, yes, the number one thing that holds most people back from their true potential is fear. So, yes, it is really as simple as following these steps, but it\u2019s not so simple because fear is real, right? It is a lot of money, it is a big step that you need to take. And there is fear.
I get that real estate often feels like jumping off a cliff. You\u2019ve saved off this money, and it\u2019s this huge decision, and it\u2019s going to change your whole life. And it will change your life for the better, but it is not like you\u2019re doing this alone and jumping off a cliff and it\u2019s this risky, unknown thing. In fact, it\u2019s much more like this. It\u2019s like hiking. And it\u2019s like hiking with friends, you have people to support you. There are people who have done this before. You are not jumping off a cliff. You are doing a slow climb to the top of a hill. And it\u2019s a well-worn path that people have walked before.
At BiggerPockets, we know all about this because this is what we do. We build tools to help investors on their journey towards their goals in life. So, yes, is it this simple as following this path? Yeah, it really can be if you can get over the fear and if you are inspired to take action and to take control of your life to become a real estate millionaire to earn the time and financial freedom. I\u2019m guessing if you\u2019re sitting here that you really want that it really can be that simple.
So as we\u2019re winding down here, here are three big questions that you need to ask yourself. First, are you prepared to define your crystal clear criteria? Because that focus is what\u2019s going to help you run the LAPS system. If you know what you want, you\u2019re going to know what are good leads, you\u2019re going to be able to analyze good deals, and you\u2019re going to know which ones to act on.
Number two, do you know how to use the LAPS system funnel to build your pipeline? Hopefully, right now. It\u2019s pretty simple, right? Go out, find great deals, analyze and act on them. I keep saying it over and over because it\u2019s that easy.
And lastly, do you know that by finding a great deal, drill this into your head, by finding a great deal, you will be able to finance those deals because people like lending and they like partnering on deals that are really good deals. So hopefully, you said yes to all three of those things. That means I\u2019ve done my job here today and taught you how to run these systems. That\u2019s all great. But if all it was is about information, that would be great. If all it took was knowing how to buy it, then we\u2019d all be millionaires, right? I love this quote, if more information was the answer, we would all be billionaires with perfect abs, right? It\u2019s not just about knowing those things.
The key to success is also about taking action. It comes down to consistent practice. This isn\u2019t a get-rich-quick scheme, remember. This is something that you have to do every day. And the LAPS system is all about numbers. You need to be consistently working your deal funnel.
Next, it is about continued education. Congratulations by being here on this webinar. You\u2019re already doing this one. But keep in touch with BiggerPockets, listen to podcasts, read books, blogs, most of these things are completely free and can help you continue on your journey.
Next is accountability. I love this one. Because if you have people who are also investing in real estate, who are also pursuing the same goals that you are, you\u2019re much, much more likely to be able to achieve the goals that you set out for.
And lastly, it\u2019s all about action, right? Really, you can sit here and a lot of people are going to come and listen to this and think, \u201cThis isn\u2019t for me,\u201d and that\u2019s fine. Or maybe I\u2019ll do this one day, but there are some of you out there sitting there right now thinking that, \u201cThis is for me, I am ready to do this.\u201d And if so, all I can recommend, the thing I can recommend is go start taking action right now. Take the momentum that you\u2019ve built by sitting through this webinar and go to find your crystal clear criteria, go start getting those leads right now today, go find an agent today, and start building that action and momentum.
So I just wanted to show you guys that this works. Dennis said that I want to thank you and BP after attending your webinar on how to make 1 million in real estate, I got inspired to take action. Last week, I closed my first deal, now have a triple that has rented and will cash flow very well for me. Can now call myself a real estate investor, have a plan for moving forward, and will make my business a success, right? That\u2019s what it\u2019s all about, guys.
Also, I love that they\u2019re saying that they did it a week later. That\u2019s what I really think is important here is that he kept up that momentum and was able to keep taking action. So if you are ready to keep taking action, what is the next step? Well, I would recommend becoming a BiggerPockets Pro member. BiggerPockets Pro is a suite of tools that are designed to help you analyze properties and get to your next deal, whether that\u2019s your first deal, your second deal, or your third deal, get to your next deal faster, right? Because that\u2019s what we want, right, is to get to that financial freedom faster. It is not a get-rich-quick scheme real estate, just to make that clear. But if you use tools like BiggerPockets Pro, doesn\u2019t need to be 10 or 20 years in the future. It can be three years or five years into the future. And that\u2019s what BiggerPockets Pro is designed to do.
