realtykast_fmyriy - Realty Kast

In Home Improvement

Bathroom of the Week: Special Details Create a Luxurious Feel

August 26, 2025 No Comments

After working with this couple on several homes over the years, interior designer Jeannine Bogart knew their style and how they liked to live. So when they needed a house that could bring three generations under one roof, she was involved from the start. She even helped during the search, which led them to a 1970s French country-inspired home in Northbrook, Illinois. She was there throughout the design and renovation phases and coordinated the move once the house was ready.

At the top of the renovation list was the primary bathroom. “As a space central to our clients’ daily comfort and quality of life, it needed to reflect the overall aesthetic of their home,” Bogart says. “The budget for this room was intentionally generous, allowing us to explore a range of possibilities.” This included expanding the small shower stall and tricking it out with luxurious bells and whistles. Other highlights are a vanity that maximizes storage, heated floors and lovely custom details that personalize the space.

This article was originally published by a www.houzz.com . Read the Original article here. .

In News

The Buying Window is Still Wide Open Especially in These “Emerging” Cities

August 25, 2025 No Comments

This article is presented by Rent To Retirement.

You can’t escape the headlines these days. Every media outlet seems fixated on recession fears, whispers of potential rate cuts, and stories of a cooling housing market.

But as you might know, market uncertainty often creates the greatest opportunities.

In today’s real estate market, there’s a mixed bag. On one hand, you have a reversal of the Sunbelt growth trend from the pandemic era. Markets like Austin, Tampa, and Miami are all cooling off with high inventory and falling prices. Meanwhile, the “losers” of the pandemic era in the Northeast are also doing the opposite. Those markets now have rising prices amid an inventory shortage. So, where does a good real estate investor like you look these days?

The answer is somewhere in between the above. Something we’ll call the “emerging markets.” These emerging markets, away from the spotlight of big cities, offer untapped potential for those who know where to look.

But the best opportunities aren’t necessarily in big markets like New York, Los Angeles, or San Francisco. Instead, they’re hiding in smaller, strategic markets, ready to provide better returns and less competition. And companies like Rent to Retirement have made finding these “hidden gem” markets easier than ever for investors.

Why It’s a Unique Moment for Investors

As an investor, your success hinges on recognizing pivotal moments, and this year has shaped up to be exactly that. Several macroeconomic factors have aligned in ways rarely seen.

Inflation, the economic headline-grabber for years, is finally down, at least compared to where it was in 2021-2023. Lower inflation typically eases pressure on the Federal Reserve to raise interest rates, and economists are speculating about a potential rate cut coming as soon as next month. In fact, you’re already beginning to see that speculation easing pressure on mortgage rates, where they are now the lowest they’ve been this year at ~6.5%

However, interest rates alone aren’t the full story. The dynamics of supply and demand are also playing a critical role. Over the past few years, major metropolitan markets have seen rapid appreciation in home values, pricing many investors out and making returns less attractive. These inflated prices are now creating significant risk for investors heavily concentrated in big cities, as corrections or stagnation could erode equity rapidly.

Historically, economic volatility has been a catalyst for wealth creation, particularly in real estate.

While major metros might seem tempting due to their prestige and familiarity, you should recognize that they are riskier bets in this current climate. Instead, the real gold lies in understanding where market dynamics are shifting, affordability meets demand, and future growth potential aligns with stable economic indicators.

The Shift to Emerging Markets

When real estate experts talk about “emerging markets,” they’re referring to secondary and tertiary cities, growth suburbs, and smaller regions. Unlike saturated major metropolitan areas, these markets are typically characterized by affordability, steady job growth, and robust population trends.

Cities like Boise, Idaho; Huntsville, Alabama; and Greenville, South Carolina, are notable examples, where rising employment opportunities and relatively lower living costs attract both young professionals and retirees.

What makes these markets especially attractive to investors?

Lower entry prices: The cost to purchase properties in emerging markets is generally lower than in major metros, allowing investors to diversify and acquire multiple income-generating assets more efficiently.
Higher potential yields: Lower purchase prices often translate into better rent-to-price ratios, giving you higher cash flow and stronger overall returns.
Less competition: Emerging markets usually attract fewer institutional investors, meaning less competition and more opportunities for individual investors to secure deals.

Furthermore, these markets typically have local governments incentivizing economic growth, creating favorable conditions for real estate appreciation and stability. Cities actively investing in infrastructure, education, and healthcare tend to draw a consistent influx of residents, laying a solid foundation for sustained property demand.

Risks & Rewards: Investing Strategically

While emerging markets offer exciting investment opportunities, they aren’t shoe-ins.

One of the main challenges investors face outside major metropolitan areas is market predictability. Smaller and developing markets can experience quicker fluctuations due to economic shifts or localized events. This unpredictability may pose risks to property values, rental income, and overall investment stability if not managed properly.

Additionally, managing properties in emerging markets can present logistical and operational hurdles, especially for out-of-state investors. Factors such as finding reliable property management, understanding local tenant laws, and handling maintenance from afar can be daunting if not carefully planned.

To navigate these challenges successfully, investors must focus on key factors when assessing market potential:

Economic fundamentals: Evaluate factors like local economic health, employment rates, industry diversity, and infrastructure development. A stable, growing economy generally correlates with robust real estate demand.
Employment stability: Look for markets supported by strong employment sectors, such as technology, healthcare, education, or manufacturing, which tend to weather economic fluctuations better.
Local government policies: Favorable regulatory environments, zoning laws, incentives for businesses, and clear property rights are crucial indicators of long-term investment security.

To further mitigate risks, thorough due diligence and targeted property selection are indispensable. Partnering with professionals who understand these markets deeply and can provide comprehensive due diligence, accurate market data, and local insights can dramatically improve your outcomes.

Investing strategically means recognizing both risks and rewards. By equipping yourself with detailed market knowledge, careful property selection, and reliable local partnerships, you can confidently capitalize on the opportunities that emerging markets provide in 2025 and beyond.

How Rent to Retirement Simplifies Strategic Investing

Navigating the complexities of emerging market investing can feel overwhelming, but it doesn’t have to be. Rent to Retirement is designed precisely to help investors like you seize these unique opportunities with confidence and ease.

As a leading turnkey real estate provider, Rent to Retirement specializes in identifying and vetting high-potential properties in promising markets across the country. Their seasoned team carefully analyzes each market for economic fundamentals, growth potential, and investment stability, ensuring that you’re presented with properties that meet stringent investment criteria.

One of the core benefits of partnering with Rent to Retirement is gaining immediate access to their extensive inventory of pre-vetted turnkey properties. This means the heavy lifting of due diligence, market analysis, property inspection, and legal considerations is already completed, significantly reducing the risk and effort typically involved in entering new markets.

Take, for example, a recent investment success story in a growing suburban market. An investor was introduced to a turnkey duplex in an area showing strong job growth, favorable housing demand, and supportive local policies. With Rent to Retirement’s guidance, the investor secured financing, acquired the property, and immediately began generating consistent cash flow—all without the usual headaches associated with property management and tenant placement.

Rent to Retirement doesn’t just stop at property selection. Their comprehensive service extends to ongoing property management support and continuous investor education, empowering you to maintain and grow your investment portfolio effectively and effortlessly.

With Rent to Retirement, you don’t need to navigate emerging markets alone. Their expertise and streamlined approach simplify strategic investing, ensuring you not only recognize opportunities but also capitalize on them successfully.

Time for Action

Don’t let the unique investment opportunities of the moment pass you by.

With Rent to Retirement, you’re not just investing, you’re strategically positioning yourself to capture growth and secure financial stability. Their vetted turnkey properties and comprehensive investor support system remove uncertainty, allowing you to focus on what truly matters: building your wealth through strategic real estate choices.

Act now and take advantage of these favorable conditions. Schedule your consultation with Rent to Retirement today, and begin your journey toward profitable real estate investing.

Source link

In News

Do These 31 Markets Make More Money on Looks Alone?

August 25, 2025 No Comments

Short-term rentals (STRs) have obvious upside: cash flow, appreciation, and the added perk of owning a property in a place you enjoy visiting. However, as every experienced host knows, the postcard view doesn’t always translate to profits.

Regulations, seasonality, property taxes, and nightly rate caps can significantly impact your deal. That’s why we analyzed 31 of the most beautiful towns in America, a list straight out of Condé Nast Traveler, and ran the numbers like an investor would.

We examined median home prices from Zillow, estimated annual STR revenue with predicted averages using Mashvisor, Rabbu, Airbtics, and PriceLabs, and calculated a simple yield (gross revenue divided by price). Then we added the crucial layer most “best towns” lists leave out: local STR rules.

The results show a mix of possible winners with double-digit yields and more friendly policies, big-budget prestige towns where returns are slim, and do-not-invest destinations where moratoriums or outright bans make STRs all but impossible.

The Numbers First

Here’s the data on prices, yields, classifications, and regulatory notes for all 31 towns we examined:

Tough but possible

Bar Harbor, ME: $677K homes, $97K revenue, 14% yield. VR-2 rentals are capped at 9% and require a four-night minimum.
Ketchikan, AK: $399K homes, $44K revenue, 11% yield. Zoning permit and parking space required.
Lake Geneva, WI: $399K homes, $68K revenue, 17% yield. License needed, 180-day cap, two-night min.
Lake Placid, NY: $358K homes, $53K revenue, 15% yield. New unhosted STRs are banned; hosted STRs are capped in neighborhoods.

Potential

Beaufort, SC: $410K homes, $44K revenue, 11% yield. 6% cap per neighborhood.
Camden, ME: $674K homes, $58K revenue, 9% yield. 150-license cap.
Deadwood, SD: $445K homes, $35K revenue, 8% yield. STRs are banned in residential areas except during the Sturgis Motorcycle Rally.
Eureka Springs, AR: $311K homes, $23K revenue, 7% yield. New STRs are banned in residential areas.
Gatlinburg, TN: $411K homes, $54K revenue, 13% yield. STRs are banned in some zones, but allowed in most.
Harpers Ferry, WV: $396K homes, $38K revenue, 10% yield. Registration and taxes.
Hudson Valley, NY: $437K homes, $53K revenue, 12% yield. Must be registered and pay fees.
Jekyll Island, GA: $875K homes, $77K revenue, Application process.
Lewes, DE: $605K homes, $52K revenue, 9% yield. License and local contact.
Mackinac Island, MI: $490K homes, $37K revenue, 7.6% yield. Rentals treated as hotels.
Montpelier, VT: $437K homes, $34K revenue, 8% yield. Rental registration and taxes.
Rockport, MA: $869K homes, $61K revenue, 7% yield. State STR registration and taxes.
St. Augustine, FL: $441K homes, $52K revenue, 12% yield. Strict zoning rules.
St. Michaels, MD: $730K homes, $79K revenue, 11% yield. License and inspections.
Sedona, AZ: $904K homes, $71K revenue, 8% yield. Registration and taxes.
Taos, NM: $449K homes, $45K revenue, 10% yield. 120-permit cap.
Whitefish, MT: $858K homes, $70K revenue, 8% yield. Only certain zones are allowed.
Woodstock, VT: $712K homes, $54K annual STR revenue, 7.6% yield. Town ordinance with caps.

Big budget

Block Island, RI: $1.8M homes, $84K revenue, 5% yield. Annual registration, two ppl/bedroom.
Carmel, CA: $2.36M homes, $125K revenue, 5% yield. STRs are banned in R-1 zones (the single-family district).
Jackson, WY: $1.9M homes, $79K revenue, 4% yield. STRs limited to three stays/60 nights in residential.
Snowmass Village, CO: $2.1M homes, $130K revenue, 6% yield. Annual permit, four-night min.

Don’t invest

Cannon Beach, OR: $890K homes, $69K revenue, 8% yield. 14-day rules.
Friday Harbor, WA: $887K homes, $37K revenue, 4% yield. Registration and taxes.
Magnolia Springs, AL: $403K homes, $29K revenue, 7% yield. STR moratorium.
Paia, HI: $1.3M homes, $92K revenue, 7% yield. STR moratorium.
Portsmouth, NH: $776K homes, $50K revenue, 6.5% yield. STRs are illegal in residential areas.
Woodstock, VT: $712K homes, $53K annual STR revenue, 7.6% yield, Town ordinance with caps.

Breaking It Down Further

Now that we have the numbers in hand, let’s analyze these markets further.

Tough but possible

These are the markets that make investors’ palms sweaty. On paper, the yields are incredible. We’re talking 14% to 17% in places like Lake Geneva, WI, and Bar Harbor, ME.

But here’s the catch: You’re not just buying a property; you’re buying into a set of rules that force you to operate differently.

Take Lake Geneva. Yes, a 17% yield looks like mailbox money, but the city caps you at 180 days and enforces spacing rules between stays. That means you don’t really own a year-round STR; you own a seasonal machine. Still, if you’re priced out of the mountains or beach markets, Lake Geneva is one of the few Midwest towns where the cash flow rivals the big names.

Bar Harbor is another one where the rules seem painful, but scarcity is your friend. Nonowner STRs are capped at 9% of parcels and require four-night minimums. Most investors see that as a deal-breaker. I see it as a moat. Once you’re in, there’s less chance of a race to the bottom on nightly rates.

