In This Article

I lost $40,000 on a flip once because I stopped opening my own spreadsheet. I built that file myself. Then I closed it, and the deal decided what it was going to be without me. The numbers were telling the story the whole time.

A midyear review is not just for your boss coming in to act like “casual Fridays” was their idea. It is opening that same file back up while there is still time to change the ending. Every summer, I go property by property. It takes one Saturday, and it is the highest-paid Saturday of my year.

Looking for a second opinion? The great team at Mynd is offering complimentary midyear portfolio reviews for rental property investors. Their team will review your portfolio’s performance, upcoming lease renewals, local rental market conditions, and operating strategy to help identify opportunities to improve returns before year-end.

1. Compare Performance Against Your Original Investment Plan

Most people compare this year to last year. The right benchmark is the underwriting you did the day you bought the thing. Pull that document up. Yes, you should know where it is and not be scrambling to make sure your child didn’t throw it in the trash (or is that just me?).

Get current on NOI, cash flow, cash-on-cash return, operating expenses, maintenance, vacancy, delinquency, and capital expenditures. Then ask these questions:

• What is beating the model? 
• What is missing it, and why? 

The “why” is the whole exercise. Everything before it is bookkeeping.

Here is what mine looks like. My Conroe houses are new construction, bought between $200,000 and $220,000, and renting for $1,900 to $2,000 a month. 

I underwrote maintenance to be boring, and it has been. The model missed on the other side. Property taxes and insurance moved, and neither one cares how your cash flow is falling. My rent line held. My expense lines are where the underwriting aged.

That is the pattern for most people. The revenue assumption holds, and the expense assumption quietly does not.

2. Review Every Lease Expiring Over the Next 120 Days

A lease is one price you set once and then live with for 12 months. There is no fixing it in October when you realize you were too low. 

Pull every lease expiring in the next four months. Look at current rent, what comparable homes actually rent for today, payment history, expiration date, and renewal probability.

My last renewal is a good example of restraint. Property taxes went up, so I raised rent 5%. That is about $98 a month. It covered the tax increase and nothing else. The market probably supported more.

This small rent raise was nominal compared to what it would have cost to turn over the unit. Turning that unit costs me $2,500 to $3,000 before I count a single empty day. Add three weeks of vacancy, and I am out more than $4,000. Pushing another 5% would have earned me roughly $1,170 over the year.

I am not risking $4,000 to make $1,170. Residents who pay on the first are also not a renewable resource.

Run that math before you get brave. And if someone is clearly moving out, start marketing the unit now. Vacancy is the only expense that gets worse while you ignore it.

3. Look for Opportunities to Improve NOI

Rent increases are slow, capped, and require somebody else to agree with you. Cutting an expense takes a phone call and is worth talking to a customer service rep for 30 minutes.

Go line by line: 

• Insurance 
• Maintenance and repairs 
• Vendor pricing 
• Home warranty coverage 
• Landscaping, pest control, and every autopay that renews without asking

Insurance is where I find money every single time. I am quoting a project right now, and the range came back between $1,900 and $3,400. It’s the same property with the same coverage. The only thing different was the underwriter. That is $1,500 of NOI hiding inside three phone calls.

Then there is the stuff that creeps and makes you question your sanity. Mine was electric, and I didn’t realize how much a 0.01 or0 .02 increase per KWH added up. A little bigger every month, and nobody sends you a letter when that happens.

4. Evaluate Whether Your Management Strategy Is Supporting Growth

I spent eight years selling houses to investors, so I got a long look at how other people run their rentals. The ones who struggled were bad at the 200 small decisions after buying, not the initial sale.

New construction is the easiest version of this job. Almost nothing breaks, which means nothing forces me to check whether my process is any good. That is the trap. Easy doesn’t last even with new construction, and every door you add multiplies the decisions, not just the doors.

Here are things to watch:

• Leasing 
• Maintenance 
• Inspections
• Resident communication
• Rent collection 
• Compliance 

If you have not hired anyone, it is you, and free labor is the most expensive in real estate because it never shows up on the P&L.

Check your days on market, maintenance response times, rent collection, resident retention, and the hours you hand in every week. Self-manage or hire it out, but pick on purpose. Most people are not self-managing; they are just not managing.

5. Create an Action Plan for the Second Half of the Year

A bad review ends with a feeling, but a good one ends with dates. Pick three things you will finish before December, such as: 

• Reprice the renewals your comps support. 
• Schedule preventative maintenance before the season turns. 
• Requote your insurance. 
• Finish the capital expenditures you keep pushing.

Small operational fixes compound, and that is the entire business.

Don’t Wait to Improve Performance

Most investors learn how they did in April, sitting across from their CPA, holding a number they can no longer do anything about. I already hate tax time, but it becomes really stressful when I have no clue what I am walking into.

That’s why Mynd is offering complimentary midyear portfolio reviews for rental property investors. During your review, the team will help you evaluate:

• Year-to-date financial performance and cash flow
• Upcoming lease renewals and rental pricing opportunities
• Local rental market conditions
• Opportunities to improve occupancy and strengthen long-term returns

Whether you currently self-manage your properties or work with another property manager, you’ll receive practical, data-driven recommendations designed to help you maximize the performance of your portfolio during the second half of the year.

Schedule your complimentary midyear portfolio review today, and head into year-end with a clear plan to maximize your rental property’s performance.

In This Article

We know the narrative: The housing market is too expensive. That, however, appears to be changing.

Data from Parcl Labs shows where the ice is cracking. Sellers are beginning to blink, face reality, and cut prices. In doing so, they hope to gain a competitive edge in markets where listings are accumulating.

That’s great news for investors, who have grown frustrated by not being able to make the numbers work for flips or buy-and-hold deals, and for potential homeowners trying to get on the property ladder.

The three parcel maps—showing price changes, the balance between supply and demand, and where motivated sellers are—examine the changing market from different angles. Together, they reveal where seller pressure has started to translate into lower home prices.

One overriding fact becomes apparent: The U.S. housing market is not monolithic. It differs markedly depending on where you live. In parts of the Sunbelt, notably Florida and Texas, as well as the Mountain West, sellers might be willing to strike a deal as their leverage lessens. However, in parts of the Northeast and Midwest, the market remains tight, with sellers less willing to negotiate.

How the Data Works

For investors, the map Parcl Labs calls its Motivated Seller Index (MSI) is an invaluable barometer for gauging what kind of offer to make. It runs from 0 to 10 and is based mainly on sellers’ price-cutting behavior, namely, how frequently sellers reduce asking prices, how large the reductions are, and the speed at which sellers make them.

Scores between 5 and 7.5 indicate motivated sellers, while anything above 7.5 can be considered—if you excuse the unfortunate topicality for West Coast markets—fire-sale territory.

Viewed through a national lens, motivated sellers are clearly clustered around Texas, Florida, and the interior West, with Austin as one of the strongest examples. It has an MSI of 7.22, which puts it very close to the fire-selling threshold.

An alarming 53% of listings have seen a price cut, and one-third are new construction. That means builders and individual homeowners often compete for the same buyers as demand becomes more selective, creating a race to the bottom on price to lure would-be homeowners.

The pattern extends way beyond Austin into other parts of Texas. San Antonio has an MSI of 7.11 and price cuts on approximately 54% of its listings. Tampa is at 7.01 and Dallas at 6.98. Sellers are also motivated in Denver and Colorado Springs, which have MSIs of 6.84 and 6.81, respectively.

That doesn’t mean buyers should immediately head to those markets, as, irrespective of what you bid, the numbers still have to work. But buyers seem more likely to accept your offer—a notable change from the bidding wars of the pandemic-era market.

The contrasts between different parts of the country can be striking. Rochester, New York, is an area where sellers are displaying little wiggle room. Out of 3,448 listings, the MSI is just 2.25, classifying it as a neutral market. Price cuts are on only 16% of listings, which are roughly 1% higher in price than a year earlier.

The Supply-Demand Gap Helps Explain Why

Seller motivation tells us what sellers are doing. The Supply-Demand map helps explain why. It measures the difference between year-over-year (YOY) supply growth and YOY demand growth.

Parcl Labs defines supply as the total number of homes listed for sale and demand as completed sales. It compares both with the previous year, smooths the figures over three months, and measures the gap between the two. Green areas indicate markets where supply is growing faster than demand; red areas indicate markets where demand is growing faster than supply.

The geographic pattern is revealing. Much of the Northeast and parts of the Midwest appear red on the supply-demand map, meaning buyers compete for tight inventory and sellers gain an advantage even in high-cost markets.

Head West and South, however, and the picture starts to change as supply increases relative to demand in parts of Texas, Florida, Arizona, Utah, Colorado, and the Mountain West.

That changes the game for sellers as they contend with more listings. Many Sunbelt homes are brand new, and builders are incentivizing buyers with concessions and rate drops. New construction comprises 34% of Austin’s listings, 32% of San Antonio’s, and almost the same number in Dallas.

That matters for investors. Population growth, employment, and good schools and amenities can only carry us so far if new inventory comes to market faster than buyers can absorb it.

Where Seller Pressure Is Already Showing Up in Prices

The third map completes the picture by showing where seller leverage has moved the needle and begun to affect home values.

When tracking one-year price ranges, green areas on the map represent appreciation, and red areas represent declines. Markets where three signals overlap are particularly compelling: motivated sellers, supply outpacing demand, and falling prices. This is where the buy box starts flashing red.

Austin displays all these characteristics. Its MSI is 7.22, with over half of its listings having experienced a price cut; home prices are down 9.6% YOY and roughly 32% below their recorded peak, showing the full extent of its price reset.

Similar, though less extreme, is Colorado, with Denver prices down 7.3% over the last year and Colorado Springs down about 8.6%. Both markets have MSIs approaching 7, with price cuts on over 50% of listings.

In San Antonio, prices are down approximately 6.2% YOY, while Tampa has fallen about 4.5% and Dallas 3.2%. These numbers don’t scream housing crash; they indicate a market shifting to one where buyers now have the upper hand.

A map indicating motivated sellers does not necessarily correlate to falling prices. Some counties appear green on the price-change map despite weakening seller behavior. Elsewhere, the opposite is true: falling prices with particularly motivated sellers.

This divergence is a useful tool, suggesting that three metrics could capture three different stages of the market readjustment. Parcl Labs’ research tends to show that sellers might be the first to crack before appreciation slows—by seven to eight weeks.

For investors trying to identify turning markets, that lag would give them a strategic advantage over buyers looking for markets where prices have already fallen. However, many markets differ, and the data shows that the maps should be read in conjunction to signal an overall shift and long-term price declines.

What This Means for Buyers and Investors

The opportunity in this data is not simply to pinpoint the reddest county on the map. Falling prices are undoubtedly a strong sign that a market might be turning—but they could also indicate other issues, such as rising crime, taxes, and insurance costs.

Rising inventory might create bargains, but if the rate of increase is slower than the buyer would want, the market might remain competitive. Motivated sellers might also indicate something else is wrong with the market rather than simply a reality check on pricing.

However, viewed collectively, certain assumptions can be made: A high MSI, plus supply outpacing demand and falling prices, is a strong indication that prospective buyers will have negotiating leverage.