Now, this isn\u2019t for everyone. If you\u2019re at home and you learn this information and you\u2019re like, \u201cOh, maybe I\u2019ll do this one day,\u201d we want people only to go Pro if they\u2019re ready for this. If you\u2019re ready to take action, and you\u2019re ready to pursue this financial freedom, BiggerPockets Pro is a great tool for you. If you\u2019re not ready for that, that\u2019s totally fine. But I\u2019m going to assume that you are one of those people who wants to start taking action and just show you what we got here.
So number one thing you can do with Pro is confidently run the numbers, right? That deal analysis tool I showed you is just pure gold. It is so incredibly valuable to investors. That\u2019s the one of the core features of BiggerPockets Pro. We also have the rent estimator that I showed you because to analyze good deals, you need to know what they\u2019re going to rent for. And you can do that using the rent estimator.
Next, show the community that you mean business by being a pro. There are so many one wantrepreneurs \u2026 Have ever heard that term? It\u2019s like people who want to be an entrepreneur and they talk about it, but they\u2019ve never done anything. They don\u2019t have any skin in the game. They\u2019re wantrepreneurs. Well, show people that you\u2019re serious by signing up for Pro and accessing these tools, and being someone who\u2019s in it, who\u2019s in the game. I promise you by being a pro and by having some skin in the game, people are going to be more likely to answer your questions, they\u2019re going to show you deals, they\u2019re going to want to partner with you, much more than if you\u2019re someone who\u2019s just sitting on the sidelines and kicking the tires a little bit.
Next, you also have access. I love this. You have access to our boot camps. I know so many experienced investors who are going to BiggerPockets boot camps because they\u2019re so valuable. They have this accountability element, right? It\u2019s like people who are doing the same things on the same timeline as you, which is just really cool. And you\u2019re going to learn from experts like Ashley Kehr and Tyler Madden. There\u2019s just so \u2026 And Matt Faircloth. All these really experienced investors teaching you and you can only sign up for boot camps if you\u2019re a Pro. So it still costs a little bit more, just to be clear. It\u2019s 199 per course, which is an absolute steal.
Do yourself a favor, go look at what other people\u2019s mastermind\u2019s boot camps cost, $499. That is an incredible deal. And that\u2019s because at BiggerPockets, again, we believe that anyone can do this and everyone should do this.
You also get all these Pro exclusive videos and webinars, you can watch the whole archive. There are hundreds and hundreds of webinars, just like this, teaching you different strategies for real estate investors. We have landlord forms. So I love this because I own property in Colorado, but I also have been looking at deals in other states and we have landlord forms like leases, pet addendums, break lease forms, whatever it is, in all 50 states and they\u2019re updated every single year, so you just get to stay on top of things.
When I first started investing in real estate, I paid 500 bucks to have a lease written. This just comes free for part as Pro for as many states as you\u2019re investing in. We also have BiggerPockets partners, huge companies like Mashvisor, Roofstock, AirDNA, that have great information for you and you get discounts by being a BiggerPockets Pro. And these are all really nice features. I use pretty much every single one of them. But the number one reason to consider going pro today is because it works. I know, it sounds stupid. Sounds simple, but it does. It really works. We have spent years, decades crafting these tools around being a successful real estate investor.
BiggerPockets believes that every single one of you, if you want it and you are ready to take action, can become a real estate millionaire. And we have built BiggerPockets Pro to support you on that journey. It just works. I\u2019ve literally seen tens of thousands of people \u2026 I\u2019ve worked here for seven years, I\u2019ve seen tens of thousands of people become successful in real estate investing, thanks to BiggerPockets Pro.
One of those people is Aaron, he said, \u201cBiggerPockets calculators are my go-to for analyzing potential properties. There\u2019s no way I could analyze the volume of properties I do without being a Pro member. I locked up my first three unit almost a year ago, and now I\u2019m selling 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.\u201d That\u2019s awesome. That\u2019s exactly what we\u2019re going for.