Lake Placid, NY, also fits this mold. The 15% yield is real, but “unhosted” STRs are banned in most neighborhoods. That’s not a spreadsheet problem; that’s a strategy problem. You either play the hosted game, find a commercial area, or wait for a grandfathered permit to become available.

Bottom line: If you’re willing to work around restrictions, these markets pay off. The rules weed out casual hosts, which can leave more room for pros.

Potential

This is the most enormous bucket—markets where the numbers work, but the local rules are more like guardrails than roadblocks.

Gatlinburg, TN, is the headline act here. You get a 13% yield and a market that’s bulletproof thanks to the Smokies. The only catch is zoning. Buy in the wrong district (like R-1A or R-2A), and you’re sitting on a non-cash-flowing vacation home. Buy in the right district, and you’ve got a forever STR.

Then you’ve got markets like Taos, NM, and Beaufort, SC, where caps limit supply. Taos only issues 120 permits citywide, and Beaufort caps STRs at 6% per neighborhood. Both rules sound scary, but think about the moat they create. Fewer permits mean less competition, which means higher occupancy and pricing power if you already have one.

The Northeast is a mixed bag. Hudson Valley, NY, yields 12%, but only if you follow owner-occupancy rules and zoning. Camden, ME, limits licenses, and Rockport, MA, punts to statewide registration and taxes. In other words, you can make money in all three, but you’ve got to accept the paperwork as part of your underwriting.

Some places in this tier are more niche. Eureka Springs, AR, banned new STRs in residential zones, which caps growth but protects existing operators. Deadwood, SD, only really makes sense if you’re capitalizing on the Sturgis Motorcycle Rally (which takes place in August) or outside city limits. Whitefish, MT, requires you to buy in the correct zone. If you can live with those quirks, the numbers hold.

Investors should view these towns in the same way they would a property with deferred maintenance. The bones are good, but you need to manage the risk to unlock the value.

Big budget

This category is where the numbers stop making sense from a pure cash flow perspective.

Jackson, WY, is the classic example. Homes average nearly $2M, and even with strong nightly rates, your yield barely breaks 4%. Add in the three-stay/60-night cap in residential zones, and you’re essentially buying bragging rights, not cash flow.

Carmel-by-the-Sea, CA, tells a similar story. Beautiful town, insane demand, but STRs are banned in R-1 zones. Unless you’re sitting on a legal nonconforming unit, you’re looking at a $2.3M home that doesn’t cash flow.

Snowmass Village, CO, appears more lucrative in terms of revenue, with $130K annually, but again, with $2M home prices and heavy permitting, your yield is only 6%. Fine if you want a ski house that pays its bills. Not great if you’re trying to scale.

These aren’t cash flow plays. They’re trophy assets. You buy here for appreciation, for legacy, or because you can afford to. For most investors, these are “look but don’t touch” markets.

Don’t invest

And then there are the markets where the math might look OK, but the rules basically shut the door. Most will still allow STRs in specific commercial zones or outside city limits, but you never know when they will crack down even more.

Portsmouth, NH, is the clearest: STRs are illegal in residential zones, full stop.

Paia, HI, and Magnolia Springs, AL, both have moratoriums in place. That’s the government telling you they don’t want you in their market, for now.

Cannon Beach, OR, is a case study in how to strangle a market: Limiting stays to once every 14 days results in a collapse of occupancy. On paper, the yield is 8%. In reality, you’re running half-empty.

Friday Harbor, WA, has a 337-permit cap and a moratorium on new applications. That’s a closed shop unless someone else gives theirs up.

This is the category where you look at the numbers and think, “Too good to be true.” And in most cases, you’d be right.

Final Thoughts

What this list really shows is that you can’t invest off yield alone. The 31 prettiest towns in America aren’t necessarily the 31 best STR markets. Some will make you rich. Some will make you crazy. And some won’t let you in at all.

As an investor, you’ve got to underwrite not just the property, but the politics. Rules change. Caps get enforced. Moratoriums pop up.

If you’re already in one of these markets, you’ve probably got a moat. If you’re trying to get in, the best plays are in the “Tough but possible” and “Potential” tiers—places with demand, strong yields, and rules that create barriers to entry rather than brick walls.

Source link

In News

Less Risk, More Cash Flow

August 25, 2025 No Comments

The BRRRR method (buy, rehab, rent, refinance, repeat) was, for a few years at least, the real estate investor’s golden ticket to a million-dollar portfolio. It allowed investors to buy properties, fix them up fast, get their down payment money back, and recycle it. This created an “infinite” investing loop where someone with one down payment could turn it into five (or more) separate houses. But with high mortgage rates, the BRRRR method was thought to be over by many…until now.

We’re introducing a new BRRRR strategy. It’s safer, with less risk (and stress), makes you more cash flow than before, and keeps your leverage lower so you don’t go underwater in a housing correction. Does it work? Dave and Henry are both using this new BRRRR method right now—and doing quite well, we might add.

You (yes, you listening to this) can also use this new BRRRR method to buy houses, increase their value, get higher cash flow than regular rentals, and then recycle the money you put into the property to use toward your next investment. You can invest faster, but with lower risk than before, and scale your real estate portfolio the right way, so if interest rates rise, it might not even matter for your bottom line!

Dave:
Do burrs still work in 2025? It’s been one of the most tried and true investing formulas over the last couple of years. You buy property, you rehab it, you rent it out, then refinance your cash back out and you repeat the process. But with higher home prices and higher interest rates today, some people see the burr is dead. Today we’re making a ruling on that question. Hey everyone, I’m Dave Meyer, a rental property investor and the head of real estate investing here, epic or Pockets, and with me today on the podcast is my friend Henry Washington. Henry, how’s it going?

Henry:
What’s up bud? Glad to be here.

Dave:
I’m glad to have you because I saw this question on the BiggerPockets forum and I wanted to break it down with you specifically. You’ve done a lot of burrs, right?

Speaker 3:
Oh yeah.

Dave:
Good. I figured you have to are the right person to help me break this down. I’ve also done several burrs in my investing career. I think it’s a great strategy, or I should say it has been a great strategy for me in the past, but we’re going to talk about if it’s still a great strategy going forward. So a community member posted on the BiggerPockets forums, community member named Kyle Asked and a quote, I’m curious what people are seeing for leverage on Burr acquisitions. Has anyone successfully acquired Rehabbed and Refied a deal with less than 20% of their own cash in? I’m not trying to over-leverage just exploring what’s realistic in 2025. So let me just explain this question a little bit, and Henry, feel free to jump in here. Kyle is referring to the B strategy, which if you’ve never heard it before, it stands for buy, rehab, rent, refinance, and repeat.

Dave:
It’s basically an approach to real estate where you’re buying a rental property, that’s the B. Then what you’re doing is rehabilitating it. That’s adding value. You’re taking a property that needs to work. You’re putting that love and that effort into it to boost your equity. Then once you’re done with that project, you rent it out to new tenants. Hopefully you hold it up to market rents and are generating good cashflow and at that point you refinance. So you can take some of the equity that you have built in this property, some of the equity that you’ve put into this property and use it for future acquisitions. That’s the last, the repeat part of it, and this has become a very popular strategy over the last 10, 15 years because it’s a great way to scale your portfolio If you’re able to execute this in a short timeline.

Dave:
You can do a renovation, build equity, get a cash flow rental, and then have the same amount of money to go buy the next one. But as interest rates have gone up, properties have gotten more expensive, it’s gotten a little bit harder. And so what Kyle is asking is, is it still realistic to be able to use the birth strategy to grow and scale or perhaps is there a better approach that people should be using? So it’s a question you should be asking right now. So anyway, I’m just going to ask you, have you done this?

Henry:
Yes, I have done this, but the caveat is as far as a real estate investor goes, I would consider myself a professional real estate investor as what I do for a living and finding deals is what I specialize in. And so for someone like me to say yes to that question doesn’t mean it’s a viable strategy for most casual real estate investors, if that makes sense.

Dave:
It does. It’s important to point out, and one of the reasons it’s great to have you here is Henry does this full time. He’s acquiring deals all the time. He’s doing off market deals, he does heavy rehabs. What he can accomplish is totally different from what I get and what I look for because I work full time. I’m not someone who’s going to job sites every day. I’m not doing direct to seller marketing. So I do think this is perfect. We can have two different perspectives on this. So maybe let’s start with you and I’ll tell you my side of things. For you as a professional, is this normal or are you getting these, but not every deal, pencils out this way. So

Henry:
It was a whole lot easier to find deals to bur three years ago. We still find them now, but less frequently. Flip numbers tend to make more sense in this market than rental numbers, but because we’re looking for deals in volume and we’re finding deals in volume every so often, we get one that makes a great burr and then I think you have to put some parameters around burr, mostly like a timeline because you can buy renovate rent and then refinance in a short period of time, or you can do it in a much longer period of time. I’ve refinanced multiple properties this year and pulled cash out of them when I bought them three to five years ago and I just put them on adjustable rates and that adjustable rate now came due. I refinanced it into a 30 year fixed and pulled cash out, and those long-term burrs are still burrs

Dave:
Heroin. That’s a great point. I think that’s a really important caveat. I’ve been calling it the delayed burr or people in YouTube gave me new ideas, what to call it. I suck at this, but I couldn’t come up with a better name of it. We’ll call it the delayed burr, but I think there’s two different things that you can do. One thing I’ve been doing is delaying the renovation. You buy something that’s actually fully occupied rather than vacant and not trying to do the burr on this flip timeline because as you said, there is this approach to doing the Burr method, which is like, I’m going to do this in six months or whatever. I’m going to get in there, I’m going to renovate it quickly. I’m going to get rents up to market rate, then I’m going to do this cash out and I’m going to go acquire the next deal really rapidly, and that did work really well for a while. I think it’s hard to line up two deals like you’re saying. I can’t do it right now realistically, but even you, Ken, it sounds like it would be hard to even line up to burrs in that timeframe where it would even be advantageous for you to even do that. And so what you could do is either take the more delayed approach, which is getting the occupied and opportunistically renovating when there’s time or doing the renovation upfront, but not refinancing until you need the capital. I’m actually looking at refinancing a deal I bought

Dave:
Six years ago because it is cashing will, but I think that there’s going to be good deals coming and I’m seeing more deals coming and I just might want to free up some capital and so I’ll just do the refinance, but it’s way later.

Henry:
Yep. I think when Burr was originally pitched, it was pitched as a way to scale a real estate business because you could line up back to back burrs and you could repeat this process and you can still repeat it. I think the timeline for the normal investor is just going to be longer.

Dave:
I think that’s right. There is this assumption in this question, and I ask this question all the time, I’m sure you do too, like do burr’s work? Is it dead? There is this assumption that the only reason to do a burr is that you can refinance a hundred percent of your capital

Henry:
Full bur you got a

Dave:
Full burr, right? Exactly. You need the quote perfect burr or full burr, but that is not that common. Maybe if you’re doing Henry’s kind of deals and you’re in the right market at the right time, that can be common, but I think if you just reframe the conversation and don’t assume that you need to take a hundred percent of your capital out, then I would say Burr is absolutely still a way to grow your business. You’re still able to refinance some of your money out and you’re buying ideally, if you’re doing it right, a cash flowing rental property that you have built equity in, you’re getting some of your money out of it to go scale. Again, that’s still a win, even if it’s not perfectly super, a hundred percent recycling of your capital like it was for that brief moment in time.

Henry:
Can I give you a hot take?

Dave:
Yes. That’s why you’re here.

Henry:
Even when burrs were easy to do, I didn’t really like doing that.

Dave:
Really why?

Henry:
I didn’t like pulling my cash out. I liked the cashflow.

Dave:
That’s the other thing. Yeah.

Henry:
When you refinance a deal, what’s essentially what you’re doing is you’re getting a new loan at a higher amount, and that new loan at a higher amount comes with a mortgage payment, and that mortgage payment is going to be higher than the previous one because now it’s a higher mortgage. When you get a new mortgage, they front load the interest in the first five to seven years,

Henry:
And so most of your payment is going to interest, and so you put this money in your pocket and a lot of people, especially the casual investor, may not have had the next bur lined up, they pulled the cash out of their last bur and then they blow a chunk of it before they get to their next deal, and then that it kills the purpose. What I was doing and what I still like to do is instead of refinance, I just get access to a line of credit on that equity, and then that way I don’t get a new loan at a higher amount. I keep my lower mortgage payment, which keeps my cashflow, and then I have access to the money in the event I need it instead. Just pulling it out and starting to pay on a new loan and then not spending that money wisely.

Dave:
Yeah, because a great point. If you don’t immediately reinvest your capital that you pull out, you’re essentially just reducing your cashflow for no

Speaker 3:
Reason, right?