Conversely, a low MSI, with demand outpacing supply and rising house prices, indicates that sellers are still in the driving seat. Parcl Labs’ data offers an early-warning tool to signal key market shifts for investors, most notably that the urgency to transact has shifted from the buyer to the seller.

Interesting markets are those where all the signals haven’t lined up. For example, an increasing MSI has just started, or weakening supply/demand has not yet affected prices. These are where potential deals could lie.

The data is not a fail-safe, however; it is a helpful screening instrument. Due diligence on all the other factors (taxes, insurance, jobs, crime, development, schools, commuting distance, etc.) still needs to be undertaken before any offers are tabled.

Dave:
Do you want to know which markets offer the steepest discounts and the best deals for investors in 2026? Of course you do. And a great place to start that research is to try and identify where there are motivated sellers who are willing to negotiate and meet your price and terms. But knowing which markets and asset classes have the most motivated sellers is hard. That is until now. Just this week, I uncovered a brand new motivated sellers index that pinpoints which markets have the most motivated sellers, what asset classes you should target, and it even tells you what discounts you should expect to build your offer around. It is a absolute treasure chest of data for real estate investors looking to take advantage of the buyer’s market we’re in. And today on On the Market, we’re digging in.
Hey everyone, welcome to On the Market. I’m Dave Meyer. Today we have a very fun episode because we have brand new data and information about the housing market that I have never seen before. A company called Parcel Labs. It’s a real estate data company. They’ve developed a motivated seller’s index. And over the last couple of days, I have been having a field day with this information, having a lot of fun incorporating this into my own strategy. And I wanted to share it with all of you because it’s really, really valuable. So today on the show, we’re going to talk about why you should care about motivated sellers in the first place. We’ll go through that quickly. And then we’ll get into the index and understand where there are motivated sellers and how you can best use this brand new information to your advantage. So let’s just start and talk about what a motivated seller is.
You probably have heard this term before, but if not, it’s exactly what it sounds like. It’s someone who lists their home for sale and is very eager to get rid of that property. They’re not sitting around waiting for the perfect offer or the perfect terms or the perfect price or anything like that. They’re typically willing to work with the buyer to get something sold relatively quickly. And as a real estate investor, you can probably see that this is a very advantageous position to be in. If you work with a motivated seller, you have a lot more negotiating leverage to get your terms and your price. Now, motivated sellers come from all sorts of situations. You often seen them come from sort of the unfortunate situations that arise, like from probate or divorce. But you see these just with regular people too. Someone gets a new job, they have to move across the country in two weeks.
Whatever it is, they’re motivated to get rid of the house. Now, I would forgive you and understand if you’ve never had the great chance of working with a motivated seller because during COVID there weren’t many of them or maybe they were motivated, but there was just so many buyers that they could still get their price anyway. But right now, I think just the way market dynamics are working is we have more motivated sellers. I’ve talked about it at length on the show. It’s not really from delinquencies and foreclosures, that’s up from the last couple of years. But from a historical perspective, it’s not crazy. We’re just getting back to a regular level of motivated sellers where there are people who want to get rid of homes. And since we’re in a buyer’s market and days on market are going up and things are sitting on the market longer, people are getting a little bit itchier.
Unless you can afford to be patient and have nothing to sell for, there are more and more motivated sellers in the market. And this comes with discounts, it comes with concessions, it comes with better terms. So knowing where to find motivated sellers is super, super valuable. And that’s why we’re going to identify key markets and trends that can help you pick markets, can shape your offers, and help you land incredible deals. So for that, we’re going to turn to this motivated sellers index. It’s super cool. We’ll put a link to it in the show notes. Of course, you can check it out at Parcel Labs as well, but I’m just going to talk through how this Motivated Sellers Index, I’m going to just call it the MSI, is created and what you can do with it. So the way Parcel Labs is doing is they measure three different things to determine if sellers in a given market are motivated or not.
Those three things are days on market, price cut frequency, and price cut magnitude. So days on market is something we talk about all the time, but it’s just how long has it something been sitting on the market because time creates pressure and a listing that is aged past the local norms. People see their carrying costs go up, they start to worry that their listing has gone stale. They maybe see a little less foot traffic when they do an open house, there are less showings. That increases pressure. People get a little bit nervous. Maybe they get a little more motivated. The second thing is price cut frequency. So how often are they cutting? This is something that is super valuable. Anecdotally, I’ve done this in the past, but if you see someone cutting one weekend and then the next weekend and then a third weekend, that person is pretty motivated, right?
So that’s the second thing that’s measured there. The third thing is price cut magnitude. So how deep are those cuts? Because some people maybe just cut 1% to get it to the price drops filter on Zillow or Redfin or whatever. But if you’re dropping 10%, that shows a little bit of desperation. I should say motivation, maybe desperation. We don’t know. But when you combine these things, this makes sense to formulate the motivated sellers index. We got days on market, price cut frequency, and price cut magnitude. And by combining these three things into just a single number, you can actually evaluate which markets are the most motivated, which markets are the least motivated. And even if you’re not shopping markets right now, this information can really help you formulate your offer. Because you might be investing in your backyard and if things are really motivated, if people are just fire selling deals, that’s going to change what you should offer.
You should try and extract as many concessions as possible in some of the episodes we’ve been talking about, how effective asking for concessions are. You can formulate your strategy around that. If you’re in a neutral market, you can’t do that. They’re going to ignore your offer. So this information really matters to all investors. And it’s very difficult, at least in my experience, it has been very difficult to look at days on market and price cut frequency in depth on your own and try and say, “What is going on here?” That’s a lot of information to aggregate yourself. You can’t do it. I mean, you could if you had a data feed, but it’s difficult. So having this one number really does help. And the way they’ve done it, Parcel Labs has done it is they’ve basically made it a one to 10 score with one being low, like neutral, people aren’t really motivated, 10 being the highest, and they actually break it down into four different buckets.
And if you’re watching this on YouTube, I’m actually just going to pull this up right now. I’m going to just show you this. You can see the URL, you can go look at this yourself too. But basically between zero and 2.5 is neutral. Between 2.5 and five is stubborn. So people aren’t really trying to sell, but they’ll do it a little bit. Between five and seven and a half is motivated. And then between seven and a half and 10 is fire selling. So those are the most motivated markets in the country if you’re between seven and a half and 10. And if you look at the national housing market right now, the whole United States, it’s slightly motivated. Five is the line between stubborn and motivated. And on a national basis, we’re at 5.1. So a little bit motivated. It’s been trending up a little bit, but not that much.
But of course, this national average really hides the information that real estate investors want to know. We want to know what’s happening in my market, what is happening in my asset class. And we’re going to get into that right after this quick break. Stick with us.
Welcome back to On the Market. I’m Dave Meyer. Today, we’re going over a new motivated seller index that I found from Parcel Labs. Before the break, I broke down the index itself. It’s from zero to 10 and told you that in the United States on a national basis, it’s at 5.1. But let’s look at what’s happening regionally. Now, again, if you’re watching on YouTube, I’ll actually just scroll down and show you some of this and how this is ranked. But right now, the number one most motivated market in the country is Sherman, Texas, where we’re at a seven. So it’s really important if you go back and look at their categorization, anything above a seven and a half is fire selling. And so there’s really no markets in the country that are at fire sales status. And this sort of jives with what I’ve seen, at least anecdotally in the market.
Tell me in the comments if you’re wrong, but I’m not seeing fire sales. I’m seeing big discounts as an investor, which is great, but I’m not seeing people paying 70 cents on the dollar for things, at least on market deals. You don’t see that. And I think that’s good. As investors, we do want discounts. A buyer’s market is to the advantage of anyone who’s trying to acquire and to build, but you don’t want fire sales. The risk of catching a falling knife is higher in those situations. So Sherman, Texas is number one. Tampa, Florida is number two, also at seven. Punta Gorda at 6.9. Austin at 6.9. San Antonio at 6.9. So those are the high end. You’ll also notice here, it’s kind of cool. They have a breakdown between single families and condos. I don’t think a ton of investors invest in condos. I personally don’t, but it actually breaks it down.
So in Sherman, Texas, for example, single family index is a little bit higher. It’s 7.2, but for a condo, it’s lower, 6.4. That’s weird. I would’ve thought condos were higher, but right now people are holding onto their condos a little bit more, except in San Antonio. In San Antonio of a 7.3% for condo and single family. So hopefully you’re already seeing how useful this can be in your market, but let’s just talk about the other end of the spectrum, the least motivated markets. So we have Rochester, New York, crazy. I’m just still shocked at how strong Rochester was. I went to college there and the market was awful, but it’s been so strong for five years straight. Their motivated sellers index is at 1.7. So don’t try and negotiate if you’re going to Rochester, New York right now because people are not motivated. That’s a good, strong seller’s market still.
Lincoln, Nebraska at 2.3%. Hartford, Connecticut, we’ve talked about that market a lot so far this year at 2.5. Syracuse at 2.5. Another Western New York. And then Atlantic City is also at 2.5. So those are the total opposite end of the spectrum there. And again, we’ll put the link to this so you can look this up. I’m just going to pick a market. Denver, I’m about to list a property for sale in Denver and I am motivated. I’ll just tell you right now, not expecting to get the best price on that one. So let’s just see what’s going on in Denver. Denver right now, motivated, 6.4 and it’s climate. It’s actually down from where it was a year ago, but it’s been going up, and this sort of jives with my own motivation. I just think about, I’m putting this property for sale. I sold a very similar home, almost exactly the same, two blocks away in 2022.
And I got an amazing offer on that. And I was pretty firm on my terms. I did not really give up much in terms of an inspection objection. I’m selling this property. I’m going to be willing to work with a seller if I can get something, a buyer, if I can get something under contract. So this sort of jives with my situation. I’m selling a single family, 6.7. I’m not going to sell it if I can’t get a decent price, but I’m willing to give up a little price to get rid of this property. So you should definitely go check this out. If you are curious about how your market is performing, or if you are looking for a market to invest in, check this out. The URL is too long, so I’m not going to read it. Just click on the link in the show notes or in YouTube, we’ll put it in the description so you can check it out there.
But go look at your market. This is super, super valuable. And we’re going to talk more in a minute about how you can actually take action with this because the data’s interesting on its own, but there are deliberate things that you can be doing with your portfolio with this information. And we’re going to talk about that in a second, but I first just want to talk about institutional sellers for just a second. Because like I said, no market in total is fire sale status right now, but there are definitely individuals who are at fire sale status.That’s the best situation for you to find if you can get a good discount. But Parcel, I was digging through their data and they’ve been tracking institutional single family portfolios. And in some of these markets, these sellers are dumping a lot of listings, potentially dozens or hundreds. And so if you could find things like that, to me, that just seems like a dream scenario.
They’re probably good assets. Most of these institutional buyers don’t buy really old things, or if they have, they’ve probably fixed them up. So they’re probably in decent shape, don’t need a ton of CapEx and repairs. And they’re probably very motivated. Just think about the logistics to sell tons and tons of deals, potentially hundreds at a time. And these are in good markets. They’re in Dallas and Houston and Atlanta and Tampa. And if you’re wondering why they’re dumping them, these businesses work differently. They might be willing to sell and they’re going to re-up in a different market. They might be huge hedge funds and they want to allocate some money out of real estate. Maybe they’re not able to operate efficiently at the scale that they are at, but a small landlord who’s self-managing might be able to make this into a great deal. And so it’s hard to find these things, but talk to your agent and see if you can find these things.
There’s an example. There’s a company called First Key Homes. They have literally hundreds of active listings, and they are seeing the average cut running 20% off original asking price. And they’re cutting every 20 days. So if you can find something like that where these institutional sellers are trying to just get rid of deals, super interesting opportunity if you can find them. So talk to your agent, especially if you’re in one of these markets that are really hot or were hot a couple years ago, Phoenix, Atlanta, Dallas, San Antonio, the Southeast. These places, you might be able to find something. And this is kind of like what we’ve been talking about previously on the show about new construction. We’ve talked about how new construction, most builders, they’re motivated sellers right now. New construction, they want to get rid of that inventory. Similar to institutional investors, their business model does not allow them to be patient and to sit around and wait for deals to sell at the perfect price.
So think about taking advantage of that business model and being a solution to them because you can operate these deals better than they can. So that is one thing you can do in your own portfolio with this information. But I want to just talk a little bit more about once you’ve identified a market or you look at this information for your market, what you should do about it. We got to take a quick break though. We’ll be right back.
Welcome back to On the Market. I’m Dave Meyer. Today we’re talking about the Motivated Sellers Index, and I want to talk a little bit about how to use this information. So first up, I think the obvious thing here is using this to pick a market. Now, not everyone is looking for new markets all the time. If you’re new, maybe. But if you are looking for a market, this is pretty good information. I think as someone who invests in multiple markets, invests out of state, that this is kind of gold. Because the way I think about it and the thing I would do if I were you, is to combine data about fundamentals of the market with this information. Because if you can find a market that has motivated sellers, but has really good long-term fundamentals, that’s really valuable. Think about Austin or Nashville. They’re struggling right now.
Good markets. We don’t know when they’re going to recover. But if you can buy 10 or 15 or 20% below current asking price and comps, that gives you a lot of cushion. You are walking into equity even if the price goes down another 5%, which most markets are flat. They’re not even going down that much. So that is an amazing thing that you can do, is just go out and use this for market selection. The second thing that you can do is actually use this to identify specific properties. Now, full disclosure, this is a paid feature of Parcel. And I just want to say Parcel, they are not paying for this. This is not an advertisement. They did give me an account to check this out. They did not ask me to make this video. I am just making this video because I found it really interesting.
I just met them and they sent me all this data. I was like, wow, this is really cool. So this is a paid thing, but again, I am not being paid to say this. I am just choosing to say this because I think it’s really cool. In addition to looking at markets, which is free on their website, you can actually just go and download the active listings. I haven’t done this yet. So if you’re watching on YouTube, I’m doing this for the first time. I don’t even know what this is going to look like. So I’m going to download motivated seller properties. I think this is going to come. All right, it’s in a CSV. That was really quick. Okay. So in Denver itself, I can get exact property addresses, property type, like single family, condo, townhouse. It’s got all this information in here. Square footage, all the property features, bedrooms, bathrooms, new construction, purchase date, last price.
So I’m going to just scroll over here. They have all this cool information. And then you can see for, this is, I think it was like 17,000 listings. For 17,000 listings in Denver, I can get a score right here in this column you can see here, neutral, stubborn, neutral, stubborn. So I’m just going to go and see if I can filter this. Let’s just do this. Let’s filter this by, I’m going to see fire sale.
How many are there? There are 1,914 properties in Denver that are considered fire sale status. So again, you have to decide if this is worth the price for you, but this is an amazing way to target properties. And this is on market. These are on market deals that you can target using this information. So again, I don’t want to make this into a commercial for parcel, but this is really cool. I am pretty impressed by this. This is something I personally am going to probably start to use. So that’s the second thing you can do here is literally go and identify properties based on this index that they’ve created. So the first one was like picking markets. The second one was identifying properties. The third thing is really about making offers. Because like I said, I sort of teased this in the beginning, and we’ve talked about this with concessions before, but the more motivated the seller, the more aggressive you can be in your bid.
So that is either asking for discounts on price, that’s for asking for better terms, that’s asking for things like seller financing if they’re into that. That’s asking for concessions and rate buydowns and covering closing costs. And so knowing in your market alone, again, that’s the free thing. Knowing in your market alone how motivated people are relatively can help inform your bid strategy. If you’re in Chicago or Rochester, you’re probably not making super aggressive bids. But if you’re in Texas or Florida, you should be making super aggressive bids. You should be low balling, asking for tons of concessions. Absolutely. Now, those are the obvious examples for most of us. What’s going on in my market in terms of motivation for sellers is less obvious. So go look it up. That part’s free. And yeah, if you choose to pay for that, maybe you can target more motivated sellers.
But even if you don’t, talk to your agent. If you pick out a property that you like and you can tell that they’re motivated, you should be offering more aggressive. And this is a simple, you can go on Redfin and filter for price cuts or days on market. Go do both. Go filter for Redfin for price cuts and days on market. Then you don’t even need to pay for the parcel labs. I’m a spreadsheet guy, so I like that kind of thing. But you could go do that and look around on a map and find your own motivated sellers that way. So even if you don’t use the parcel data, use this information and try and assess for yourself how motivated people are in your market and how motivated individual sellers. So that’s my advice, the playbook for you. Now, before we go though, a couple of just things to watch out for because I just want to make sure, number one, just because a seller is motivated does not mean it’s a good deal.
Sometimes they’re sitting on market and their price cuts because that’s a bad deal. And there’s hair all over it. There’s structural problems, whatever. A deeply cut house can still be overpriced if it started at a crazy level. Even if they’ve cut it 20%, don’t just buy that. That’s your job. You can use data and your agent and everything to figure out which ones to target, but you got to make sure it’s still a good deal. Anchor it to real comps. Buy below real comps, not the size of the discount. That is something I see people making mistakes with these days. Oh, it’s 10% up. Well, maybe they listed it for 20% too high and it’s still 10% too high. So focus more on your own comps and your own underwriting than the size of the discount. Because remember, motivation can signal a problem. Knowing a seller is motivated means that they’re probably willing to talk.
That is not enough to make a deal work. You got to do the underwriting correctly. But I think this is super cool. I think it’s super fun information. It’s something I really got excited about. And you probably know this, but I look at all the data for the housing market. It’s pretty rare that I come across something new that I think is really useful. And I genuinely learned about this and wanted to share it with all of you. Use it if you want, but I think it’s really cool. Even if you don’t use this particular data, I think the mindset of going after these motivated sellers and adjusting your bid strategy and building your buy box around getting those deep cuts in the great stall, in the upside era that we’re in, that is a winning strategy. So hopefully this will help you in that effort.
So all right, that’s our show for today. Thank you guys so much for watching this episode of On the Market. I’m Dave Meyer. I’ll see you next time. Thank