Patrick said, \u201cBack in June, I attended one of your webinars. Right afterwards, I signed up for Pro. In the next couple of weeks, I analyzed a bunch of deals.\u201d See, I love that because he\u2019s taking action immediately and getting that momentum. Eventually, I found a fourplex. I got it under contract three weeks later, it\u2019s after signing up for Pro. It\u2019s amazing. A week later, close on another property that was six units, big thank you to you and the entire team. Final quick tip, sign up for Pro. I made my money back at the closing table.
I love that. And these are just some of the thousands of people who have done it. So if you are ready to take action, you can do that. And you can actually save 20% today by using the code, millionaire web, that\u2019s millionaire W-E-B. You can just do that by going to the Pro checkout page. And I should mention that it\u2019s normally $390 a year, which is an incredible deal in its own right. Again, if you want to, you should \u2026 If you\u2019re curious, other courses, other things out there on the internet literally costs like $10,000 for a weekend. But because of our core values at BiggerPockets, and that we believe that everyone should have access to real estate investing, we have priced it so that anyone can afford it.
So 390 bucks is what we charge. But because if you\u2019re here today, you get that 20% off, it\u2019s only $312, which is even more of a screaming deal. So use that code, millionaire web. And on top of that, I got some more gifts for you just for going Pro today because we really want you to start taking that action if you\u2019re ready.
Number one, you\u2019re getting a $40 value of the intention journal. This is awesome. Brandon created it. It is a way to keep track of your thoughts for the next 90 days. I promise you, if you follow what I just taught you and you use this journal for the next 90 days, you\u2019re going to get your first deal. I promise you, I\u2019ve seen it so many times, you can absolutely do it. And so we\u2019re going to give you this intention journal for free if you go Pro in the next few days.
Next, I mentioned this earlier, you can get the investing with low or no money down workshop with Brandon and David. That is a $200 value as a nine-part video series. If you want to talk about \u2026 If you\u2019re thinking, \u201cI don\u2019t know how to start that LAPS funnel, the top of the funnel,\u201d this is a great way to do it. You can learn all about investing with this and how to build that lead funnel, how to get a ton of leads with this. We also have finding great deals masterclass. We also have \u2026 So we have all of these tools here. We have low or no money down, we have finding great deals masterclass, all this adds up to thousands of dollars in bonuses.
So we have a cheap product to start with. It\u2019s 20% off, $1,000 value and bonuses, all a great reason to start taking action and go Pro today. Again, we really want you to do this because we believe, we truly genuinely believe that this is the best way to financial freedom, to becoming a millionaire, to living a life that you are excited about and that has purpose for you. So if you\u2019re interested, go to biggerpockets.com\/proupgrade. That\u2019s where you do it, biggerpockets.com\/proupgrade. Make sure to use that code, millionaire web, is going to get you 20% off and it\u2019s going to get you access to all the bonuses I just gave out.
Last thing, if you go Pro and you don\u2019t like it, we\u2019ll give you your money back. No questions asked. You have 30 days and 100% refund. And if you start using it and think, \u201cThis isn\u2019t for me,\u201d we\u2019ll give you your money back. But we are confident that if you start building that momentum, if you follow the steps and the systems that I taught you today, you are going to love it. You\u2019re going to love BiggerPockets Pro, and in the next 90 days, if you follow that journal, you\u2019re going to be on the path to becoming a real estate millionaire.
All right, everyone, I will leave you with some parting words from Jim Rohn. He says if you really want to do something, you\u2019ll find a way. If you don\u2019t, find an excuse. So get out there and find a way. Take action, start building that momentum, and you will be on your path to becoming financially free. I promise you, I\u2019ve done it myself. I\u2019ve seen thousands of people do it and you can absolutely do it, too. So good luck to you. I hope you\u2019ve learned a lot on this webinar.
Again, if you have any questions or you want to reach out to me, you can do that on BiggerPockets or on Instagram where I\u2019m @thedatadeli. Thank you all so much for watching and good luck out there.<\/p>\n