Dave:
That to me is a really important thing. All right. This is a great conversation and we have a lot more of it, but we do have to take a quick break. We’ll be right back. They say real estate is passive income, but if you’ve spent a Sunday night buried in spreadsheets, you know better. We hear it from investors all the time, spending hours every month sorting through receipts and bank transactions, trying to guess if you’re making any money, and when tax season hits, it’s like trying to solve a Rubik’s cube blindfolded, but that is where baseline comes in. BiggerPockets official banking platform, it tags every rent, payment and expense to the right property and scheduled e category as you bank, so you get tax ready financial reports in real time, not at the end of the year. So you can instantly see how each unit is performing, where you’re making money and where you’re losing money, and then you can make changes while it still counts. So head over to baseline.com/biggerpockets to start protecting your profits and get a special $100 bonus when you sign up. Thanks again to our sponsor baseline. Welcome back to the BiggerPockets podcast. I’m Dave Meyer here with Henry Washington talking all things bur in 2025, and I also think what you brought up about HELOC people should take notice of. It’s not the only option for Burr. It’s not the only option. I think Burr can work for people. I’m not saying it’s not good, but there are other ways to pull out equity. Like Henry said, maybe you can explain to everyone the HELOC approach and just reiterate who that might work for and who it might not work for.

Henry:
Let’s assume you buy a property, you renovate it, you rent it out. Now you have this option. I can refinance it and pull cash out, whatever I put into it, maybe plus some and then I can go do my next deal. Or you can get a line of credit and the way the line of credit works is similar to a refi, if you go into a refi, whatever bank you’re going to do the refi with is going to appraise that property and then it should theoretically appraise for more than you have into it. So for more than you’ve purchased it, plus you put into renovate. So if you bought it for a hundred, you put 50 in it and it appraises for two 50, you should be able to refinance all of your money out because that appraisal value is higher than typically what they want, like 75%, 80% loan to value.

Henry:
And so you should be able to pull all of your money out. The HELOC method is very similar. You would just go to a bank and say you want to take a line of credit out on the equity you have in your property. That lender would then order an appraisal. Let’s say the appraisal comes back at 250,000. The way the line of credit would work is they will give you access to 75% of the equity. And so if the appraisal comes back at 250,000, you bought it for a hundred, you put 50 in it, you owe one 50. That means you technically have about a hundred thousand dollars of equity, and if they give you access to 75% of that equity, that means you should get a line of credit for around $75,000. And then what the way that line of credit works is you don’t pay anything interest wise as long as you haven’t used any of that money.

Henry:
So now what that means is you now have access to that money, so if I need that money tomorrow, I can get access to that money tomorrow. I can just tell the bank, Hey, I need access to $20,000 for a down payment for a property. They literally drop it in your account that same day, and so you have liquidity because you have access to that money, but you don’t have to pay any interest on that money unless you use it and you only pay interest on the money you use. And so if I have access to 75 but I only need to use 25 and I have a 6% interest rate on that heloc, that means I’m paying 6% interest on the $25,000 that I have taken out of my line of credit. If you refinance it, you’re essentially paying interest on all of that money immediately because it’s rolled into your monthly payment.

Dave:
Yeah, it just gives you optionality, which is a really nice thing, especially if you don’t know exactly what deals you’re going to use next or how you want to use the money. Sometimes you might want to use it to fund a down payment, but other times you may want to use it to fund a rehab or do something else with the money.

Henry:
And again, when we’re going back to looking at the times when people were really loving the B strategy, a lot of people were using short-term loans to get into properties, and so they would use something like hard money or private money with a high interest rate to buy that property and renovate that property, and so then they’re left with only one option is you’ve got to refinance that to pull that cash out and pay back those lenders because you don’t want to be stuck in a note with a 12 or 13% interest

Dave:
Rate. That’s exactly right.

Henry:
That strategy is much tougher now because it requires you to find a phenomenal deal so that you can complete a full bur, and I think if you’re just a casual investor, that’s something you need to be cautious of a hundred percent. If you’re going to buy a property, you can find a property to bur, but you got to be careful how you purchase it. You probably don’t want to use high interest money to get into the deal because what if you don’t get that appraisal on the back end? What if your value doesn’t come back what you thought it was? Now you’re stuck in a loan with high interest that you can’t get out of unless you pour even more of your own capital into that refinance.

Dave:
That’s such a good point. The longer I am in this industry and do deals, it’s like the debt is really what tells you it’s a killer. The debt is basically, yeah, if you succeed or fail on a deal is so much how much you choose to finance strategically, but what Henry said is so important. I’m just representing this sort of casual investor and I do a fair amount of deals, but I work full time. I’m not going out and doing what Henry is doing, and as someone who does that to me, I really like optionality. I don’t like putting myself in a situation where I have to go refinance this or I have to finish a renovation in six months. I have other stuff to do. I can’t be on that kind of timeframe, and so that’s why I sort of like this delayed burr.

Dave:
If you do this thing where you get an occupied home, you can typically, in my experience, always get a conventional mortgage on it, and that’s so valuable. You still have to put 25% down if you’re an investor, but you can go get a six and three quarters loan in today’s day age, maybe a 7% loan. In today’s day and age, I would only buy that deal if it cash flows like that. Day one I buy at 7% conventional loan with the current rents, they would need to be cash flowing. I need this to be at least positive cashflow. It doesn’t need to be great cashflow. I think that’s sort of the thing that Henry and I were arguing with James about on odd the market the other day, but I would buy that at 2% cash on cash return knowing that the rents are under market rate and that when my tenants choose to move out, I’m going to renovate that and I’m going to get it up to an eight or a 10 or ideally a 12% cash on cash return. That’s what I’m looking for. I’m okay if that period of stabilization takes me a year, I’m fine with that because I have that six or 7% interest rate. That is the difference because I’m building equity, I’m getting the tax benefits, I’m doing all that, but I’m not under pressure to go refinance some hard money loan that I would’ve gotten if I was going to try and do this sprint bird that Henry’s talking

Henry:
About. You know what that’s called, what you just described, what it’s called, real estate investing.

Dave:
Yeah, exactly. No, it’s a bird. This is just like bread and butter boric. I say

Henry:
That as a joke, but it’s a testament to how spoiled we’ve been to have gotten in the game.

Speaker 3:
Yeah,

Henry:
That’s right. For me, I got in the game in 2017 and in 2017 things were about to get great in 2020, right? COVID aside, what it did for real estate was crazy, and so you didn’t have to put as much thought. I know that sounds bad, but it’s true. You didn’t have to put as much thought and strategy into real estate investing because the market was going to save you. If you just bought something and you waited for a little bit, you were going to be in a better position, and so you didn’t have to be as strategic. You didn’t have to plan out a long-term burr. You could just do it in three to six months and you were going to be great. Now, the market is requiring more of us. The market is requiring us to be more educated. The market is requiring us to be more prepared before we jump in because the market’s not saving you anymore. You’ve got to save yourself with your strategy. You have to save yourself with your planning. You have to save yourself with understanding how to pivot, and you have to save yourself with managing your portfolio throughout its lifecycle. Those weren’t things you really had to pay attention to before because you would just go, yeah, my portfolio is good. It was good back then. It’s better now. Keep on trucking. It’s not that way

Dave:
Anymore. Oh, it’s been a week. It’s worth 5%.

Dave:
Everything’s going well. I think what you’re saying is so right. What we need to do as an industry is a shift of expectations. It’s not like real estate is no longer good. And the reason I liked this question in the forums that I wanted to bring in and talk to you about is Kyle is asking, what should his expectations be in 2025? And that’s a great question that everyone should be asking themselves because so many folks are comparing to 2020 and saying, oh my God, you can’t do Burr anymore. It’s like, well, you could buy a lot of deals right now that will improve your financial situation a lot. That will really help you in my opinion, more than any other asset class. Is it going to help you as much as this Goldilocks period in 2020 when every damn thing went right for real estate investors?

Dave:
No, and that literally may never happen again. I know people are say, oh, rates are going to go down. It’s going to go crazy again. I don’t know. I don’t think it might never happen again in our lifetimes. I really mean that, and that’s fine. I’ve said this before, but I really mean it. We didn’t have those conditions in the seventies, the eighties, the nineties. Real estate was still a great business. People still made money. They just had appropriate expectations and adjusted their strategy accordingly. And that’s why when I’m talking about this delayed bird, it might sound like super boring to people, but this is just bread and butter.

Henry:
It’s just real estate, bro.

Dave:
Super low risk. High still is a high upside. It’s just bread and butter, not doing anything fancy.

Henry:
I go to these conferences all across the country all the time when I get asked to speak, and inevitably a hundred different people who are there, whether they know me or not, they’ll say, oh, so what do you do? And I always like, it’s always I buy houses and then I fix ’em up and I either rent it out or I sell it, and then I was like, oh, that’s cool. I’m like, yeah, yeah, it’s super boring. I just do regular boring real estate. I’m not doing some fancy boutique hotel. I’m not doing some $4 million short-term rental. I’m not buying things on some super creative fancy financing strategy that’s brand new. I just buy houses and then I fix ’em and then I rent ’em or I sell ’em, and that’s worked long before I ever invested in real estate, and that same strategy will work long after I’m done investing in real estate, and I am a okay with that.

Dave:
Well, I want to get back to the bird thing here. You mentioned something earlier that I think is a super important topic. You said that you weren’t a fan necessarily the burr even when it was sort of this perfect time to do it because it reduces your cashflow, and I honestly have thought about that too, and I’ve done that in the past when I’ve refinanced a burr or just a property I haven’t owned for a while, whatever, when I’ve refinanced, I don’t always take out max leverage.

Henry:
Yes, I don’t either.

Dave:
And that was even true during a time when people were benefiting from max leverage. And what I mean by that is a lot of times when you refinance property, if you go and do a bur basically you’ll have to leave a certain amount in, you’re getting a new mortgage, and so you essentially have to keep an amount in that is equivalent to what a down payment would be for most investors. That’s 25% down. If you refinance it, it gets appraised at $400,000. You have to keep a hundred thousand dollars in equity into that deal. Of course, you have to pay off your own mortgage, but during this process, the bank will tell you the most amount that you were able to take out. So let’s just use a nice round number here and say they have the option to give out a hundred thousand dollars.

Dave:
So if you wanted to max your leverage, basically what you would do is keep that a hundred thousand dollars in and borrow $300,000. You’d take 200 of that to pay off your own mortgage and 100 you can walk away with. Now, you could do that, but of course borrowing $300,000 instead of borrowing $200,000 has implications for your cashflow, right? That is going to reduce your monthly cashflow. It also increases your risk a little bit. Now, I don’t think putting down 25% is a huge amount of risk. That’s like an appropriate amount of leverage, I think in most cases, but it does increase your risk when you do take out more leverage. As Henry said, it restarts your loan. And so what I’ve done in the past is often leave 30, 35, maybe even 40% in instead of taking out max leverage, and that does mean that I won’t have as much capital to go buy the next deal or to fund the next renovation, but to me, it preserves cashflow, which is my long-term goal as an investor. It is not my immediate term goal. I’m not trying to maximize my cashflow today, but by leaving 30, 35%, it gets me closer to my long-term goal, which is to fully replace my income with real estate.

Henry:
Yeah, absolutely. You keep your cashflow, and again, it’s not like you could never access that money in the future. If you had to go get a line of credit two, three years from now to access that money, you could. I mean, it’s there. The value’s going to be there. Your real estate portfolio is not going to tank 50 to 75%. It is going to be there. It’s going to be more in the future, so you can still access it later on if you need to.

Dave:
That’s so true. It’s funny, I had a similar experience when we were on the Cashflow Roadshow. I was talking to an agent in Madison, Wisconsin. I was talking about doing a cosmetic delayed kind of bur there stuff that I like to do, and I was like, is this going to work in this market? And he was like, I don’t know. It’s pretty tight because I want a certain amount of cashflow if we’re can go buy the deal. He is like, I don’t know, and I was like, well, what if I just put left 35% in the deal and his face lit up? He was like, you would do that? And I was like, yeah, of course I would do that. Why? I get that some people want to recycle a hundred percent of your capital. I’m further in my investing career, so I have different perspective here. But he was like, oh my God, yeah, I could find you those deals all day. And I was like, yeah, okay,

Henry:
Wait a minute. So you’re telling me as a real estate investor, you are willing to invest your money in your D?

Dave:
It’s such a good point. I’ve never even thought about it that way. It’s like, oh my God, you actually have to keep your money tied up in this investment to make money. Yes, that is possible, right? So yeah, the tone of the whole conversation changed. I was like, oh, yeah, I’ll leave 30% ed. I’ll move 40% ed to make this deal work if this is a great asset that I want to hold on. If it was something I was trying to get rid of in a few years, which is not something I really do, I would think about this differently, but I approach all of my real estate acquisitions with that lens. Do I want all this for 10, 20 years? Then yeah, I’m willing to keep 30% into it to make this cashflow and to hold onto this awesome asset for sure. All right. Well, let’s take a quick break, but I want to leverage your expertise while you’re here, Henry, and just talk about if people want to do a burr, how do they do it as best as they possibly can in 2025? Let’s talk some tactics. We’ll get into that right after this quick break. We’ll be right back.

Dave:
Welcome back to the BiggerPockets podcast. I’m Dave Meyer here with Henry Washington talking about burrs in 2025. Henry and I just ranted about burrs and who they’re right for how to make ’em work. I still think that these, especially if you have appropriate expectations doing a renovation, do you want to call it a burr? I don’t care if you want to do a value-ad project and eventually refinance it, whether that’s quick or slow or however you want to approach those two things if you want to do that. Henry, do you have any tips for 2025 how people should be approaching it?