In This Article

Cost segregation gets talked about like it’s a magic button: run the study, get a huge deduction, and lower your tax bill. And for the right property, that’s a pretty fair description.

But not every property is the right property. Before you spend money on a study, it helps to understand what actually drives the benefit, because it isn’t the same for every asset class or price point.

Short-term vs. Single-Family vs. Multifamily vs. Commercial

Single-family rentals 

These can absolutely benefit from cost segregation, but the dollar impact is usually smaller, simply because there’s less building to work with. A $200,000 single-family rental has far fewer components to reclassify than a $2 million apartment building. 

That doesn’t mean it’s not worth doing. It means the benefit needs to be weighed against the cost of the study itself.

Short-term rental properties

A short-term rental can also benefit from cost segregation, especially when it includes furniture, appliances, flooring, outdoor improvements, and guest amenities. Vacation homes with features such as pools, patios, landscaping, and upgraded interiors may have a larger pool of assets that can potentially be reclassified into shorter depreciation periods.

As with any smaller rental property, the numbers still need to make sense. A high-value short-term rental with substantial improvements may generate meaningful tax savings, whereas a modest condo or cabin may not yield sufficient additional depreciation to justify the cost of a full study.

Multifamily properties 

These tend to be a sweet spot. More units means more of everything: appliances, flooring, parking, site work, and common area finishes. All that adds up to a bigger pool of assets that can be reclassified into five-, seven-, and 15-year property instead of sitting on the standard 27.5-year residential schedule.

Commercial properties 

These often see the largest benefits, especially properties like retail, office, self-storage, and industrial buildings on the 39-year schedule. Because commercial buildings depreciate over a longer period to begin with, pulling components out into shorter lives creates an even bigger gap and a bigger deduction.

Renovations vs. New Builds

A brand-new construction project is the cleanest scenario for a cost segregation study. Every cost is documented, every component is traceable, and the study can allocate the cost basis with a high degree of accuracy.

Renovations are a little different, but they can be just as valuable, sometimes more. When you renovate a property, you’re often replacing exactly the kind of components that qualify for shorter depreciation lives: flooring, cabinetry, appliances, lighting, and site improvements. A cost seg study on a renovation can capture both the original acquisition cost basis and the renovation costs, which means two layers of potential reclassification instead of one.

The key difference is documentation. Renovation studies lean more heavily on contractor invoices, permits, and detailed scope of work, so the paper trail matters more here than it does with new construction.

Value Thresholds Where It Becomes Impactful

There’s no hard rule that says a property needs to be worth a certain amount before cost seg makes sense, but there are practical thresholds where the numbers start to work strongly in your favor.

Generally, properties priced $300,000 to $500,000 and up start to see a study pay for itself many times over. Below that, the fixed cost of an engineer-based study can eat into a meaningful chunk of the benefit, especially on a single small rental. Above that range, and especially once you’re into multifamily or commercial assets worth $1 million or more, the deduction generated typically dwarfs the cost of the study many times over.

This is also where portfolio thinking matters. If you own several smaller properties, some investors run a study across the portfolio rather than property by property, which can make the economics work even when no single property would justify it on its own.

Why Not Every Property Needs It

Cost segregation is powerful, but it isn’t automatic or free. Here are a few situations where it may not make sense:

The property has a small cost basis

Very low-value properties may not generate enough reclassified basis to justify the study fee.

You don’t have income to offset

Depreciation is only useful if you have income (or gains) to offset. If you’re already in a low tax bracket or running passive losses you can’t currently use, the immediate benefit shrinks.

You’re planning to sell very soon

Depreciation you take now can affect depreciation recapture at sale. If you’re flipping the property in the near term, the math can look different than it does for a long-term hold.

The property is close to fully depreciated

There’s simply less remaining basis for a study to work with.

Final Thoughts

All this means cost segregation is a strategic decision, not a default one. The right move is running the numbers on your specific property before committing, which is exactly the kind of analysis a firm like Cost Segregation Guys can walk you through before you ever pay for a full study. Getting that qualification clarity upfront is what turns cost seg from a guess into a genuine strategy.

In This Article

BiggerPockets Pro members can save $500 for every home they onboard with Mynd, up to $10,000.

Managing rental properties well takes time, systems, and local knowledge that most investors don’t have the bandwidth to build on their own, especially as a portfolio grows past one or two doors. Screening tenants, coordinating maintenance, collecting rent, and keeping books straight all add up, and the cost of doing it poorly (meaning vacancies, late payments, and deferred maintenance) is usually higher than the cost of doing it well.