Henry:
Well, yeah. First of all, you definitely have to know your buy box because this strategy is going to require you to have some knowledge about your market and knowledge about what you want to buy because you have to be able to go and find that deal at a price that’s going to allow you to pull off your burr in the timeframe you want to pull it off in. So if you want to pull off a burr in six months, like the quick burr like we talked about before, the discount you have to buy that property at is much deeper than you have to have a strategy for exactly what to go look for and how you’re going to look for it. Are you going to spend money on marketing? Are you going to spend time on the MLS? How are you going to generate the leads and in a timeframe enough that’s going to allow you to find a deal at a deep enough discount to pull it off in the short term If you want pull it off in the long term, you have to understand your buy box and understand your market from the perspective of knowing or having a good idea of what is a typical equity increase year over year in that market?

Henry:
What are the typical rent increases year over year in that market? And then what is your current cash on cash return that you’re looking for? Because then that helps you go and pinpoint and run numbers on deals, specifically in deals that are probably on the MLS. It will help you weed out the properties, so now you can look at a handful of properties that may potentially hit your number because some neighborhoods may increase in value more than others. Some zip codes may increase in value more than others, so in one neighborhood you may be able to buy a property at X, Y, Z price point, but in another town or another neighborhood, you may have to pay a little more, right, or you may be able to pay a little less. So understanding your timeframe, if you’re like, Hey, I want to refinance this thing in five years, I need it to come close to breaking even now, and then you can look in your market and say, okay, well, in my market, typically two to 3% of a value increase year over year, and you can do that calculation to figure out, if I bought this property for this price, this is what I would expect it to be worth in the future.

Henry:
Plus, if I do the value add that I’m looking to do, I expect that it’ll add this much value, and so that means I can offer X for this property. I hope that kind of made sense. You have to understand what it is you want to buy, where you want to buy it, and where you think the market’s going, so you can buy the property at the right price point to execute your strategy in the future.

Dave:
Well said, totally agree with that. I’ll just add one other thing, and this is just my advice to everyone all the time right now, so just you’re going to hear it again. Sorry everyone. It’s just conservative underwriting right now. I think we got into this era where people were taking the max comps and then they were assuming that they were going to be able to get this appraisal that was going to work out really well for them. Right now, the market could turn instead of counting on appreciation, you could in 2020, you could probably count holding a property for six months, probably two, 3% appreciation that matters on a $400,000 purchase. That’s 12 grand in equity that you’re building for doing nothing. You can’t count on that, and in fact, I recommend people sort of count on the opposite happening. You’re just seeing across the country, it’s different in every market, but a chance that property values in your six months might drop 1%, they could drop 2%.

Dave:
I don’t think there’s a crash, but if you are counting on that equity, you really want to be conservative about that and make sure that you’re assuming. I would say at best, assume flat. If you want to be a conservative investor like I am, I would say just count on going one to 2% below. That’s a way to still invest during a buyer’s market like we’re in and be confident. If you are accounting for that, your deal’s going to work out because you’re just taking the risk out upfront in your underwriting and your deal selection. That’s kind of the really important thing for you to do. I just say the same things about rent. I do think rents probably in the next year or two are going to start accelerating again, but I wouldn’t count on it. I would just assume that that’s not going to happen.

Dave:
I would, as Henry said, and always caution, Henry is very adamant about this point all the time. What she should be is having the multiple exit strategies too. What happens if you don’t get the appraisal? Can you still hold onto it? Is it still okay? Those are the kinds of things in this kind of market, it makes sense to be defensive. It makes sense to protect the downside, so I think there’s still absolutely upside. I would still buy bird deals. I’m still looking at them all the time, but I just underwrite them in a way to protect myself.

Henry:
I think what we’re both saying is the strategy’s going to require you to look at a lot of deals and probably make a lot of offers and probably hear a lot of nos. Both Dave and I have different strategies for finding deals, but I can tell you one thing. We both analyze a lot of deals before we actually end up getting one,

Dave:
But that’s the fun part. I love that part.

Henry:
Yeah, me too, because I’m a deal junkie, right? But even though your strategy doesn’t cost you money, and it’s fairly, air quotes, easy for you to get deals across your desk, you still look at a ton before you’re actually pulling the trigger on offers on some, and the same for me. I generate leads, I spend money to generate leads, and I analyze a ton of deals, and I make a ton of offers before I get a yes. That amount of work doesn’t change based on the strategy that you do. There’s very few investors in this world who just a deal pops on their desk and they buy it because if they’re doing that, they’re not investing for cashflow. They’re just investing. They need to save taxes somewhere and throw a bunch of cash at real estate. We have to analyze a lot of deals.

Dave:
That’s the job. That is literally the job. The investor is to go do that stuff. All right, great. Well, this was a lot of fun, Henry. Thanks for being here.

Henry:
I love talking about this topic. It pushes a lot of people’s buttons when you start, oh, they’re still talking about Bird 2025. Look, man, just be easy on what you think a bird is. If you think it’s the strategy where you can spend very little money and refinance your deal in 90 days, you’re right. That’s dead. That’s very uncommon, but doing a successful Burr project can be done in a lot of markets across the country. If your expectations are more realistic,

Dave:
Absolutely, let’s just call it the value add cash out. You decide the timeline, but what you’re doing is buying an asset that is not up to its highest and best use. You’re adding value, and then at some point you’re cashing out a little bit or you’re taking a HELOC out on it. Like Henry said, adding value, building equity and then leveraging that equity you created either through a cash out or a heloc, you can do that. That is the game, but that is real estate investing.

Henry:
That is called real estate investing folks.

Dave:
Yes, you could absolutely still do that. One last thing. This is kind of a new format that we’re doing on the show where we’re taking one question. Henry and I are doing a deep dive just sharing our personal experiences around it, but also just our opinions about it. We’d love to know if you like this format, so if you’re watching this on YouTube or if you are watching on Spotify where you can make comments. Now, don’t know if you know that, but Spotify, you can make comments on specific episodes. Let us know if you like this format and we’ll do more of them. Thank you all so much for listening to this episode of The BiggerPockets. We’ll see you next time.

Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here. Thanks! We really appreciate it!

Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected].

Source link

In News

We Sold Our Home and Lived in an RV to Invest (It Worked!)

August 25, 2025 No Comments

Real estate investing isn’t always pretty. Today’s guests had to make some serious sacrifices to buy their first investment property—living out of an RV, with a newborn, in the middle of winter. This bold move not only made them $180,000 on their first deal but also helped them snowball to five properties!

Welcome back to the Real Estate Rookie podcast! Nichole and AJ Frandanisa sold their house to start investing in real estate. But not only that—they bought a rundown property and lived in an RV while doing their first live-in flip. This gave them the confidence (and the money!) to buy more properties using this same investing strategy—putting low money down, adding value, and selling renovated homes for a huge profit. They’ve already completed five real estate deals and are now moving into multifamily properties to build wealth even faster!

In this episode, you’ll learn how to get your spouse on board with your real estate investing dream, as well as how to use various negotiation tactics to get a better deal—especially in this market where buyers have more leverage. You’ll also learn the secrets to building your investing network, finding top-notch contractors, and keeping great tenants!

Ashley:
Today’s guests are AJ and Nicole Mortgage lender, agent live and flippers, house hackers and community builders. Their journey started in a snow covered RV with a newborn, and now they’re flipping full guts and scaling into multifamily.

Tony:
And today we’ll talk about living in a driveway with a baby getting robbed during a flip, and why their secret weapon isn’t a tool, it’s community.

Ashley:
This is the Real Estate Rookie podcast and I am Ashley Kehr.

Tony:
And I’m Tony j Robinson. And today we’ve got AJ and Nicole Fran Denisa joining us today. AJ Nicole. Super excited to have you both here with us today. Thank you for joining us on the podcast.

Nichole:
Thanks for having us. Yeah, thanks for having us.

Tony:
Now, for me as a father of three and having two under two, I have to ask right off the bat, how did you manage living in an RV with a newborn to make your real estate dreams come true?

Nichole:
Oh my goodness. I think that’s such a great question. We look back on that season and I go, how in the heck did we accomplish that? But really we look at our RV as our little guy’s first nursery, it was his house that everything from the front to the back was full of baby stuff, but it probably helped that it wasn’t all three of us living in the rv, I was in there with the baby. His name’s Wes. We like him a whole bunch, but AJ was basically never in the RV because he was remodeling our very first live-in, flip it in that we lived in the RV in the driveway, but we barely saw him. He came in to do a quick shower and he was right back out remodeling that house. That’s how we managed. What

Ashley:
A creative idea though, to remodel a house and instead of renting or living somewhere else while it’s being remodeled and it’s not livable yet to park an RV in there. Actually the live and flip I’m doing right now, it actually in the driveway there is a hookup for an RV that the previous owners must have had an RV here at some point or whatever. So this house, you could definitely do it, but tell us how you got to that point where what decisions were made, what was going on in life that you decided to buy this property and live in the rv?

AJ:
Yeah, we had bought our first home a couple years prior and then ended up selling that home when we got pregnant with Wes and realized that maybe that house wasn’t what we wanted for this next season of our life. So we sold that house and quickly had realized that we wanted to buy something that maybe we could make our own. We had investing in mind, but really the idea of this house was we wanted to make our dream home, if you will. We had shopped and looked at homes for a little while, ended up finding this one on the market with our agent and ended up getting that house ultimately and really getting to make it our own at that point, like you said, for the purpose of really kind of making it our dream home to raise our son.

Tony:
Now let me ask guys, I mean, why go with such an extreme version of a project for your first one with the baby on the way, what was it that made you say, Hey, this is the right move for us at this time of life?

Nichole:
I think honestly, Tony, it was probably a whole bunch of ignorance and not knowing what we were going to get ourselves into. AJ had been listening to the BiggerPockets podcast for a few years by this point, and his vision for our family was to invest. And so he saw an opportunity to buy something that needed some love, fix it up, maybe live in it for us, but maybe sell it in the future. And for some of that equity, I had no clue what he was doing in the background. I thought we were coming in like Chip and Joanna Gaines and we were just going to make something pretty and love it forever. But AJ definitely had a larger vision for our family that went even beyond that one house. That one house set us up for the rest of our investing since

Tony:
Then. Nicole, I appreciate you sharing that, but I guess let me ask the question specifically to you. You said it was initially AJ’s vision, obviously there’s two of you, right? How did you get on board with this vision that AJ had kind of built for the family?

Nichole:
Yeah, this is one of our favorite topics to talk about because investing as a husband and wife, we recognize as a rare adventure. We know a lot of investors that invest on their own and their spouse is just kind of a along for the ride or maybe operates in lieu of or is like, you do your thing and I’ll be over here. It was really important to AJ that I was on board. So we talked about the BiggerPockets podcast and he said, Hey, I think you’ll like this one episode. It’s mostly about leadership and not about real estate, and I was really into leadership at the time, and so really he just hacked my brain by infusing some media into my life. So I turned on that one episode of BiggerPockets and we never turned it off. And that is what changed my whole perspective from, hey, my roof and my home is my safe place to my roof and my home is probably my launch launchpad for wealth building and the future of our whole family’s vision.

Ashley:
We’re going to have to charge the BiggerPockets podcast and revenue. It was rookie

Nichole:
Podcast. It was pre the

Ashley:
Rookie

Nichole:
Podcast.

Tony:
But Nicole, I think you just answered a question that a lot of rookies who are listening right now probably have of how can I get my spouse on board? I’ve been the one that’s been watching the podcast on YouTube and listening to the books and doing all these different things, but my spouse isn’t there yet. But what you said was AJ found a path that wasn’t even necessarily about real estate but was related to something that was of more interest to you. And I think that’s maybe a bridge that a lot of us can try and cross to get our spouses on board where maybe we’re not necessarily talking about, Hey, do you mind if we move us and our newborn baby into an RV and park in front of this house that we can’t live in and try and turn this into some sort of investment. Maybe not the best way to do it, but hey, let’s start with the podcast about leadership that I know my wife might be interested in and let it build from there. So I just love that you guys were able to come together and find a path to do it in a way that made sense for both of you.

Nichole:
Yeah, it’s our superpower. We both have what we bring to the table in our investing and we call it our lanes. AJ stays in his lane what he’s really, really good at, that’s contractors looking at the property, determining comps and rv. Those are his superpowers. My superpower has always been relationships, spending time with the homeowner of the property, getting to know people in the investing community and building our connections and staying in our lanes as a couple now and investing has been the thing that took us from where it started to where it is now.

Ashley:
And that advice goes to not even just if you’re a couple or in a relationship and you’re working on a deal or the business, it also goes to having partners in the business too. James Dard, he has always talked about that in his business. He is the brokerage side, the flip side, doing all that, and then his partner is the property management side and a couple other things, and they each have their lane. This is what they have basically control over, and what they do is when one doesn’t know what to do or whatever, then they go and they discuss it with the other person, but ultimately the one that’s kind of in charge of that has the final say because that’s the one who’s in the day-to-day of that part of the business and things like that. And I really do think that is great advice is to figure out what your roles are, your responsibilities and really take ownership of it, but you still have each other to lean on and you become the expert in that part of the business or whatever that role is. And so I guess what I want to know next is how did you end up with this flip with live and flip? What did the numbers look like at the end of it? And was it two years that you stayed there or longer?

AJ:
Yeah, we were there two years. We bought it December of 2018. Our son was born January of 2019, and then we ended up selling it in 2020 towards the end of the year. So we were there almost exactly two years from when we sold the house. I want to say we bought that one for 3 95. And then what did we end up selling that at six?

Nichole:
6 95?

AJ:
6 95? And we’d ended up putting around 120 grand or so into it from kind of beginning to end. And the initial brunt of that was most of it. We kind of got fatigued towards the end and we just ended, I mean, we lived in an RV for several months, I think we were in the driver for three, four months and we had a newborn at the time, obviously, so we wanted to get our newborn into his own room, and as he kind of progressed in his growing, and so we ended up moving into the house when it was about 95% done and still needed a little bit of work. And I remember just being fatigued from working all day, working all night on the house, working on the weekends, trying to get time together as a family, and I remember being fatigued and then we slowed down for a minute and just enjoyed what we had. And so we picked back up. It probably took us about nine months to really get back into the flow of finishing everything. So it felt like we kind of finished it and then sold it probably four or five months later, but at the end we were about 120 ish thousand dollars into it.

Ashley:
I think that’s some of the value of doing a live and flip as you really have the two years to do the projects. So you can create your own timeline, you could do it super fast, and so you get to enjoy it for the full two years. You could literally finish the day before you list it. You have lots of options, and I think that’s one of the best reasons to do a live and flip is because you’re on your own timeline within those two years or even longer. Worst case scenario, you live in the house a little bit longer, you’re still not going to pay capital gains on the taxes if you stay there longer. So yeah, I think that’s one of the values of doing a live and flip. Today’s show, it’s sponsored by Base Lane. They say Real estate investing is passive, but let’s get real chasing rents, drowning in receipts and getting buried in spreadsheets feels anything but passive.

Ashley:
If you’re tired of losing valuable hours on financial busy work, I’ve found a solution that will transform your business. It’s Base Lane, A trusted BP Pro partner Base Lane is an all-in-one platform that can help you automate the day-to-day. It automates your rent collection and uses AI powered bookkeeping to auto tag transactions for instant cashflow visibility and reporting. Plus they have tons of other features like recurring payments, multi-user access and free wires to save you more time and money, spend less managing your money and more time growing your portfolio. Ready to automate the busy work and get back to investing. Base Lane is giving BiggerPockets listeners an exclusive $100 bonus when you sign up at base lane.com/biggerpockets.

Tony:
Alright, we are back here with Nicole and aj. So aj, after you guys sold the live and flip, how did your strategy differ as you moved on to your next deal?

AJ:
Yeah, so it was really Nicole that kind of drove the selling portion of it. I had kind of grown to love this home and we saw the value of the equity in it, but it was kind of the first place obviously that I got to bring my son home to. And he’s took his first steps there and there was a lot of emotional kind of attachment to this house as a result of some of those pieces of our life that had changed. But Nicole had helped kind of me see the value of selling for the ultimate purpose of wanting to continue our investing. And so she kind of did this like, Hey, let’s just do the next right thing. And at the time she wasn’t an agent and the agent who helped us purchase the house, he came and he helped us value the house so that way we could kind of see what we could get in proceeds and seeing the numbers on the page at that point it was like, okay, obviously this is the more logical, this is the wise choice to sell it so we can take that capital and reinvest it and kind of set the emotional side of it to the side a little bit as a house that we loved.

AJ:
But doing the hard thing of selling that really helped us launch into what our ultimate goal was, which was to get into multifamily. And then that next purchase we had the funds to be able to purchase another primary residence this time, a duplex that needed a lot of love, and so we were able to purchase it low money down as a primary residence and then take a chunk of that capital and remodel it to add value and still have some money left over.

Tony:
Why did you guys opt for a small multifamily versus doing another single family home?

AJ:
Yeah, we wanted to house hack, so the goal was to drive our expenses down. We kind of at the time had started to form some family values and one of those family values was that we do hard things. We did the hard thing of living in the driveway. We did the hard thing of bringing a newborn home to an rv. We did the hard thing of live in flip and having a partially finished home. We did all those hard things. We didn’t want to compromise what we wanted most for what we want now. So we decided to go with a duplex so that we could house hack because we wanted to drive our expenses down so we could continue to invest. So by doing the house hack, obviously part of our mortgage is now going to be covered by the other side, but we also saw the value and value add, so we wanted to be able to find something that needed work so that we could increase the value of the property over time, kind of like what we did with the farmhouse.

Ashley:
So then you get to keep the property for two years and then you can sell it. So basically you’re doing a house hack and a live and flip on the property. Being able to add that value into it, you’re really combining strategies and maximizing the value of real estate investing. So with this property, what was it that you were paying a month to actually live there or were you cash flowing on it? Were they covering the whole amount of the mortgage? What did the numbers look like on this deal?

AJ:
Yeah, so on that particular property, we bought it for four 40. It had some things that needed to get repaired, and we used kind of a combination of getting some seller concessions as well as having some funds paid out to our contractor for some work. So we got a jumpstart on some of the work that actually needed to happen through an escrow holdback, so that way we didn’t have to come out of pocket entirely for the rehab cost. So we bought it for four 40. That one we put about 40 ish thousand dollars per unit into it. So we were in around $80,000 on the interior, and then we put a little bit of money about a year and a half later into the exterior. Oh, sorry, I’ll go back. I saw you point, I thought you nevermind. But yeah, we put about $40,000 per unit into us. We’re about $80,000 on the interior and then a little bit of money on the exterior about a year and a half later. And then on the rental side, it had room to go up. It was under market rents. I think at the time they were renting for about 1200 per side, and we were able to bring those up pretty significantly after we remodeled the units. And so I think our all in for what we were paying to live the room when we were there was right around $1,200 including utilities.

Tony:
And something you mentioned, AJ, that I want rookies to maybe get a better understanding of is escrow holdback. What is that and why was it helpful for you guys as look to rehab this deal?

AJ:
Yeah, so an escrow holdback is essentially proceeds from the seller if they’re going to give you something, so you have your seller concessions, maybe that’s them contributing to your closing costs or things like that, and an escrow holdback is something that’s getting paid out to a third party. So in this case, we had our contractor that was going to be getting paid and it was about 15 ish thousand dollars that he was getting paid in addition to what we were getting in some closing costs from the seller. And so essentially escrow is going to take a portion of those funds and then disperse it off to our contractor at the time for that work. And the same time that they’re kind of dispersing other funds to agents for commissions and the seller for their proceeds, they just have another bucket than they give money to whoever that person is.

Tony:
Yeah. Let me ask one follow up question because I know that there are limits on seller credits, but are there limits on this escrow holdback if I wanted the seller to hold back 10% of the purchase price if they wanted to, could they do that or are there also limits on how much can go into that holdback account?

Nichole:
It’s a great question. Can I speak to

AJ:
It a bit? Yeah, I was going to say it. I was just going to say I’ll let Nicole defer to that side. She’s an agent, so she gets to deal with that a lot more. Yeah,

Nichole:
So it’s my favorite tool when negotiating with sellers to use both of those, both seller credits and this holdback or this seller invoice. There’s two ways to do it. The escrow holdback is where escrow holds those funds after close until the work’s been done, and then they pay the contractor any remaining funds technically defaults back to the seller as their proceeds. So that’s how that one works. But what we really love to do in addition to this, we’ve done it several times with other projects too, is where the seller actually pays an invoice to our contractor at the time of closing. There is no limits on that amount. There is limits on escrow holdbacks, there’s limits on seller concessions, but there’s not limits on the seller paying an invoice. So the way this works is my contractor comes in and says, gosh, the kitchen’s going to be $40,000 to complete, and we’ve negotiated that the seller’s going to pay that contractor and that invoice, so the contractor gets paid at closing, they get paid upfront. This is where the risk is. Any Ricky’s that are listening to this technique, the risk is you’re paying your contractor upfront, so you have to have a really great relationship, rapport, and trust with that vendor, but you’re paying them upfront for the work right at the time of closing, and there’s no limits on that. It’s a really great workaround to leverage negotiations but still fit within the limits of concessions and escrow holdbacks.

Tony:
That’s fine. I’ve never heard of that before. That’s something new that I just learned in this podcast today, Nicole, so thank you for sharing that with us.

Nichole:
Of course. Yeah, and this particular duplex too, I think one thing that’s powerful about that particular property, if I can unpack it real quick, is we found this property on market. It was on market during a really hot spell in our local market, and we saw it and we saw the potential of it because the two reasons, one, the seller lived in the house, the seller had lived in one side of the duplex for 25 years, and it looked like they had lived in it for 25 years. The second was there was a giant fish painted on the front of this home, like a mural of a muskie or something like that was painted across this house. That’s our heartbeat behind our investing is if I can smell the house through the photos, I want to go see it. This is when everybody was wearing masks, but you wanted a mask on in this house.

Nichole:
And so we got to meet the seller as a part of that process. One, they had a really, really old agent. I’m talking like we were faxing documents back and forth, and she was difficult to get ahold of, and at some point she just said, how about you just go there and talk to the sellers? I said, no problem. That would be my preferred. But we got to sit down with the seller and figure out what they really needed, and they were stressed about downsizing out of this duplex into their rv. They were about to go into their RV season of life, and they just didn’t know what to do with all their stuff. And so we got to come in really quickly and go, how about we solve that problem for you? One of the other things that we love to leverage when purchasing is we go, Hey, seller, leave everything you don’t want. Take only the stuff you love and leave everything else. Let me take a giant barrier off of your plate on this idea of you moving out of there and let’s solve a really big problem right up front.

Tony:
Nicole, it’s so interesting that you share that story because we’ve heard a version of, I got a really good deal because I helped the seller figure out what to do with all of their stuff. We’ve heard a version of that so many times on the podcast from new investors, experienced investors, but I think the lesson for all of the Ricky’s that are listening is try and understand what the biggest pain point is of the seller. And obviously this is so much easier when, as Nicole said, you can go and have a conversation with them, but sometimes even you can get that information through your agent and their agent, but the more intel you have about why they’re moving, what their challenges are, what their biggest goal is, what’s most important to them, the easier it becomes for you to craft a deal that actually makes sense. So my mind is blown. I feel like this is deja vu because you’ve heard this so many times before.

Nichole:
AJ always says, I’ll steal your quote. Can I?

Tony:
Yeah, go for it.

Nichole:
You saw this one coming. I always steal his good stuff. AJ always says, you get paid in proportion to the problems you solve. And I think that is absolutely true when negotiating a positive contract for yourself and for the seller, the more problems you can solve, what a win for them, and the more problems you can solve, the better deal you’re probably going to get.

Tony:
One thing I want to go back to with the actual rehabs you guys are doing, because you’re moving in, you said 80 K on the duplex, 120 K on the first live and flip. How are you guys funding those rehabs? And maybe if we start with the live and flip, because we didn’t touch on that piece before the break, 120 K, were you just cash flowing that out of your day jobs? Where did you guys get the funds to actually complete the rehab?

AJ:
Yeah, so up until recently, everything we’ve done been with our own money. We hadn’t used hard money for anything. And I mean ultimately that probably kind of slowed a little bit of what we could have done and kind of seeing that now that we’re starting to dabble in that. But we had really just used proceeds. So we’d sold our initial primary house, got about 70,000 from that, had about 30 ish grand or so in the bank at the time, and then both of us made decent money at the time too, and so we just kind of bankrolled it ourself out of our own savings. We were talking about this, and there was probably about six months where we had less than 10 grand in our bank account at any given moment because we were just putting money into the house constantly. And so we just have rolled those proceeds. And so that first live and flip, we took the proceeds from that, rolled that into the duplex and remodeled it, bought another duplex. And so we’ve just been kind of bankrolling it ourself with proceeds and trying to multiply money to get more properties. And ultimately even now we’ve leveraged houses that we’ve sold to get money to flip that we then partnered with hard money to try to magnify what we can do a little bit.

Tony:
Yeah, I think it’s such an interesting approach because you’re getting all this money tax-free because you’re doing it as 11 flip, which then gives you a bigger chunk of cash to put into the next deal, which then gives you a bigger chunk of cash to put into the next deal, and it just kind of starts to snowball from there. So I guess, let me ask guys, are you currently doing a live-in flip?

AJ:
Yeah, we’re just wrapping up a live-in flip. So we bought it about two years ago and did all the interior moved in, and they’re just kind of finishing up the exterior now. We’re sidewalk away from it being done. So yeah, we’re just wrapping up one now and then working on an actual more traditional flip as well.

Ashley:
What’s the overview of your portfolio and the deals that you’ve done so far?

AJ:
Yeah, so far we’ve done two live and flip single families, two duplexes. One of ’em was much more of a value add. We had to do work to both sides and gut it and rebuild it. The other one, we ended up remodeling one unit that was in a little bit more disrepair and doing a little bit of exterior work, but the other unit was in decent shape. And then currently working on a single family flip.

Ashley:
Now for all the rehab and stuff you had mentioned you’re doing some work and you guys each have your own lanes that you’re working in. And Nicole, we’ll start with you. What are your roles and responsibilities in the business? Because you guys have tenants too. Are you guys acting as the property manager?