That’s the problem Mynd is built to solve. BiggerPockets is excited to welcome Mynd as our newest Pro Perk partner, and the timing lines up well: More investors are adding doors, expanding into new markets, and looking for full-service property management they can trust without hiring an in-house team.

What Mynd Actually Is

Mynd is a full-service property management company built specifically for real estate investors. Instead of handing off a single task, Mynd covers the full life cycle of managing a rental, all backed by local teams who know their markets: 

• Marketing and leasing
• Tenant screening
• Rent collection
• Maintenance coordination
• Financial reporting

For investors, that translates into a few practical benefits:

• Fewer vacancies, thanks to dedicated leasing and marketing support
• Maintenance issues handled by local vendors without you fielding the call
• Rent collection and reporting handled for you, with visibility into performance
• A management partner that can scale alongside a growing portfolio

The platform is built to support portfolios of any size, whether you’re managing a single rental or dozens of units across multiple markets.

Why This Matters for Real Estate Investors

As a portfolio grows, the time cost of self-managing grows with it. What worked for one property often breaks down at five or 10 doors, and the investors who scale successfully are usually the ones who know when to hand off operations to someone built for it.

Professional management isn’t just about convenience. Done well, it protects your asset, keeps tenants satisfied, and gives you back the time to focus on your next deal.

That said, property management is still a relationship, not just a service. It’s worth understanding how a manager communicates and handles maintenance requests, as well as how their fee structure works before signing on. But for investors who want reliable, tech-enabled management without building an internal team, it’s worth evaluating.

The Pro Perk

Here’s where this partnership gets interesting for BiggerPockets Pro members: For every property you onboard with Mynd, you’ll save $500 on property management services per property, with the potential to save up to $10,000 during your first year.

It’s one of a growing number of Pro Perks we’ve added because our members told us they wanted more than education and tools. They wanted partnerships that make running their portfolio easier and more affordable.

Why It’s Worth Your Time

Mynd joins the lineup of Pro Perks built to help members manage and grow their portfolios more efficiently. If you’ve been considering handing off day-to-day management or you’re adding properties and need a partner who can keep up, onboarding with Mynd could save you time, money, and frustration.

See how much you could save with Mynd.

Ashley:
Jake spent years listening to BiggerPockets through his headphones while working in the indoor rock climbing industry. He understood the strategy, but knowing how a flip should work and putting real money behind one are two very different things. At age 23, Jake decided he was ready to find out whether all that learning would hold up once the walls came open.

Tony:
The first project pushed Jake Antizette harder than either of them expected, but it also launched a partnership that has now completed roughly a dozen flips. The surprises haven’t stopped, but what’s changed is how Jake prices the risk, decides what to do himself, and responds when a deal refuses to follow the plan. And today we’re breaking down the decisions that took him from the climbing coach to a real estate investor, along with the lessons a rookie should understand before taking on a renovation.

Ashley:
This is the Real Estate Rookie Podcast. I’m Ashley Kehr.

Tony:
And I’m Tony J. Robinson. And with that, let’s give a big warm welcome to Jake. Jake, thanks for joining us on the podcast today, brother.

Jake:
Oh, absolutely. It is an honor to be here on the legendary BiggerPockets Real Estate Rookie Podcast. Long time listener, so excited to be here.

Ashley:
Well, Jake, I can’t wait to hear more of your story, but take us back to the beginning. When did real estate really become something you started thinking of and what did your life look like at this point?

Jake:
Sure. This one might be a little weird, but I knew real estate was my future from a young age. I started researching real estate, YouTube podcasts, books all the way back in high school. I knew from then that eventually I’d make my way as a real estate investor. Obviously, I didn’t start right away. I went through college, had a different career first, but I ended up making it here around the age of 23, 24.

Ashley:
Now, after all these years of learning, what was the thing that finally made you take action?

Jake:
Sure. Well, what I call my first property was actually a house. My then girlfriend, we got engaged the day we bought the house, but we bought it together to live in, to renovate. I called it a long-term burr. It’s now a rental property. But basically that was our test property is we bought a house, we renovated it, and we thought if we can do this for our own house now we should go out and we can do this for real.

Tony:
And just out of curiosity, Jake, you said you started listening to podcasts when you were in high school. How old were you when you bought the first deal?

Jake:
It was five days after I turned 23, I believe. So I was 23 years old. Yeah.

Tony:
That’s incredible. You said that it was a long-term burr. Just out of curiosity, had you done any renovation work prior to owning that house?

Jake:
You know what? My dad owned a painting company and I worked at it here and there. So I did a little bit of painting growing up and I worked for a cousin of mine who was a contractor for a summer here and there. So a little bit. I had some great help from my dad who’s now my business partner on these flips and a lot of learning as I go. And that is still how we do it. We learn as we go.

Ashley:
Now, why did you decide to do this investment and buy this property with your dad?

Jake:
Well, this first one was just me and my girlfriend. We moved into it to live in it. So it was our first house, but I knew that –

Ashley:
So it would be your next one, but your first flip you did with your dad?

Jake:
Yes. Yes.

Ashley:
So I guess the question is why did you do the flip with your dad and not your girlfriend for the first flip?

Jake:
You know what? She’s always a partner. And actually she did help out a little bit with the labor on the first few until she was pregnant and got mad at us.

Tony:
Let’s take it then, Jake, back to that first home. You said that it was a long-term burr. I guess first, just for rookies who are listening, what does burr mean? And what do you mean when you say long-term burr?

Jake:
Sure, sure. So typically when you burr, and there’s a lot of people that do a lot more than this than I do, of course, but you buy, you renovate, you rehab, you refinance, and then you repeat. Now we didn’t do the repeat, but we bought this, we renovated it for ourselves. We moved in. We lived there well below our means. We refinanced and we refinanced again when rates were really low in 2020. And now it’s been a rental property ever since we moved out in 2023.

Ashley:
Jake, I have to ask, what was the interest rate when you refinanced?

Jake:
Yeah, we’re at 2.99.

Tony:
Yeah, the twos are bringing. It gives me chills just hearing that right now.

Jake:
I wish we’d see that again.

Tony:
Yeah. Who knows? We’ll see it in our lifetime again, but it worked out well when we had it. For the property though, you said it was a long-term burr. How long did it take and how much of that work did you do yourself?

Jake:
Sure. Between my dad helping us, me and random family coming in for a few hours here and there, we did all the work. And again, we just learned as we went. I had a full-time job at the time, so it was three or four months of nights and weekends. Yeah. Yeah, it was kind of crazy. But then we lived there from about four or five years before we decided to move on and rent it out.

Tony:
I mean, three to four months actually isn’t, I would’ve assumed actually longer. You put me by myself with all my kids and my family in a house to renovate and it took me three or four years.

Jake:
Well, we were young. There was no kids yet, no pets yet. It was a lot easier then.

Tony:
What was the scope of the renovation and how did you actually go about educating yourself? Because you mentioned a few times, hey, we learned as we went, but what does that look like in practice? Are you going to YouTube University? Are you just truly figuring things out? How many Home Depot runs did that take? What was the scope and how did you educate yourself?

Jake:
Sure, sure. A little bit of asking whether it was my dad or somebody else that might’ve seen it in the trades before, asking, “Hey, how do you do this?” A little bit of YouTube and a lot of trial and error. So the scope was we did kitchen, we opened up. Basically, it was a house from the ’70s that had never been updated. So it was a lot of cosmetics, but kitchen as well, knocking down a wall, but just a lot of trial and error. It’s scary, but I always tell people, as long as you’re not going to hurt yourself, you can try it. You can shut the water off, you can shut the power off, you can try things. Just be careful.

Tony:
What was the full scope? If you look at the entire scope of work for the renovation, what did it all include, Jake?

Jake:
Yeah, so we opened up a wall to make it open concept up on the top floor, kitchen, living room, dining room. New kitchen cabinets, countertops, appliances, new flooring throughout the place. And then the bathroom, just new toilets, new vanities. So nothing too crazy, but for first project, it felt like

Tony:
A lot. And just ballpark, how much do you think you spent all in to do the renovation?

Jake:
Yeah, I actually remember it was about 12 grand, just material.

Tony:
That’s amazing. Did you get any quotes, Jake, before you did it? How much do you think it would’ve cost you had you hired someone to actually do all that work?

Jake:
I did not. It wouldn’t have mattered. We couldn’t have afforded it. We were first time buyers. My wife’s a teacher. I was a climbing coach.

Tony:
It’s like I dn’t even waste my time going to talk to you. I guess last couple of questions around the renovation for the burr. Of all the work that you did, what was surprisingly easier than you thought it was going to be? And what was surprisingly harder than you thought it would’ve been?

Jake:
Easier would probably be the kitchen cabinets, to be honest. It’s my favorite. I still do it in our projects to this day. I just love hanging cabinets. I don’t know what it. You can just get a good amount done in a day and stand back and be like, “Wow, this looks better.” That’s probably easier than I thought.

Ashley:
I love that too. When I show up one day, there’s no cabinets, and then I arrive the next day and they’re all in.

Tony:
You can say that for everything, Ash. You just show up the next day and the work’s always done.

Ashley:
Actually, I did stand and watch them this time when they just did cabinets and I was like, “Oh my God, this is too much math.”

Jake:
That’s funny. There’s a lot of prep work in other painting or flooring, whatever. There’s a lot of prep. It takes a lot of time. But cabinetry, it can go in fast and all of a sudden you got a new kitchen.

Ashley:
You must have had level walls then. I need a shim here, a shim here. That’s what I saw a lot of going on.

Jake:
The hardest part, which is actually pretty simple, but I’d say finishing after you move in, that’s for sure the hardest part. We had our closet doors, they never got painted. And I kept saying, my wife wanted them painted, of course. I kept saying, “Oh, next time we’re working on a property, I’ll bring them while we spray the doors.” I just always forgot. So the doors got painted after we moved out.

Tony:
You live and you learn. And then I guess last question on the burr, you guys, lots of four months of labor, 12-ish grand of expenses. What did you buy it for? And when you did that first refinance, what did it appraise for?

Jake:
Oh, sure. I mean, we bought it for, and this was back in 2018, so before prices started going up during 2020, 2021. But we bought it in the 130s. We got all our money back out. I remember that. I don’t remember exactly what it appraised for, but we definitely got our money back out.

Ashley:
So that’s great. That’s awesome. So then when you decided to move out four years later, what did you rent it out for and how much did you end up cashflowing on the property?

Jake:
Sure. We rented it out originally for 2,200 and great tenant. He stayed, I don’t remember if it was one or two years, but he left and then we replaced it with another amazing tenant who’s been there since and is about to sign another lease, fortunately. I love note vacancy, but we’re at 2,300. I definitely am one of the nicest units and one of the lowest rents at this point, and I should raise it. I know that, but I love the tenant and I don’t want to ruffle feathers.

Ashley:
I am on board with that. I have a tenant in a property that has paid $700 per month, which is way low, but they have lived there for about 13 years. So I do not want them, and they take great care of the property and maintain it. So I’m on board with that happening sometimes as long as you’re still cash flowing and it works for you. Now, what do you end up cashflowing on this property after your expenses are paid?

Jake:
Sure. So originally we were around 606 a month when I crunched all the numbers. So very good. Again, low interest rate. You’re not going to find that if you buy a property today, unless you just put a large amount down. But since, of course, our taxes have gone up, our insurance has gone up. So that number’s come down a bit because I haven’t raised rent, but we’re very happy with it.

Ashley:
Coming up, Jake explains why his next investment, his first flip doubled both the budget and timeline, why he chose to call the village instead of hoping no one would notice, and how he handled water entering a finished property during an open house. That’s right after this. We’ll be right back. Okay, welcome back. We are here with Jake. So Jake, as we learned, your first flip, you actually partnered with your father. So what made you decide to do a partnership with your dad in the first place?

Jake:
Sure. Yeah. My dad, I always remember he always wanted to flip houses. And maybe that’s why I knew from a young age I wanted to do it too. He owned a painting business for a long time, so he’s comfortable around the trades, but he didn’t understand the real estate side of things. Around the same time I started investing, I got licensed. I’m a full-time real estate agent. I own a brokerage. So I understood the real estate side of things. It was a natural fit. I definitely had to drag him kicking and screaming into the first one, but I was going to do it and I wanted it to be with him. I’m glad it worked out because we’ve worked together on every flip. We’ve learned how to work well together and wanted to leave each other alone. And there’s been ups and downs, but it’s worked out great.

Ashley:
What was it that your dad brought to the table that you thought he would make a good partner? And not just opportunity, but was there a skillset or something like that that you were maybe lacking that’s why you wanted to partner with him on the deal?

Jake:
Oh man, sure. I mean, a lot of things. I’m more numbers and business. He spent his life in the trades, painting specifically, but when you’re in the trades, you kind of learn a lot of things. So he’s a lot handier than me. We also just have very similar mindsets of wanting to do things the right way, wanting to have a good product. We really pride ourselves on that. So I mean, it honestly is just a natural fit. And I’m a big fan of working with family, so I couldn’t have asked for a better partner.

Tony:
Jake, I think that’s my big question here is that you said you’re a big fan of working with family. There are other people on the internet who say never work with family. Why was that your preference? And I guess how did you enter into that partnership to make sure that business didn’t make things difficult being family members as well?

Jake:
Oh, you’re asking the tough questions here. That’s a good question. And definitely I would say it depends on the family. We had a good relationship. We have a better relationship now because we work together. We’ve had our arguments, of course, but again, we just want to do the right thing. We want to do right by each other. And we have worked through them. And I’d say we’re on a five, six property streak where we haven’t argued at all. So that’s good.

Tony:
Just kind of strategically, Jacob, what made you want to get into flipping as opposed to just doing more of the long-term burrs? Because you had the strategy that worked well for you. Why not just continue to replicate that? Why add flips into the mix at all?

Jake:
Yeah. And that’s a good question that honestly, over the years I’ve gone back and forth. Should I buy some more rentals? Should I dip into short-term rentals? Should I diversify? But when we started, it was to build capital. We didn’t have much. I already mentioned I was a climbing coach and my wife is a teacher, so our funds were limited and we just wanted to build capital. But then we really enjoyed providing a great home for people. And we’ve gotten better and better at it, so we just want to keep doing it.

Ashley:
Now, how were you guys financing these flips and specifically the first one?

Jake:
Sure. Yeah. The first one, and we still use this, but the first one was purchased using a HELOC on my dad’s primary residence, the house I grew up in. So that was kind of terrifying because it’s not just money on the line, but his house. So that’s how we purchased it. And then I funded the rehab, which was somewhere between 15 and 20 grand.

Tony:
So you guys are using the HELOC from dad’s primary, and you funded the renovation costs. Was that, Jake, just money that you had saved up from working or how did you fund the rehab portion?

Jake:
Yeah, I mean, I guess you could even say it was from refinancing our residence when we took the money out because it was a combination. It was money we saved, but also when we refinanced and took our capital back out of our townhouse where we lived, that capital was now available to reuse.

Tony:
I just want to ask you a few rapid fire questions on the first flip. What city are you located in, Jake?

Jake:
Sure. I’m in Bolingbrook, Illinois. It’s the southwest suburbs of Chicago.

Tony:
And where was the first flip?

Jake:
Yeah. So the first flip was here in Bolingbrook where I am. It was maybe a half mile from my house and three, four miles from my parents’ house. So where my dad was coming from.

Tony:
And how’d you find it, Jake?

Jake:
It was on the market. And since then we’ve done. We’re on our 12th, we’re buying our 13th right now. It’s been a mix, probably fifty fifty on market, off market.

Tony:
Interesting. Now, a lot of rookies listening say that, and a lot of investors online say that the MLS is where deals go to die and there’s no good deals on the MLS. What made this one such a good deal? Had it been on the market for a long time? Was it just priced appropriately? Did you have to do anything special to get it or was it just like, hey, you opened up Zillow one day and you’re like, “Hey, this one actually makes a ton of sense.”

Jake:
Sure. I actually think, and I’ve helped a lot of investors as their agent buy properties off the MLS. I think there’s a lot of opportunities on there. You really have to get clear with your buy box. Most of the time to buy a property on the MLS, you’re buying it right away. At least in my market, you’re going out to see it in the first few days it’s on the market. And that was the case here. So we went and saw it in the first day or two it was on the market and we paid a little bit over asking price for it. We’re a little crazy. I don’t recommend this to any of my clients, but we do wave inspections and we pay cash, which makes our offers stronger. We let people leave whatever they want in the house. They can pick the closing date.
So we try and make it as clean and desirable of an offer as possible. It doesn’t always work, but sometimes the seller’s needs match ours and it works out.

Tony:
I just want to make sure I’m tracking. Y said you let the sellers pick the closing date. I’ve actually never leveraged that before. It’s like, hey, so is it typically faster timeframes or do you actually get people who want longer closings as well?

Jake:
It depends. Everybody’s situation is different. So I’ve had people that want 90 days to get out and I’ve want people that want it tomorrow and it’s like, “Well, I need at least 10 days. Slow down.” But yeah.

Tony:
I’ve never used that tactic before of just letting the seller pick the closing date. I’ve usually offered faster closings, but I’ve never just offered like, “Hey, you pick the date.” Have you done that before, Ashley?

Ashley:
I feel like it never happens anyways, even when you do put a date on the contract in New York State. So it doesn’t seem to matter. Basically, especially if you’re using financing, whether it’s me or somebody buying a property from me, it really just depends on the loan commitment and when the attorneys can actually get together to close. And especially if you’re doing a loan, then you got three attorneys involved. So yeah, I would say I don’t even know what dates are put on any of my contracts because it doesn’t usually matter anyways and it’s never stuck in stone. Yeah.

Tony:
That makes sense. Very New York specific, maybe channel.

Ashley:
I mean, maybe I’ll try it in case somebody believes that it actually matters.

Tony:
All right. So we got some creative offers going out. And you said you went over ask. What was the ask price and what did you actually close at?

Jake:
It was actually really similar to our burr that we bought. It was in the 130s and we bought maybe four grand over asking price, something like that. I was going to say just not a ton, but enough to make it different from any other offer they might’ve got that day.

Tony:
And was it the HELOC that you guys used to also fund the whole purchase?

Jake:
Yeah, the HELOC paid cash for the property.

Tony:
Got it. Got it. Okay. And then in terms of the actual renovation, I’m assuming that you guys did all the work again yourselves on this one as well? Or how did the actual renovation go?

Jake:
Yeah, we did hire an electrician to do some work on this one and hired a contractor to replace some glass and some windows, which went terribly wrong. But no, we did. This renovation was crazy. We worked seven days a week, about 14, 15 hours a day. I mean, as you can imagine, you probably remember your first deal. It was really stressful. We were terrified. Nobody knew what was going on in the market. This was 2020. So we were just trying to get it done and back on the market. So it took us about five weeks to do the renovation, just nonstop work. I remember too much caffeine and stress. My eye was quite literally twitching for weeks. Yeah.

Tony:
And were you guys able to get the renovation done on budget or this being your first flip? A lot of investors, they find themselves going over budget.

Jake:
This one, we’ve stayed relatively close to budget. Our next one, we blew our budget out of the water.

Tony:
Okay. So on the first one, walk us through the end state. After you guys finished the renovation, what did you guys list for? What was the net profit at the end of the day?

Jake:
Sure. So on this first one, we listed at around 200. We ended up sitting on the. We needed three buyers to close it. We had people lose financing, people back out for whatever reason. But we ended up sitting on the market waiting for closing longer than it took us to renovate it, which is never fun. But we ended up making a profit around 25 grand, which not bad. We were on top of the world. We just wanted our money back. We were excited. We got to learn so much. And before we even sold it, my dad was on top of me who I had to drag kicking and screaming into the first one. He was on top of me saying, “When are we doing another one? When are we doing another one?” So we did actually put another one under contract and we were ready to close basically right after we finished the first one.

Tony:
Fantastic. It’s always great. The first one kind of gives you this proof of concept, but I think it also. I’ve shared the example before. The first time that we ever sent out mailers trying to do our own direct to seller marketing, literally the very first phone call that we got back from these postcards we sent out, we ended up closing on that deal and we wholesaled it for I think 30 grand. The very first time I picked up the phone. And I was like, “This is easy. Why isn’t everyone sending out mailers and making $30,000 on every postcard they send?” And then we didn’t hear anything for six months from anyone else. We didn’t get another deal for six months. So sometimes that first deal, I think when it goes smoothly, it’s great that you get the proof of concept, but it can also, I think, maybe give you the sense of it’s maybe easier than it actually is.
And it sounds like, Jake, your second deal is going to be that reality check for you. So maybe walk us through what some of those differences were between the first deal and the second deal.

Jake:
Sure. Yeah, it was definitely a reality check, that’s for sure. So the second property we bought was also here in Bolingbrook. It was a single family home. Yeah, not too much higher of a price point. We bought it in the 150s, but it needed more work. So this one, kitchens, bathrooms, fully updated flooring, all that fun stuff. But as we started to open it up, we realized very quickly we were in over our heads and we needed professionals to come in and do this work. For example, we pulled up a shower base and we saw their drain was, it was flexible garden hose is what they had under their shower base. And it was inside of. Actually, when they installed this shower base, they put it inside of a vent. So they destroyed the duct in the ground.

Tony:
Sorry, Jake, I just want to make sure I’m understanding. They had an actual garden hose?

Jake:
Like a black drainage hose that you’d have outside. Yeah.

Ashley:
And that’s something that won’t come up in the inspection.

Jake:
No, no, not that we did an inspection anyway, but no, nobody would’ve found it. You just never know. And it did drain. We were warned they don’t use it often because it drains slow, but it did drain eventually. So anyway, on that property, once we opened it up and saw how many surprises were there and how it was kind of over our head, we couldn’t handle this, the plumbing, the electric, these kinds of renovations ourself. The first thing we actually did is we decided, you know what? Let’s call the village out here. We want to make sure we’re doing things the right way. We want the inspectors to come look at it, which I know a lot of investors, they don’t like to get the municipality involved, but we just thought, let’s call them, make sure we do it right, make it so we can sleep better at night selling this to somebody else and everything’s inspected and everything.
And that’s the way we’ve been ever since.