Nichole:
Yeah, we are. And it’s taken some time to figure out what our lanes are. We both did a lot, aj, a lot more, I’ll be honest, he swung a lot more hammers than I ever did, but your girl can paint some trim dialed. But now what it looks like today is that I support all of our property management when it comes to the coordination. We use a third party tool. We use rent ready to manage our tenants, help to onboard them, and we only have a couple handful of tenants. And it used to be that we didn’t want to know our tenants at all. I wanted it to be strictly business. And now the landlord tenant temperature has changed in our state in Washington state. And so now it’s the opposite. I want to know my tenant. I want them to sit next to me at church.

Nichole:
I want to know where their mama lives. I want to know them and have relationship. So it means that there’s a little less veil in that relationship, but we do do our property management. AJ will still do some of the low level handyman items, but we’re quick to call our favorite contractors and vendors now just recognizing that we’re buying back our time. So that’s what I do on our rental side. And then in our acquisition side, I spend time with sellers. One of my favorite things to do is to catch a cup of coffee at the local diner with a sweet old lady that is an absolute hoarder in her house and we can’t meet at her house because it is dangerous to do so instead we go get a cup of coffee somewhere else. And just to get to know that person in their circumstance, learn about their story, spend time with them, and then start to dig out, as you were saying, Tony, what are those problems that we can help you solve so that you can move on to a new stage and journey in your life, hopefully a better one, and we can support in bringing new legacy to this home.

Nichole:
That’s my lane. I do all of our negotiation and contract review and then of course, help resell the properties when it’s time as well, because I have my agent’s license

AJ:
On my side, definitely more of the systems and processes side, so keeping track of things like paperwork and whatnot and managing the rehab portion. So I did a lot of work on all of our properties that we’d acquired up until recently, and I’ve slowly tried to get out of that, finding the things that are my best use of time. I might be able to do that work, but it’s going to take me longer and it’s probably not going to look as good, so it’s better to pay a contractor. So have slowly worked out of most of that. So yeah, so I definitely managed the actual rehab portion of things and then running all of our numbers, doing our analysis and due diligence, all of that side of things is where I like to stick my time. That’s where my brain works best on all the numbers, pieces of things.

Nichole:
Can I brag on AJ real quick, some more here that he does for this? AJ also has this special gift of building vendor and partnerships with great contractors. So he builds such rapport. There’s such respect. I’m sure it’s a combination of the biceps and the beard, but nonetheless, people love to work with aj and it means that we get really incredible pricing, pricing on all of our materials and labor, but also even really great opportunities with our hard money negotiated based on relationship, just really great rates that way too. So that’s his superpower, even though he didn’t mention it.

Ashley:
And that is a valuable tool to just know of and to work on is building those relationships with different people in the industry.

Tony:
On that note, I think for a lot of Ricky’s, finding good contractors is one of the hardest things to do that can understand how to underwrite a deal. And they can put all the numbers together on a spreadsheet, but when it comes to finding the people to actually do the work, that’s where a lot of folks get stuck. So aj, what would your recommendation be if I dropped you into a brand new city? You had no contacts, no preexisting relationships. Where are you going to do to rebuild that roster of great contracts labor?

AJ:
Yeah, that’s a great question. Yeah, I think probably the first thing I’d do is I’d find community, I’d find community of investors and I’d build a relationship with them first and I’d find out who they like trust, because if I can have a relationship with somebody that then opens up their Rolodex to me, that’s going to change the game for me. I can go through a list of contractors and try to read reviews and maybe get some testimonials, if you will, from previous clients, but that’s something that can be really easily defrauded and somebody could have fake reviews and testimonials, things like that. But if I can sit eye to eye across from another investor who says, Hey, you should use my guy. He’s great. He has faires prices, here’s his number. I’m going to take that with a little bit more weight because those are people that I’m also trying to be like, I’m trying to continue to grow investing, and if I can find good trustworthy investors that then trust me to have their contractors information, that would probably be step one for me.

Ashley:
Aj, I want to get your opinion on a rookie just getting started. What is one of the first systems and processes that they should actually implement when they’re investing?

AJ:
Yeah, I think that depends a little bit on what the strategy is. For us initially didn’t really have a whole lot of spreadsheets. Our first live and flip, it was like, yeah, I think we can probably do it for about X amount of dollars. And so I think having a way to track your budget and then knowing what the total amount you want to spend is and getting a good idea of what that looks like on the front side will help you on the backside so you’re not spending more than you actually want it to. And then for the Landlording side, having a good system like a rent ready will make your life a lot easier. Having good way to track your rent, well, a good way to track your expenses, having a good way to keep your documents in one place so you have your leases. Everything’s coming into one portal. I think that’s huge too. It’s going to take a lot of the brain damage out of things as you’re trying to learn. Landlording

Ashley:
And BiggerPockets Pro members get rent ready for $1 too. So if you’re a pro member, and it’s also really affordable too if you’re not a pro member. So check out rent ready. We have to take a short break, and when we come back, we’re going to discuss some more advice for rookies and what they can do if they want to get started. Okay. We are back and thank you guys so much for taking the time to check out our show sponsors during these ad breaks. Okay, Nicole, so you’ve surrounded yourself with an investor community to help grow your investing. Throughout the episode, you’ve given us multiple examples of how that has really helped your business. Why should a rookie investor find a community or a group of investors to connect with? Why shouldn’t they just go out and do everything on their own?

Nichole:
Yeah. Question Ashley. I think, and I were just talking about that this morning, it’s actually not about houses at all. Everything we do in real estate almost has nothing to do with the property itself, but the relationships that surround the property, right? If you’re investing and you’re going to be a landlord, well then your tenants are a crucial piece of what you have going on. If you’re buying flips, then you have a relationship with the seller and the contractor. And if you want a good reputation, you should probably have a good standing with the future buyer, right? Relationships through and through are the heartbeat and the thread of real estate investing. And so finding a community and your footing in a real estate investing community can be such a game changer in setting you apart and ensuring that you don’t make mistakes that a bunch of other people made before you.

Nichole:
So our version of that is we go to investor meetups. There was a longstanding meetup in our community that had been meeting already for years. We showed up, figured out how we could pitch in and be helpful. Once again, value add is the name of the game for us, value add on properties, and also value add in relationships. So we became so valuable to that investor community that we actually get to host that space now. So we gather anywhere between 60 to 200 investors every single month in the state of Washington, and we host spaces, we bring in great speakers to teach us all the things we don’t know how to do. And the plus side of being the host of that is I get to ask all the questions that AJ and I have. So it’s like free consulting with top level investors. You bring them in to talk and you get to ask all your great questions.

Nichole:
What do you think you’re doing with you guys right now? Yes, exactly. But folks want to share what they know, and that has been such a big space. So that’s called warri Washington Real Estate Investing. It’s a Facebook group turned into an in-person meetup, and it has been hands down, probably the largest launcher for us in our investing because you build relationship with people that you can just ask questions to, and they’re so excited to give you all of their resources, right? The budget sheet that AJ’s referring to that we use to build out the scope of our projects somebody else made that we didn’t build out that spreadsheet. Somebody else gave us that tool, and we get to benefit from it every day.

Tony:
Yeah, I think community is such an important part for folks who are on the beginning part of their journey because for so many Ricky investors, you almost feel like you’re doing it by yourself, and you don’t have maybe that best friend who’s right by your side and doing it with you. You kind of learn real estate in a vacuum, but I think real estate becomes so much more approachable and tangible and realistic when you can have conversations with people who are actually doing it, and it feels like something you can actually accomplish when you can shake someone’s hand who said, oh, yeah, I just did this thing that you’ve been afraid to do for the last however long. So love the value of community. Aj, what about you? I know you said you guys have a flip that you’re one sided walk away from being done on, but maybe give us a quick update. What’s been going on in this last project you guys are working on?

AJ:
Yeah, that was kind of a long process to get to the closing tip on that one. And I think that’s a lot of where Nicole really brings their value is being able to build relationships and build rapport and help kind of suss out what the problems are. And this particular property had about 10 to 12 people living there, some of them not so invited. There was an RV that was on the property and just some individuals that maybe weren’t necessarily treating the people on the property around them with the same level of respect as maybe what the homeowner had wanted. And then the property had fallen into some disrepair as well. And so that one, we got to the closing table. There were some family members that were really involved that really worked hard to also try to help this sweet older gal move on to the next stage in her life.

AJ:
Well, and that part of that was helping her get some of these people off the property as well. We provided some resources to them, but they definitely stepped in to help take care of the folks that were around the property that shouldn’t have been there, but they came back to the property and did take some things that after closing was kind of we were going to keep, but in the end, it wasn’t necessarily a huge impact to us. It was just kind of par for the course. It just kind of comes with the territory when you’re dealing with properties that might have a level of distress. Distressed properties are typically just a byproduct of distressed people, and that’s why taking care of the people are so important, at least to us, because those people are really the important part of the process. That’s the most important part for us at least. So yeah, that property, we quickly got dumpsters onto the property before we even closed on it to give the family members a place to put things that they weren’t going to take. And then after the fact, we quickly tried to remove everything from the inside of the house so that there would be less incentive for people to come back.

Tony:
Let me ask guys, Rick, you’re mentioning some issues that I think as a first time investor would’ve thrown you off your game, and it feels like, man, the world’s coming to an end. But now as a more experienced investor just kind of rolls off your back. What do you guys know now after having done multiple of these types of projects, regular flips live and flips your property, managing, what do you know now that you wish you would’ve known on that first project that you stepped into?

AJ:
Yeah, I think what we know now, I kind of wish that we know a little bit more at the beginning was it’s really not that serious. I think some of the things that feel like really big problems, once you’ve dealt with ’em a time or two, they ended up really not being that big. They’re just another problem that you have to solve. And so when you find those problems, then at least how to solve them. At least that’s for me. I dunno if you have something different.

Nichole:
Yeah, I think there’s this concept of trust but verify, right? That’s something I wish we knew straight out of the gates on our very first project that live and flip, where we lived in the rv, in the driveway, we had a contractor steal from us then too. So now as we’ve spent more time and we’re a little bit more strategic in our investing, we trust but verify if we have a new contractor or a new company working with us, or even if we’re working with the seller and they’ve said they were going to go do something, we show up and go look. So we are local investors. We usually invest within 20 to 30 minutes of our personal home, which means we get to be on site. And then the last thing I love about this is if you’re investing anywhere, meet the neighbors.

Nichole:
If you’re going to buy a home, even if you’re going to keep it as a long-term rental or you’re going to flip the house, meet the neighbors, they become your biggest resource in my opinion. And if you build great relationship, I’m talking, I send the neighbors of our flip coffee cards every time our contractor pulls into their driveway accidentally, I’m sending them thank yous, I’m giving ’em phone calls, checking in on them, but they are end up being your eyes and ears when you are not around. So sure, you might end up with a few extra phone calls of complaints from a neighbor that says the hammer was swinging a little too late, but I’d rather them call me than them call the cops. So that’s my other tidbit for a rookie investor is build relationship. Wherever you go, have a high level integrity, and if you leverage that and keep that reputation, it’s definitely going to serve you in the end.

AJ:
Adding onto that, just briefly too, part of that trust but verify process is to get everything in writing. If it’s not in writing, you have nothing to go back on. If it didn’t turn out like you wanted or didn’t turn out like you agreed, if you just had a handshake deal on something or you just talked about it when you’re at the property with somebody but never got it in writing, ultimately that’s on you. If it doesn’t turn out like you wanted because you have nothing to go back on and stand on and say, no, we agreed to X, and the contract or whoever that other person says, well, I remember it this way. If you don’t have it in writing, it is not real.

Ashley:
Well, Nicole and aj, thank you so much for sharing your advice with rookie investors and coming on today. Can you let everyone know where they can reach out to you and find out more information about your journey?

Nichole:
Absolutely. Instagram’s probably the best way to find us. We’re on Instagram. I’m at Nicole Fran Anisa. Yeah. And

AJ:
I’m at Anthony Fran,

Nichole:
And we’d love to connect. Hit us up in the dms. We’ll see you at the conferences out there in the wild. But truly thank you guys.

Ashley:
Are you going to be at BP Con?

Nichole:
We want to go to BP Con. We might be there.

Ashley:
Okay. Yeah, we’d love to see you guys there, and I’m sure everyone listening would love to connect with you guys at a BP Con. Well, thank you guys so much for joining us today. I’m Ashley. He’s Tony, and we’ll see you guys on the next episode.

Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here. Thanks! We really appreciate it!

Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected].

Source link

In Home Improvement

Before and After: 4 Gorgeous White, Black and Wood Kitchens

August 25, 2025 No Comments

After: Copious white oak cabinetry forms a serene and unobtrusive backdrop, letting striking white marble with dramatic veining have its moment. Black hardware and other black details play supporting roles. The new kitchen’s color palette also includes dark lilac (the marble veining) and deep blue (the seat cushions and pendant lights) for added intrigue.

The designers also switched up the layout, including moving the fridge to the other side of the kitchen to make room for a pantry cabinet. And of course, the new sink faucet is perfectly centered under the window.