Ashley:
Yeah, I think that’s the better path. When you’re starting a project, we have done a couple rural properties that have done where we don’t necessarily need permits for a bunch of stuff because they are so rural. But it’s like you get the code enforcement officer’s cell phone is on the website, you just call. We still have him come to the property and just say, “This is what we want to do. What do we need a permit for? What do you want from us?” Things like that. And most of the time it’s like, “Well, unless you’re doing this or that, you’re fine. You don’t need anything.” And it’s very different in the rural areas. Like a roofer, I did a roof last year and he went to the village office to get the roof permit and he had it four hours later and started work on the roof.That does not happen a lot of places, but I agree it’s better to have code enforcement and to get your permits in place rather than get the, what is it?
The red tagged on your door. Yeah.

Jake:
I know a lot of investors that take that red tag, it’s like a pride thing. They finally got stopped. I never want to see it. I don’t want one.

Ashley:
Okay. So Jake, with this property and dealing with permits, was there anything that actually surprised you maybe during this permit process? And how much more did this actually cost you to get these permits in place?

Jake:
Yeah, the permits themselves here where we are, the permits aren’t that expensive depending on the size of the job, like 500 to a thousand bucks for the permit. But what did surprise us was the cost of plumbers and electricians. You get that state license and you are very, very expensive now, which now we’ve just budget in. From then on, we just budgeted it in and we know that. But our remodel, we doubled our budget. We went way over. It was complete surprise, but we bought that one in, that was in early 2021. So just as prices were going up. So we got lucky there that we just got good market timing that it made up for our lapse of judgment estimating the rehab.

Ashley:
What did the numbers end up being then on this property once you sold?

Jake:
Okay. Yeah, the numbers on this one, we bought in the 150s and our renovation ended up being around 40 grand. And we sold for at 270. So we did profit around 50, 55.

Ashley:
Not bad for going over budget.

Jake:
Yeah. It ended up being a home run. I know. Again, we got really lucky with market timing. We really did. And then we weren’t planning on that ARV at all. It ended up being a record sale for the neighborhood, which we’re grateful for.

Tony:
Jake, I guess I’m curious because you mentioned market timing a few times, and obviously the market has changed pretty dramatically since the days of the super low interest rates. How has your strategy changed since then? Is the market that you’re in still moving strong? Have you seen days on market increase? What changes are you making today to still flip profitably?

Jake:
Yeah, sure. Here in Chicagoland, it’s actually still a seller’s market today. So prices, I don’t want to say they’re. We’re not getting a ton of appreciation still, but it’s not like we’re losing value. So not too much has changed, to be honest. I’ve always been conservative when it comes to my ARV, so I just keep it that way. I’d rather have a happy surprise than a bad surprise. But yeah, we’re just keep on as we have been.

Tony:
Jake, one more question I have just to give Ricky’s context. When you actually go through the city, the local municipality to pull permits, just generally walk us through what that process actually looks like. What type of work did you need to pull permits for? What type of work was fine without permits for the work that did need permits? How was that process? Did you have to submit plans? How quick were the inspections? Just give rookies a sense of what it actually feels like to go through the official permitting process for renovations through the city.

Jake:
Sure. And every town’s going to be a little different on how they do this. But in general, the way we like to do things is we like to do what’s called a consult. So we want the inspectors to come out, we want to show them what our plans are, and then we want to know from them based on what we’re doing, if there’s anything extra they might require. Sometimes they want us to add insulation to the attic to bring it up to a certain R value. Or sometimes they want, if we’re opening up so much drywall, they want the electric replaced here or the plumbing replaced here. So we just want to be upfront with them and walk them through everything we’re doing and see what they have to say about it. And we kind of like that too because it allows us to bring the house up to closer to current code.
So when we go to sell it, there’s less that it’s going to come them up. Even if it’s an area we weren’t planning on touching, I will say we never plan to put insulation on a property, but if they make us do it now that the buyer has new insulation, then it’s not something that’s going to come up in their inspection. And I like to do that even in towns. We’ve worked in towns where they don’t typically do consults, but I still, I got them on the phone and I talked them into coming because I just would prefer a face-to-face meeting with the inspector so I can actually get a relationship going, build some rapport, show them we’re trying to do things the right way kind of thing. The timeframe depends on how fast you can get them the paperwork they need. Typically, they want to know who your contractors are, whether that’s plumbers, electricians, roofers, general contractors.
They want their information, they want them registered, they want them bonded. Plumbers they typically want a letter of intent from. So once you can get them that information here, they’re pretty quick, two or three weeks after you get them all the needed information. They recently started requiring floor plans, which is funny, but no problem, I can do that if that’s what they want. And then as far as the inspections go, once we get that permit and the work gets going, two, three days, you make a call and they come out to inspect and we can move on.

Ashley:
Now, are the contractors handling most of that for you? Because around here pretty much you’re hiring the contractor, they take care of the permits or did you have to do a lot of that yourself?

Jake:
No, I still do it myself. I act as the GC. We still do a lot of work ourselves. We hire out kind of more and more on each property, but we hire out all the licensed trades every time. We have to pull a permit. We can’t touch a water line. We can’t touch an outlet once we pull a permit. So same with roofing. We hire all that kind of stuff out. But yeah, I personally do pull all the permits, which is time-consuming, but it also leaves it in my control. I find the biggest delay is typically getting my contractors to register with the village. That’s usually the longest delay. All

Tony:
Right. Don’t go anywhere because Jake is closing out with the reality of learning DIY skills, what to expect when hiring contractors, and why his busiest flipping year requires him to spend more time saying no to deals. We’ll be back in just a few minutes.

Ashley:
Okay, Jake, before we wrap up here, there’s something I’ve been dying to talk about, and this happened during your open house that you had at one of your flips. Tell us this story and what this experience meant for you.

Jake:
Oh, yeah. What a disaster. I am an agent. I sell my own properties, but I don’t like to sit my own open houses. So I had a colleague sitting in open house for me. I was 45 minutes away. I was in the city, and it was raining like crazy. It had rained eight days prior, and it was just downpouring this whole day. I’m strained up, the roads are flooded where I am. And I get a call from this agent that’s at the open house saying, “Hey, there’s water coming in your house, just so you know.” And there’s no basement. There’s nothing below grade. This is a house that is slab on grade. There’s no reason we should have been getting water in it. So of course I’m like, “You got to cancel it.” And I call my dad who’s around the corner because he lives right there and he’s going to go pump it out and try and dry everything out.
So this whole property, this was the same one we doubled our budget on. So we learned a ton on this. And one of it was how to deal with stress because this was just absolutely terrifying for us. Now we have all our money wrapped up into this thing and it’s getting water. What are we going to do next? But I learned a few things. One is that problems come with the territory. You can’t avoid them. You just have to get better at solving them. So that’s the first thing I learned. The second is that talk about your issues. We had this issue and I was talking to one of the village inspectors about it, and he said, “Why don’t you call the village engineer? The village has a program for homeowners that have issues with water coming into the property because it’s kind of that whole older side of town.
There’s quite a few homes with water issues.” So I call the village engineer and he comes out just two hours later to look at the property and we make a plan and all of a sudden the village is going to help out me and the neighbor. And they agreed to dig a swale in between the two houses to help prevent the water from entering the houses again, help route it around the houses. And it really, it saved our deal. The buyer was comfortable knowing the village was committed to doing this, and we were able to sell the property and move on. And from then on, I was always open to talking to people about our problems and looking for solutions on how to solve it.

Tony:
Jake, I love that what probably would’ve terrified you on before becomes a solution that’s now solvable. And it’s like, all right, if something like this were to happen, at least now we have a plan of how to move forward. And I think that’s why the battle scars in real estate investing are so useful because every deal that goes wrong or every moment that doesn’t go according to plan, we learn from it, we recover, and it makes us a better investor moving forward. So I appreciate you sharing that story with us. One last question on my side, Jake, is just on the contracting side. You mentioned earlier that electrical, plumbing, roofing, you have to hire contractors in order to get those permits pulled. But how does a rookie go about actually finding trustworthy contractors? As I’m talking and having these conversations, well, first, how do I find them?
And then once I find them, how do I have the right conversation to vet a good one versus a bad one?

Jake:
That is probably one of the toughest questions. And this is something we go through. We’re on our 12th property now. And being an agent, I refer a lot of contractors to my clients too because they need work on their homes. I have found great relationships with contractors, but they didn’t come easy. It took going through some bad ones to get to some good ones. And the biggest thing I’ll say is you want to ask people you know for good experiences they’ve had. So if you call your neighbors up and say, “Hey, I saw you had a plumber at your house. How did that go? Did they do a good job? Would you call them again?” That’s a big one. Would you call them again? That’s huge. I don’t want to work with anybody if you wouldn’t call them again. So that’s a big one is word of mouth.
Actually, some of our contractors, they have no online presence at all. They’re purely word of mouth. My HVAC guy, I have a hard time finding his number. If I can’t find it in my phone for whatever reason, I can’t find it online. I have to call somebody else to get it. But I call him and it’s taken care of. I don’t have to worry about it. So those are the best contractors. Another way we found a few contractors is just at, and you’ve heard this before, but at hardware stores. Our roofer, I saw him at Menards and he was just talking to my kitchen guy and the kitchen guy introduced us and I’ve been working with him ever since. And again, I can call him and problems are taken care of. I don’t have to worry about it. But it takes time and the relationships go both ways.
We don’t beat people down on price. Everybody has to get paid fairly, and we understand that. It’s a win-win situation for everybody.

Ashley:
Now, Jake, when you started investing in 2021, the market was very different compared to now. What are some of the things that you are going to do different going forward that is different from when you started real estate investing?

Jake:
Yeah. Again, our market here in Chicagoland isn’t too different. Our appreciation has slowed down, but it’s still a seller’s market. Days on market are up a little bit, but I’m just underwriting a little bit more conservatively, but I’ve always been conservative. So my approach hasn’t changed too much except for since we’re trying to hire a little bit more out and we’ve got wounds that tell us how much things cost and that surprises come with every property. We do plan a little bit more on the budget for surprises. But yeah, not too much has changed.

Ashley:
We recently had this, my dad’s friend, he offered help to install flooring in my new house and just said, “Yeah, I’d love to do your dad a favor and I’ll come over and help.” And I felt bad. He’s an older guy. I’m like, “I don’t want him on his knees and stuff, having to put in this flooring with us. We can pay for someone.” Man, did I get sticker shock when I saw how much it was? It was $12,000 to install the flooring. And I had somebody that was offering to help for free to actually come and install the flooring. And I turned it down and I’m like, “Oh my God.” But yeah, I think I definitely agree too, back to your point of contractors that they don’t advertise because they’re already too busy. They don’t need an online presence. And then also my market is kind of similar to yours in the sense that it is still days on market for starter homes or good conditioned properties that aren’t outrageously priced, are selling really fast, the going pending.
Tony, what about your market right now? Maybe not specifically where you live because you’re not investing there, but maybe in one of your short-term rental markets?

Tony:
Yeah, I mean it’s a bit of a mixed bag depending on where we’re at in the country. Our market in California, that one’s on a resale side. It’s probably still pretty slow, very much a buyer’s market. Our East Coast side is more so like a seller’s market still. So I feel like it depends on what market we’re in and how things are going, but I think that’s always true. Real estate is very local and specific. Where I live right now, I’ve mentioned, I think on a previous episode, we’re shopping for a new primary. And even now, even where we live, it’s more of a buyer’s market right now as well where we have leverage. The new primary that we purchased, I got a 30K reduction on the purchase price. I got another $32,000 in seller credits. So we’re able to negotiate those things right now that it’s a lot harder in other parts of the country.
And Jake, I saw your eyes bug out when I said that. I’m assuming that’s not the case for you guys right now.

Ashley:
Well, also too, the price point, the credits that you got, Jake and I could actually buy a house with a 30K discount at 32 seller credits.

Jake:
My houses aren’t that cheap. They’re not that cheap. But yeah, no, man, that’s really unheard of around here. Again, there’s some properties that are sitting and it’s easier to buy now than it was the last five years, but it’s still a seller’s market. And my clients, if they get five, 10 grand off, I’m ecstatic for them because it’s hard to find anything.

Ashley:
My agent was telling me the other day that she’s seeing this with a lot of properties and it’s actually starting to make her really mad is agents are listing them lower to attract more buyers, get people in the door, and then they’re selling for $50,000 over asking because they were priced low. And it’s working, I guess. The houses are selling.

Jake:
It’s an interesting strategy. It’s a strategy that terrifies me because what if you get one? I have a buyer that benefited from that recently actually, because they only got two offers and his had an escalation clause. So it kind of only went as high as that one offer wanted to go. And the agent told me, “Oh, we priced it low on purpose.” I was like, “I’m sorry. I don’t know. You don’t have to accept it if you have something else.”

Ashley:
Well, Jake, thank you so much for joining us on Real Estate Rookie. Where can people reach out to you and find out more information about your journey?

Jake:
Yeah, absolutely. Probably Instagram is the easiest. I share information on our flips and my brokerage here in Bolingbrook in the Southwest suburbs. Instagram, Jake McBay, Bolingbrook Realtor is probably the easiest way to get ahold of me.

Ashley:
Well, thanks so much for taking the time to join us today and to share your journey. And next time you’re going to have to bring your dad on since he’s a partner in doing these flips. Thank you everyone for listening to this episode of Real Estate Rookie. If you’re not already, make sure you are subscribed to our YouTube channel at RealEstateRookie. Every Friday we feature a rookie reply episode and you can head over to the BiggerPockets Forums, post a question, and we may feature it on an episode. I’m Ashley, he’s Tony, and we’ll see you guys next time.

 

Henry Washington:
Today’s guest owns four rental properties that generate over $6,000 in monthly cash flow. And get this, he’s been investing in real estate for only eight months. People keep saying it’s just too hard to find real estate deals in 2026, but Joe Crocker is clearly proving them wrong. He’s not finding these properties by building lists or cold calling or even sending mailers. These are regular deals right off the MLS, deals that you or I or anyone else can find. He buys a property, adds some value, pulls his money out, and buys the next one. That’s it. Nothing complicated, nothing flashy, just a simple strategy that works. Plenty of people are sitting on the sidelines convinced they can’t get into the game. Meanwhile, Joe has already completed multiple deals this year, and he’s about to close on his best one yet. He’s even on track to quit his W-2 in the next two years, trading a grueling 70-hour work week for the thing most investors are chasing.
A cash flowing rental portfolio that gives you more money, time, and freedom. Hey everyone. I am Henry Washington here, co-host of the BiggerPockets Podcast. And today we’re bringing you an investor story with Joe Crocker from Houston, Texas, who just started investing, but is already well on his way to replacing his income with real estate. Let’s bring him on. Mr. Joe Crocker, welcome to the show.

Joe Crocker:
Hey, thank you.

Henry Washington:
Well, Mr. Joe, why don’t we start off and tell us a little bit about your background and what got you into real estate in the first place?

Joe Crocker:
Sure. So my background is long. I’m not a young man, but I’ll give you the highlights. I have a W-2 job that keeps me on the road a lot. Due to that, I had to relocate recently, end of last year. Came down to the Houston, Texas area and started researching real estate. I started studying the Burr method particularly was kind of what I honed in on. And I work with my mom and my wife both help me out because I’m on the road a lot. And so mom came down, we went and looked at some property, said, “Hey, let’s do it.” And so we closed our first transaction in December of last year.

Henry Washington:
Why don’t you tell us what traveling a lot means to you? Because I think it’s important to your story.

Joe Crocker:
Okay. Yeah, it is. So traveling a lot for me means I’m on the road about 300 nights a year.

Henry Washington:
That’s wild.

Joe Crocker:
And I work six 12-hour days.

Henry Washington:
You work six twelves and you travel 300 days a year?

Joe Crocker:
Correct. Yeah.

Henry Washington:
There’s a lot of people that are listening that want to get into real estate and they think they don’t have the time to fit this into their schedule.

Joe Crocker:
Well, my mom helps me a lot, so you need a good mother.

Henry Washington:
Yes, yes. Everybody does it with some sort of help. That is very true. For sure. So you said you moved to Houston and you started researching real estate, but why? What made you look into real estate at all? Why was that even on your mind?

Joe Crocker:
So it’s been on my mind prior to being in my current career. I worked in commercial construction. So I’ve been around real estate a lot throughout my life and have done well on personal properties. And so part of it also is with that lifestyle I just described, I’m getting older. I don’t want to do that forever. So I had kind of a backup plan, I guess you would say, is trying to plan my exit. And so I had to come here for work and I saw some opportunities and decided to jump in with both feet, so to speak.

Henry Washington:
Did you have a goal getting started or did you just want to jump in?

Joe Crocker:
Well, yes, to both of those things. I would look on Zillow and for about two months probably, I would go every night and I would just go drive properties that I saw and just check out the areas, see what I liked, and just kind of get familiar. And then I think it got to a point where we just went, “Hey, you know what? You got to pull the trigger.” And so we made offers on several properties and ended up with actually buying two at the same time. And so yeah, so we definitely jumped in with both feet.

Henry Washington:
It’s one thing to say making offers, but it’s another thing to be making the right offers. So you have to know how to analyze the deals and what makes a good deal in the first place. So was all that new to you or were you studying and analyzing prior to just making offers?

Joe Crocker:
Definitely studying and analyzing prior to making offers. I spent a couple months probably of actually driving every day and looking at things. I listened to your podcast and some other things, so it was familiar to me, but I really got serious about it. I would say I spent about two months of almost daily looking at properties, doing my own analysis, watching them, MLS properties, but you could see them. The ones I think are good deals, they all sell right away. Then that makes you go, okay, maybe that was a decent one. And so I spent about two months, I would say, before making offers.

Henry Washington:
Well, why don’t you tell us about that first one? How did you find it and what was the goal with it?

Joe Crocker:
The first one was on the MLS. It was a listing that had been up for a long time. One observation I made is that sometimes when things are listed for a long time, nobody looks at them anymore. The price goes down and the seller gets super motivated. So this was, I think, kind of one of those situations. And what it was was an estate sale where the guy was mid-flip and passed away. Oh, wow. So what was attractive to me about it is number one, it was two homes. It was a house and an ADU on the same property. So my goal was to hold it as a rental. So what attracted me to it is it was pretty easy. The cabinets were in, but there was no countertops, needed some trim work. The bathrooms were tiled but not grouted. As it turned out, I had to totally rip that all out.
But anyhow, it was a fairly light one. And so that was my thought on it was, hey, for the first one, I don’t want to go huge. I want to try and go as easy as I can. But anyways, we bought it for 134,000.

Henry Washington:
134,000. When did you buy this property?

Joe Crocker:
End of December of 25.

Henry Washington:
So this isn’t some five-year-old deal. You paid 130 some odd thousand dollars for a house in Houston, Texas.

Joe Crocker:
Yeah, and a guest house.

Henry Washington:
And a guest house. And you found it on the MLS.

Joe Crocker:
Correct.

Henry Washington:
There’s probably tons of people in Houston right now talking about, “I can’t find a deal. There’s no deals to be found. There’s too many investors here. You can’t do anything here.” So it can be done is what you’re telling me.

Joe Crocker:
It definitely can be done. So we’ve done three this year. I bought two of them were MLS deals, and I have one that we’re closing next week that’s also an MLS deal. So they’re there.

Henry Washington:
So tell us the rest of the numbers. You paid $134,000. How much work did it need, if any?

Joe Crocker:
Total budget was about 44,000, and I actually came in a little bit under that.

Henry Washington:
So

Joe Crocker:
I think we spent about 40.

Henry Washington:
So you’re all in at 175, and I’m assuming this was a rental because you said you honed in on the Burr strategy. So were you able to refinance this one already?

Joe Crocker:
We did. So we refinanced it right at 90 days. I did the refi. 161,200 is what our new loan was. So that was a successful Burr. It’s rented for 2,350 between the two units.

Henry Washington:
Not a perfect Burr, but that’s okay. I don’t think you need to pull off a perfect Burr. It looks like you pulled out about $13,000 and you were able to rent this for 2,300 on a loan of 161,000. That sounds like a pretty decent cashflowing deal that you found on the MLS basically in 2026. So I don’t want to hear anybody saying you can’t do this or you can’t do it in cities that are very investor heavy. Houston’s one of the most investor-heavy markets in the country. It

Joe Crocker:
Is.

Henry Washington:
And you walked in the door, found something sitting on the MLS. I love everything about this. I love how you found it. I love how you took it down. I love that you did everything people say you can’t do right now in 2026, all in one deal. Perfect. But you did say prior to telling us about this first one that you bought two at the same time. So I’m very curious what the second deal looked like, but we’ll dive into that right after the break. All right, we are back on the BiggerPockets podcast. I’m here with investor Joe Crocker, who pulled off a pretty decent Bird deal in Houston, Texas for his very first deal. Get this in 2026, and he found it on the MLS. But you also said you bought two at the same time. So I’m very curious what the second deal in this two-deal package looked like.

Joe Crocker:
All right. Well, get ready for this one. So I said I bought two, but they both had two separate units.

Henry Washington:
The second one had an ADU too?

Joe Crocker:
It had two full homes. Oh, wow. Yeah. So I bid off a lot, let’s put it that way. But that one was an MLS deal too. And I’ll tell you that the way that I found that one, and I’ll go through the numbers with you, but that one was one that was tenant occupied, so it was impossible to see. There was no sign in front. It showed terribly. I couldn’t even hardly get ahold of the realtor. And then the square footage was wrong on the MLS. And the big thing on that one is the tax assessment. I paid 295 for it and it was tax assessed at 780. So the taxes in Texas are huge. So the taxes were 13,000 a year.

Henry Washington:
Geez.

Joe Crocker:
Yeah, it was crazy. So especially for an investor that’s buying rental properties, that kills your cash flow.

Henry Washington:
See, everybody’s like, “Come to Texas. There’s no state tax,” but the property tax is crazy.

Joe Crocker:
But here’s the opportunity there. Since then, I appealed those taxes and I got them lowered to 5,000.