Backsplash and island top: Lilac marble, Integrated Resources Group; stools: Henry, Hedge House Furniture; seat fabric: Dot, Dot, Dot… in Vintage Blue, Perennials Fabrics; faucet: Odin in matte black, Brizo

Property Taxes Banned? States Imagine a Tax-Free Future

August 25, 2025 No Comments

Are property taxes actually illegal theft from homeowners? This episode dives deep into the growing chorus of Americans claiming property taxes violate constitutional property rights, examining two main legal arguments: the “no true ownership” theory, and possible Fifth Amendment violations. These arguments are gaining steam in several states, but are they legally valid? On The Market host Dave Meyer explores that question, plus how rising home prices are driving property tax reform movements across states like Florida, Ohio, and Pennsylvania, potentially reshaping the housing market by reducing ownership costs and affecting home prices, mortgage affordability, and regional migration patterns.

Dave:
Are property taxes illegal? You pay ’em every year, but does the government actually have a legal right to tax property that you already own as property taxes rise year after year? More people are asking this very question today, we’re digging into it. Does the government even have the right to tax your property in the first place? What role do property taxes play in our economy? Could there be relief for property owners in the future? And how can you make wise investing decisions based on our research? Hey everyone. Welcome to On the Market. I’m Dave Meyer. Thank you all so much for being here. You may remember this if you’ve been listening to the show for a while, but a few months back I did an episode about the state of Florida wanting to get rid of its property taxes. This is something they’ve been talking about a lot.
Governor Ron DeSantis has been publicly discussing this and it’s something that they’re still exploring. And after we did that show, we got a lot of great feedback on the episode, but there was this one line of feedback that I saw that I really wasn’t expecting. Honestly. There were many people that reached out to me that said property taxes are illegal or should be considered theft. And that was not a line of thinking I had really ever explored before, but it is one with massive implications for the housing market and for our economy because property taxes are one of the fastest growing expenses for investors. It impacts cashflow and in many parts of the country, it’s starting to impact the broader housing market in terms of inventory and pricing. And on the other side, property taxes make up a lot of local and state government revenue.
So this question is super important. So I decided to take a look having really no previous opinions about the topic. I did a lot of research to try and get to the bottom of this question and I have a lot to share with you about the legal status and the future status of property taxes in the us. Let’s do it. So first and foremost, let’s just set the stage. We’re going to start really simple. What’s a property tax? Well, it is the tax assessed on the value of your property. This is not the same thing as the income tax that you pay on rental income if you own a real estate investment. This is just the tax assessed on the value of the property. And this happens at either the state or the local government level. And so you’ve probably seen this before if you own a primary residence or you own a rental property, but basically your property taxes each and every year, you’ll probably get a statement for them.
It’s the assessed value of your property, which the government will send you and your tax rate, which will vary pretty dramatically from state to state and from municipality to municipality. So we’ll get into that more. For example, the average tax rate that people pay on properties in the United States is about 1% of the assessed value. So if you had $500,000 property, 1% of the assessed value would be about $5,000 per year. And the interesting thing about these types of taxes is that they’re actually not necessarily attached to the person. They’re attached to properties as a lien, meaning that the tax obligation is tied to the property, it’s not tied to the individual that owns it, which means that if you were to buy a property for example, that has a tax lien against it and a lien is just a liability. It’s basically saying that if you were to buy a property with a tax lien, that means there are taxes owed on this property.
And if you go and buy that property, you owe those taxes, not the people that owned it before. And that is one of a million reasons that you want to get a full title and lien search when you buy a property because you do not want to inherit a property with a lien on it unless you’re using that as part of your acquisition strategy. But just want to call that out. This is going to matter for our conversation today that these taxes are tied to the property and not to the individual. So this sounds simple enough, right? We have tons of different taxes in the us. We have income tax, sales tax, corporate tax, property taxes are just part of that. Well, for most of US history that has been the case. Property taxes are actually older than the United States, but it has been in the United States since its founding and really started to get widespread in the 18 hundreds as a means for helping fund state and local governments.
And that is largely still true today. It varies state by state, but nationwide, three out of every four tax dollars at a local level come from property taxes. That is insane. 75% of the money that your state and local taxes earn are from property taxes. That’s a national average. It’s going to vary state to state, but that is the average. And these dollars are of course then used to fund things like public schools, police and fire departments, roads, maintenance libraries, those kinds of things. So if this has been around for so long and it’s such an important part of the revenue structure for our state and local governments, why then is there a chorus of people saying that property taxes are illegal? From my research, there are basically two main arguments. There’s some other ones that are a little more fringe I’m not going to get into, but the two main ones with credibility that we should explore are first and foremost and the one I think that is the most common, the quote, no true ownership argument.
And proponents basically say that if the government has the ability to tax you year after year on something that you ostensibly own, then you never really own your property. So this applies if you have a mortgage, but even if you’ve paid off your mortgage and you own your home free and clear, you still got to keep paying your taxes. And if you don’t, the government can put a lien on your home. They can even go so far as to auction off your home to collect the taxes that are due. And to some people in this argument is essentially renting from the government indefinitely. They argue that once a homeowner has fully paid for a property requiring ongoing tax payments is fundamentally wrong, effectively saying the state is the ultimate owner. This is the most common argument and real property. And when I say real property, I’m talking about physical property like houses and land because your jewelry, your car is unquote your property.
But when I say real property, I’m talking about land or homes. So real property sort of does stand out as this only thing that works this way. I kept trying to think of another piece of property that is taxed in this way and I really couldn’t. I don’t think there’s anything else that works in the same way. So I do think that that’s why this has drawn so much attention. That was the first argument I mentioned. There was a second argument and that is more constitutional and I read a few different legal things here, but the most common incredible challenge to property taxes in sort of a constitutional sense is that it amounts to taking of property, which supposedly violates the Fifth Amendment. The Fifth Amendment. You may be familiar with this. This is the one that says the government cannot deprive someone of life, liberty, or property without due process of law.
But it also has this takings clause which requires just compensation. When government takes property for public use or other constitutional provisions, this comes up a lot of times you may hear of this takings clause. This comes up a lot in real estate when it comes to eminent domain, if you’ve heard of that term before. That’s basically if the government needs to take someone’s land for public goods, say for utilities or for military use or for something like that, they have to provide just compensation to the landowner, to the property owner in order to use that. So people who feel that property taxes are illegal because of the constitution often cite this and say that they are taking your money for public use without just compensation. So those are the two major arguments that property taxes are illegal, but we got to look at ’em. Do these actually stand up? We’re going to get to that right after this quick break. Stay with us.
Welcome back to On the Market. I’m Dave Meyer. Diving into the topic of whether or not property taxes are illegal and if they are or not, what that actually means. Before the break, I shared two of the most common credible arguments that property taxes should be illegal. Now we’re going to look at if these actually stand up, we’ll do it one by one and we’ll start with the no true ownership argument. What I uncovered in my research is that while the US has very strong property ownership laws, they are not absolute ownership laws. And what that means is that for all property in the United States, whether that is real property, a k, a houses or land or other property like a car or jewelry, there are certain conditions that must be met for your property rights to remain in effect. In other words, absolute obligation.
Free ownership just does not exist in the United States. Our government is set up in a way that the government can implement conditions of ownership and property taxes is one such condition for the ownership of real property. In fact, during certain times in the US property ownership had other conditions like back in the day you could be obligated into militia service because you own property in the United States or there have been times or places that have implemented mandatory road maintenance labor if you own properties and taxes are what we have now, but they all come from the same idea. Again, it’s that even if you own something in the United States, the way our government has always set it up, this is since the beginning, is that that ownership is not obligation free. The government has the right to implement obligations on that property ownership. You may agree with that idea or not.
That is up to you, but that is the way that the government is set up and given this, the idea that either you own your property or you rent it from the government, which is a common thing I’ve heard that seems like this sort of false dichotomy, this false premise to me, because you can own a car and you still need to pay the registration fee, right? You buy a drone, you still can’t fly it everywhere you want. There are conditions of that ownership, and that does not mean that the government owns it and is renting it. Instead, it means that you own it, but the government is implementing obligations on that ownership. And I’m not saying that you have to like this, that a lot of people are going to disagree with this, but this is just how our system of government is set up.
And the fact is this has been litigated many, many times and the courts have backed this up many, many times. I have found court cases going back to 1916 backing up, and as recently as 2023, the Supreme Court again supported the idea that the government can collect owed taxes via foreclosures. So just time and time again, you see the courts back this up and say that this is in fact how it works. So while I get the idea that property taxes may make it feel like the government owns your property, the law makes a distinction between ownership and conditions ownership. So property taxes are not illegal on these grounds. But what about that second argument talking about the constitution? Well, generally speaking, the power of government to levy taxes including on property is also very well established. But as I said, many say that the Constitution prohibits specifically property tax.
And this sort of led me down this whole rabbit hole, and here is where I came out. There is no law that prevents property taxes in the Constitution, but the federal Constitution originally required any direct federal tax on property to be apportioned by population, a rule that made it extremely difficult to implement. And that was intentional. And I admit I spent a lot of time researching this. I don’t fully understand why it actually made it’s so hard to implement it, but every legal document I read said that it was intentionally made difficult in order to purposely leave the question of property taxes to state and local governments. So the result in the US is that we do not have a federal property tax, and it does seem that that was the intention of the people who framed the Constitution. Now, they did leave it open to this very specific onerous difficult way that it could happen at some point in the future.
But it does seem that in the US we’ve sort of adopted, the original intention was that we do not have a federal property tax, but we do have property taxes at state and local levels. So is it constitutional for the federal government to have a property tax? Only if it’s done in this very specific difficult way, which is why we don’t have it. But does the Constitution say anything about stopping local governments from implementing property taxes? No, they absolutely have allowed that, and that’s what states and local governments have done. Some states, however, have imposed limitations on property taxes, but that’s at their local lawmakers discretion. That is sort of how these taxes are implement the scope, the scale of these taxes, not a blanket ban. For example, Texas prohibits a statewide property tax. The state government itself cannot impose one openly, local entities can.
So with this second question of is property tax illegal in the United States based on the constitution? No, it is not. It has been tried in court many times and in many venues and legally it’s always been held up. Again, not saying that you got to like property taxes, you can choose to vote against them in your local elections, but the fact is they are legal If you want to fantasize about them being illegal, go ahead. But as of today, that is not the case. However, they are also not required and municipalities are thinking about doing away with them altogether because clearly people in a lot of areas are not very happy with property taxes and would prefer a different system. This is becoming especially acute right now because as property values have soared over the last couple decade, decade and a half, property values have gone up with them.
And there’s this thinking that this is unfair because you’re getting taxed more and more and for some people their income is not going up at the same rate, and so this is taking up a higher and higher proportion of their income. And as a result, we’re seeing a lot of proposals for property taxes either more commonly be curtailed or limited in some way, but in some cases be eliminated altogether. Just for example, in Ohio there’s something called citizens for property tax reform. It’s a grassroots group. They’re collecting signatures for a November, 2025 ballot initiative to amend the state constitution and abolish property taxes entirely. They want to detach government funding from property ownership. We’ll talk about whether that’s realistic or not in just a minute, but I’ll just show you other examples. In Pennsylvania, a state representative has introduced a proposed constitutional amendment again to the state constitution to end property taxes.
He cited that argument saying that it was paying rent to the government. Again, Florida, we’ve talked about how governor DeSantis and some of his allies are exploring full banning of property taxes. State is also considering some rebate checks, some homestead exemptions for people on their primary residences and caps on property assessment hikes as interim measures. So those are some of the main examples. But other states like Iowa, Kansas, Colorado, North Dakota, are all exploring reforms ranging from sort of those caps on assessment growth to full elimination. I think we’re going to see a lot of these ballot measures come up in 2025. More about that after this break.
Welcome back to On the Market. Today we are addressing head on the question, are property taxes illegal? So is this a good idea? Should we be getting rid of or limiting property taxes? I mean, I think there are probably good arguments for and against this. We’ll start with the against. So the main argument here is similar to the first one, it’s that you’re paying taxes on something that you already own, and even though that’s not illegal, maybe it shouldn’t be something that the government relies on to make money. That is the primary argument that I hear. The other thing that I hear is that it’s creating a lot of stress for families, right? Because again, the tax assessments just look at property values. They don’t account for the homeowner’s ability to pay, and this can disproportionately hurt older folks, people who have maybe lived in their home for a really long time, maybe they’re on a fixed income and their property value’s going up, but their ability to pay those taxes becomes and more burdensome and that can be a problem.
It also can hurt folks in gentrifying neighborhoods because their tax burdens increase without necessarily a corresponding increase in the homeowner’s ability to pay. And so in some, I hear a lot of people say that this hurts this group of Americans that are asset rich. They have a house that’s going up in value, but cashflow poor where they don’t have income and that’s a problem. Then the third argument is there are just some people who are anti-tax in general and they just want to pay as little tax as possible and they want to reduce property taxes. So those are the main arguments I hear against property tax. On the pro side, people just say that property taxes are essential to funding government services, and the thing that a lot of people point to that’s positive is that by having these property taxes at a state and local level, that money stays in the community.
It’s not sent to Washington where it’s reapportioned to all these million different things. It’s money that stays in the community and therefore is subject to more accountability. This money that you’re paying in property tax, it goes to the things immediately around you like the schools and the roads and the sidewalks, and you can hold your government more accountable for how that money is used than you can at a federal level. That’s the argument, at least there are some other arguments that I saw that I think some people will consider pros. Some people will consider cons. So I just want to put this in a third bucket of depending on who you are, you might see this one either way. The first one is that it’s considered a progressive tax. That doesn’t mean it’s like a left-leaning democratic tax, although some people might see it that way.
What a progressive tax means is that it disproportionately impacts higher wealth families because they generally own property and it generally helps lower income families. So that is sort of like a well-established part of property tax is that it is a progressive tax. Again, you might see that as a pro or a, the other thing that you might see as a pro or a con is that it’s very different locally, and so some people might see this as pro because you can vote on it and you have the ability to more directly influence what your property taxes are on a local level. The other thing that’s kind of nice about this, this is not for everyone, but if you really don’t like your property taxes, you can get up and move. If you’re in New Jersey and you don’t like your 2% property tax rate, you can move to Alabama.
It’s like less than half a percent. So you do have that option. Some people probably see that as a con. I would imagine people in super high tax states, some of them at least feel that they are paying more in taxes than people maybe who just live a town or a county or a state away. So again, you can interpret those as you want, but just two things that you should think about when you’re considering this issue. So that’s sort of the things to think about. But wherever you fall on this spectrum, I think it’s important to understand these things and to understand if some of these limitations go into place or these outright bans go into place, there would be probably a pretty big impact on the housing market because if all of a sudden your cost of ownership dropped by let’s just say several thousand dollars a year, if you eliminate it all together, it’d be several thousand dollars a year.
That would give people more buying power. It would reduce your cost of ownership. It could even increase net migration. People might want to move to a state or a county or a city that doesn’t have property taxes. That would be pretty appealing. That in turn, you could play this out, could send property values up a lot and sort of negate some of the affordability improvements over time. But I think that would be sort of the short-term impact. Of course, though there is a flip side to that. It would mean less tax revenue for the government, which some of you might be okay with, but that will come with consequences one way or another. It’ll either come with consequences in the form of fewer services. They would have to cut back on government services that they couldn’t pay for, or the government would probably try and make up that revenue shortfall with other taxes like a higher income tax or a higher sales tax.
So that’s just something to remember. I think in a lot of states, whether they have limited these things or gotten rid of them, you just see it come back in the form of other taxes. But my recommendation, and there’s some great websites that actually put out this information, is to look at the total tax burden of where you live. That adds up your income tax, your property tax, and your sales tax to just understand what percentage of your take home income is going to state and local taxes. Looking at the big picture between those three buckets, I live in Washington, a perfect example. We have no income tax here on Washington. So people say, okay, that’s great. We have a super high sales tax here. I mean, our property taxes are pretty high. They’re not crazy compared to the national avids, but we have a really high sales tax, for example.
Or if you just go one state down to Oregon, there’s no sales tax, so it’s just like a totally different, or in Texas, they have super high property taxes, no state income tax. So you sort of have to look at the total picture, and I think it’s sort of nice to think about, Hey, there’s no property taxes, but if the government’s just going to make that up somewhere else, I don’t know if it will have the benefit that everyone is looking for. So my take, while I think it’s nice to dream about lower property taxes, they are definitely not going away because they’re illegal. That is just not going to happen. Some states could choose to do away with them, but I have honestly yet to see a credible plan for how a state would make up the tax revenue from other taxes like I was just talking about, or how they would reduce spending to accommodate lower tax revenue.
So I think the outright overall elimination of them are unlikely, but I do think we’re going to see some limitations go in place. To me, I think we will see some gaining momentum around this idea that your assessed value of your property cannot go up more than X percentage or X dollars in a given year because it’s just too shocking and detrimental to many households. So I do think we will probably see some states and some municipalities pass those kinds of legislation because that’s sort of like an interim measure that could help homeowners without an outright ban and sort of giving up all this potential government revenue, and that in itself could have an impact on the housing market. Of course, that’s going to be proportionate to the ban and how much that’s going to help out homeowners. It’s probably not going to help out in the midterm.
It’s sort of like a promise for the future that it won’t hurt homeowners more in the future, but that is something to keep an eye on, especially as we go into November and some of these things go on the ballot. As an investor, I think the thing to remember is that the nice thing about property tax is that you can choose where you want to invest. You can invest in lower property tax states generally as a strategy to increase cashflow, or you can invest in high property tax states, which some people believe lead to higher appreciation rates because the tax revenue is reinvested into the community, making it more appealing, which brings up demand and property values. I should mention, I did look into that theory because I was curious if that’s true. Higher tax states have higher appreciation rate. I did not find any evidence of that.
There was no studies or anything that showed that to be true, but I did find some studies that showed that it led to less price volatility, so maybe higher tax states have less swings, ups and downs, but take that for what you will. Either way. I think as an investor or homeowner, the increasing cost of taxes and insurance is just something that we need to pay attention to more than ever before. It used to be that you just paid your principal and your interest and the other things were just kind of afterthoughts, but now it’s super important because property taxes are not likely to go away. In my opinion. Growth might be capped in the future, but I don’t think they’re going away from the point where they are now. So make sure you are including them in your underwriting, including potential increases because that’s going to be super important and make sure that you’re thinking about tax rates and potential increases in tax rates in the municipalities you choose to invest. That’s going to be super important going forward. That’s it. That’s what we got for you today. That is my assessment of property taxes, whether or not they’re illegal, less likely to happen, and what you should be thinking about going forward. Thank you all so much for listening to this episode of On The Market. I’m Dave Meyer. See you.

Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here. Thanks! We really appreciate it!

Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected].

Source link

In Home Improvement

10 Easy Ways to Refresh Your Front Porch

August 24, 2025 No Comments

Garrison Foundry Architecture + DecorSave Photo

1. Clean, Declutter and Repair

Imagine a guest standing at your front door, waiting for you to answer. What is your porch telling them about what they’ll find inside?

If they’re seeing dirt, dings and cobwebs, the message won’t be a good one. So before adding flowers, furniture or seasonal decor, start with a good scrub. Remove everything and wash every surface, including the front door, windows, light fixtures and railings. Shake out or wash the doormat, touch up chipped paint and replace ripped screens. Even the smallest, humblest porch will feel welcoming — to you and your guest — if it’s clean, tidy and in good repair.

Once your space is clean and uncluttered, you’ll have a clearer sense of whether it needs a simple sprucing-up or calls for a more substantial remodel. For bigger design or construction projects, consider enlisting a pro, many of whom can be found on Houzz.

Find a design-build firm on Houzz

This article was originally published by a www.houzz.com . Read the Original article here. .

In Home Improvement

Yard of the Week: A Pool, a Porch and a Putting Green

August 23, 2025 No Comments

At first, these Henrico County, Virginia, homeowners were looking to add a pool that would make their house the place to be for their three kids and their friends. But once landscape designer Greg Koehler of Outdoor Dreams stopped by for a consult, the project expanded.

“They thought they’d be able to work with their existing deck, but we couldn’t in good conscience tell them that it was worth fixing up,” he says. “In order to give them a well-designed deck and some usable lounge space they desired beneath it, we let them know that replacing that deck would be best.” By the time the project was done, they’d also added a fire table area and a putting green for family fun.

This article was originally published by a www.houzz.com . Read the Original article here. .

In News

America’s Fastest Growing Renter Demographic: 55+ Retirees and Empty-Nesters

August 22, 2025 No Comments

Millennials and now Gen Z have been the target audience for many rental communities over the last few years. Even for mom-and-pop landlords, making a single-family home or small multifamily unit resemble a well-equipped Airbnb to attract high-earning, younger tenants has been a popular strategy.

Recent data suggests, however, that this approach may be overlooking an ever-growing section of the rental community: the 55-plus age group.

A Generational Shift in Housing

Unlike younger tenants, many of whom are digital nomads flitting between cities or young couples saving to buy their own home, older tenants are often former homeowners who are tired of the rigors of property ownership—such as increasing taxes, maintenance, not being able to leave for weeks at a time—and looking for something stable and long-term. In other words, ideal tenants.

According to research from the National Investment Center for Senior Housing & Care, based on U.S. Census Bureau data and detailed in The Wall Street Journal, the fastest-growing age group of renters in the U.S. is the 55-and-older age group.

And a report from Point2Homes based on U.S. Census data reveals that 2.4 million more Americans aged 65+ were renting in 2023 than in 2013—an almost 30% increase, the largest of any demographic. The 55-64 segment also experienced growth, although not as pronounced. It’s a trend that is shaping the national rental landscape.

Why the Number of Older Renters Is on the Rise

According to The Journal, several converging reasons are fueling the middle-aged rental boom.

Lifestyle flexibility

Owning a single-family home is no longer practical for divorcees and empty nesters. Renting allows for the ability to move to warmer weather, be near grandchildren, and reduce taxes and other expenses.

Avoid property maintenance

The hassle of property maintenance is one of the most compelling reasons to ditch a single-family home, especially an older one. The convenience of calling a landlord to fix any issues can be highly appealing.

Financial flexibility

Selling a long-term home releases capital, offering liquidity and with it, the opportunity to travel, pay for healthcare, invest, or engage in other leisure activities.

Community and amenities

Large-scale developers have become increasingly cognizant of the growing 55+ rental age group and, as such, have been offering “active adult” rental communities, with gyms, gardens, and social spaces. Connection and engagement are a big draw for older tenants, especially those who have dedicated their lives to raising families or are single.

Regional Differences: Where the Older Rental Demographic Is Growing Fastest

Although the growing 55+ rental trend is national, some areas are experiencing sharper increases than others. For example:

San Francisco Bay Area: In 2023, renters aged 65+ made up over 13% of renters, compared with around 10% a decade earlier.
Pittsburgh: The share of renters 65+ has climbed from 16% to 18% in a decade.
Twin Cities: More than 15% of renters are aged 55+, sparking a boom in “active adult” communities in Minneapolis and St. Paul.
Portland, Oregon: Scenic Portland has seen its proportion of 65+ renters increase from 9.6% to over 12% in a decade.
Texas metros: Perhaps no other city has experienced the explosive growth that Austin has, with an 81% increase in senior renters between 2013-2023. Dallas-Fort Worth was up 66.5%, and Houston was up 60%.

Strategies to Rent to Older Tenants

To attract and retain older tenants, understanding their needs is crucial. These are helpful things for landlords to keep in mind, whether you own an apartment complex or a single-family home.

Stability and security

Nothing will deter a renter on a fixed income or nearing retirement more than unpredictable rent hikes. Mom-and-pop landlords not beholden to corporate rent increases governed by rental software programs such as RealPage and Yardi Systems stand to benefit in this scenario.

According to U.S. Census data, nearly half of renter-households are cost-burdened—spending over 30% of income on housing. When your income is limited, stability is essential.

Offering long leases of 12 months or more with the guarantee of predictable, prearranged increases will put an older tenant’s mind at ease. Those in this demographic do not have the energy or inclination to keep moving or be financially stressed. Transparency triumphs over short-term profitability.

Be fair and pragmatic in your screening

If your tenant has retired, your screening process will differ compared to that of younger, full-time employees. Ask older applicants for information about their pensions, Social Security, or retirement savings.

However, asking for co-signers for independent older singles can be humiliating and may even deter good tenants. That said, bad tenants come in all ages, and it’s essential to conduct due diligence with credit reports and income verification, just as you would with any tenant.

Accessibility matters

Making your rental elderly-friendly doesn’t mean turning it into a medical facility. However, simple additions such as bathroom grab bars, low/no-step entrances, well-lit public areas, robust security, and regular snow shoveling or underground heating pads are thoughtful touches that offer peace of mind.

Responsive maintenance

No tenant, particularly an older one, wants to move into a rental to feel like they are living in a dorm room, or that they have to worry about things getting fixed continually. Be punctual with any maintenance issues. A big part of the appeal for older tenants to move into a rental is not having to worry about maintenance.

Price for the long term

Renting to older tenants doesn’t necessarily mean lowering your rents dramatically; instead, it means offering long-term rentals that provide value. Rather than renting at the top of the market, pricing just below, with the agreement of predictable rent increases, will save a landlord money in the long term by stopping tenant turnover.

Adjust leases to accommodate Social Security or pension checks

Often, Social Security checks or pensions are not always paid on the first of the month. Offer some leeway in your leases to accommodate this.

Allow for tech challenges

Not all older tenants are tech-savvy. Allow for tenants who prefer traditional forms of communication and rent payments, as opposed to those who conduct transactions via their smartphones.

Consider pets

Many older tenants live alone, and the company of a pet helps them both emotionally and physically. Be cognizant of this when crafting your lease, and you’re likely to have a larger pool of prospective older renters.

Final Thoughts

Landlording is a service business, and with older tenants, property owners and management companies need to offer more than a place to live. Stability, security, thoughtful design, prompt maintenance, and clear, respectful communication are essential for any well-run rental property, but when renting to an older demographic, it could mean the difference between keeping a long-term tenant and losing them to the competition.

Older tenants are likely to spend more time at home than younger ones, especially in colder climates. Ensuring your home is draft-free and your HVAC systems are in impeccable order is paramount. Stay on top of these things, and you’re likely to have a tenant who will be happy to call your apartment home for years to come.

A Real Estate Conference Built Differently

October 5-7, 2025 | Caesars Palace, Las Vegas
For three powerful days, engage with elite real estate investors actively building wealth now. No theory. No outdated advice. No empty promises—just proven tactics from investors closing deals today. Every speaker delivers actionable strategies you can implement immediately.

Source link