Henry Washington:
Whoa.

Joe Crocker:
Yeah. That was a big cashflow pickup.

Henry Washington:
Before we get there, I got to know the numbers on this deal.

Joe Crocker:
So

Henry Washington:
Tell me about it.

Joe Crocker:
There’s two homes. So the front home is about 1,500 square feet. It’s a three-bedroom, two bath. And then the rear home at the time was a two-bedroom, one bath. The front home was vacant, the rear home was occupied, and I paid 295 for the whole package. And the rear house at the time was occupied. He was paying 1,200 a month for the rear house. And the front house had been rented for 2,000 for quite a while. And so I was kind of looking like 1%-ish, and it seemed to work. So we ended up converting the garage in the rear house, so that’s now a three bedroom.

Henry Washington:
Nice.

Joe Crocker:
And then we redid the front house completely. It’s two blocks from the beach, so we’re going to end up doing it as an Airbnb and doing the short-term rental.

Henry Washington:
You said two blocks from the beach, so I assume this is Galveston.

Joe Crocker:
Yeah, down in Galveston. Yep.

Henry Washington:
Man, that sounds like a screaming deal. What kind of condition were these properties in? I mean, people were living in one of them, so I assumed that it was okay condition.

Joe Crocker:
Well, so it was decent condition. I mean, we ended up spending, partly because we’re doing a short-term rental, we ended up spending about a hundred fixing it up. We ended up just doing a DSCR loan out of the gate. We just put 20% down and got no prepay and just paid cash for all the improvements. So we’re in it right now, probably about 395, rough number. And it should be worth somewhere between six and seven.

Henry Washington:
Whoa. So you got somewhere between 100 and $200,000 of equity

Joe Crocker:
On

Henry Washington:
A deal you found on the MLS in 2026. That’s incredible, man. Congratulations. Congratulations. And so one of them’s a short-term rental, you’re keeping the back unit as a long-term rental?

Joe Crocker:
So I think our plan right now is to short-term rent both of them.

Henry Washington:
I’ll

Joe Crocker:
Tell you, my analysis you asked about that is I wanted to have multiple exits. So number one, could I sell it? If things didn’t go my way, can I sell it? Yeah. Two is, can I long-term rent it? Because the short-term, I mean, you said it worked down there in Galveston, 4,500 short-term rental permits. It’s pretty competitive. So my plan was I’ll try to short-term rent it. If that doesn’t work, then I’ll just put in long-term tenants, and if that doesn’t work, I’ll sell it.

Henry Washington:
That is a huge tip for anybody that’s listening, especially if you’re going to do short-term rentals. I don’t mind short-term rentals. I have, I think, four short-term rentals, but every single one of my short-term rentals, with the exception of one that I sold recently, could be a long-term rental. And the one that could not be a long-term rental, I had so much equity in it, I could sell it. Because short-term rentals aren’t like it was before, where you could throw furniture in anything, stick it on the market, somebody was going to rent it, it was going to make money. It’s not like that now. Most of the people who don’t know how to operate short-term rentals have exited the market or are actively exiting the market. So who does that leave in the short-term rental space? Professional operators, people who are very good at this, people who know exactly what their customers need, exactly where their customers want to be, provide them the exact experience their customers are looking for.
So if you’re going to compete with that, you have to be good too. And if you’re new, you may not be able to be as good, but you may not find that out until you get to start operating and it doesn’t produce the results that you’re looking for. And so if it doesn’t produce the results that you’re looking for, what do you do? Well, if you bought it and the only exit strategy you have is to keep it as a short-term rental, well, you’re in a world of hurt. If you can’t sell it and make money or break even, and if you can’t long-term rent it and make money or break even, then you’re going to lose money. It’s just a matter of when and how much. And so I always say buy with two exit strategies for every deal. If you’ve got two exits for every deal, you’re better protected.
It doesn’t guarantee you that you won’t lose money, but it makes it harder. And so you kind of already mentioned that you’ve already bought a third deal that you are short-term renting. So did you go specifically looking for one that you would do as a short-term rental now that you had found the other two?

Joe Crocker:
I’ll tell you what happened. If I was on Facebook one day in the investor group or whatever, and I see somebody had posted the wholesaler that had posted a condo for sale at this place. So I was in Michigan at the time. So I call my mom, I go, “Hey, can you go check out this condo?” So she goes over there, she goes, “Yeah, it’s good.” So the guy’s on the phone with me, he was asking, he started at 99,000 and it needed some work. So I said, “Hey, I’d be a buyer, but not at that number. I can’t make it work. There’s no way.” Because I treat it like a flip. So I’m kind of old school, 70% minus repairs is the most that I’m going to buy. Dude, me

Henry Washington:
Too.

Joe Crocker:
I still

Henry Washington:
Do that. I still analyze everything as a flip, even if I’m going to keep it as a rental because I buy it cheaper that

Joe Crocker:
Way. Maybe I learned that from you. I don’t know, but that’s definitely what I do. So as time ticks, he’s going, “Well, what will you do?” So I paid 73,000 for

Henry Washington:
It. Did you pay cash or did you get a loan?

Joe Crocker:
I just paid cash for it. Here you go. Here’s 73,000. And that was beginning of June, end of May. So since then, I’ve already rehabbed the whole place, furnished it. It’s been rented for 22 days in the month of July we have on the books.

Henry Washington:
Are you going to refi out of this thing?

Joe Crocker:
I already did. So we already got all our money back out of that one and it appraised at 143.

Henry Washington:
Nice. That was higher than you expected.

Joe Crocker:
Yeah, it was good. So I ended up being in it all in, including furniture and everything, about 90-ish, and it appraised at 143. So we ended up refinancing it at 60%. So we got most of our cash back. I think we had 83,000 was our name. So that’s good. And the kicker on a condo is the dues are 611 a month. And so you combine that with a couple hundred bucks in taxes and then your electricity because you’re paying for that. Everything else is included, but you pay for electric. And then your debt service, the payment principal and interest is about 600. So it seems like it’s going to be pretty good, but time will tell.

Henry Washington:
Color me impressed, man. Three pretty amazing deals in 2026, no less. In Houston, Texas, no less. And now you said, I heard you earlier, you said you had one under contract right now, so I’m assuming that’s your fourth deal. So come on, give it to me. Tell me

Joe Crocker:
About this

Henry Washington:
One.

Joe Crocker:
All right. So the fourth deal, I haven’t done the whole thing yet, but we’re going to close the next couple days. So again, two houses because that seems to be my thing. So it’s got a five-bedroom house in the front and then a two unit in the back. And there is section eight rented. So two of the three units are occupied. So I got under contract at 355. The front unit currently brings in 2,800 a month. And then the rear units are 1,400 apiece. Well, it gets better though.

Henry Washington:
So you’re bringing in 2,800 in the front, 2,800 in the back.

Joe Crocker:
5,600.

Henry Washington:
$5,600 gross

Joe Crocker:
Rents.

Henry Washington:
And you paid 350. 350.

Joe Crocker:
355.

Henry Washington:
My brain can’t even hold onto the numbers.

Joe Crocker:
So my plan with that one, we paid 355. We got about 75 in our construction budget to just bring everything up to nicer finishes. We’re going to put in quarter, even though it’s section eight. It’s going to be a nice place for people to live. And then actually the rents, when we do that, we can increase the rents. The section eight limits are higher, so we’ll be able to go up to 3,300 on the front unit. And then the rear units will go, one of them will be 1,730 and the other one will be 2,328. So we should be at about 7,300 a month cashflow.

Henry Washington:
So for the people listening, first and foremost, if you have a stigma in your head about Section eight, get it out of your head. There are good tenants and bad tenants in every price class. I don’t care if it’s top tier $3,000 a month rent or if it’s bottom of the barrel under a $1,000 a month rent. There are good tenants and bad tenants everywhere. Our job as investors is to be great at tenant selection regardless of the class of unit that we have. And so section eight can be very cashflow positive. And not only is it very cashflow positive in some markets, but obviously you get the guaranteed rents or a good chunk of that rent is guaranteed through the government. So in larger cities, places like Houston, typically section eight will pay higher than market value rents. In other words, you can get more rent out of a section eight rented house than you could if you took that house off section eight and just rented it traditionally.
And the amount of rent the government is willing to pay per house goes up based on the number of bedrooms. So if you can add bedrooms, you get more rent. So it sounds like the one you’re getting 3,300 on, that’s probably the, was it a five bedroom?

Joe Crocker:
Five bedroom. Yeah.

Henry Washington:
That’s fantastic. So if you’re in a larger city and you’ve already got rentals, you may want to call down to the housing authority and see what they pay for rents and see if it’s higher than what you’re currently getting, man. I love that. So 3,300, 1,730, 23, 28. And what’s your debt service on that?What are you paying for mortgage taxes and insurance?

Joe Crocker:
So I haven’t purchased it yet, so I couldn’t even tell you exactly what the payment will be, but probably about four grand a month, I’m going to guess.

Henry Washington:
I mean, that’s probably about right. Somewhere between 38, 42. But you’re bringing in after you fix it up, 73. Wow. That’s cashflow, folks. That is cashflow. Was this an MLS deal too? It was. Geez, man. Geez. Man, oh man. I don’t even got to do the math to know that that’s a screaming deal. Man, that’s awesome. And you’ve done it by using some of your own cash, but pulling it back out. I mean, these are just traditional things that people talk about, but I love hearing how people take these methods that we talk about and they implement them in their business, man. Fantastic deal. Why don’t you give us a summary? How many deals and/or units do you have, and what’s that putting in your pocket every month?

Joe Crocker:
So we have currently five, about to be eight once we get this next one closed. And I think that should cashflow us at about 6,000 a month net after all expenses.

Henry Washington:
I’ll take that all day long, my man. That’s incredible. And like I said, you were using some of your money, but it looks like you’ve been able to pull the majority of your cash back out.

Joe Crocker:
I would say by the time we finish up this round, I’m going to call it, we should have all of our cash back and probably then some.

Henry Washington:
So all your cash back in your pocket, plus you’re getting $6,000 a month in net cashflow. And sounds like we’re just getting started. All right, Joe, I do have a couple of questions for some of the newer investors who are listening who maybe want to be where you are 12 months from now. I’m sure you’ve got some lessons that you can share with them and we’ll dive into those right after the break. All right, we are back on the BiggerPockets Podcast. I’m talking with investor Joe Crocker, who has been killing it over the past 12 months doing multiple real estate deals that frankly anyone can do. And so I would like for you to share with our audience maybe some lessons that you’ve learned over the past 12 months because you’ve done a lot. It’s not just that you bought these eight units, it’s that you’ve renovated them and you have refinanced them and you are operating them.
And so what was maybe something that was a lesson on a deal that you weren’t expecting or maybe something that did not go to plan?

Joe Crocker:
So lots of things didn’t go to plan, so I don’t want to give the impression that this is easy. It’s definitely not. The hardest challenge for me has been the financing piece because I’m ready to move really quick. And I haven’t had the right lending relationship is how I’m going to say that. And I’ve tried a few different ones. So I’m still trying to work that out. That’s probably the biggest piece I would say. And then the other thing is sooner or later, you just have to do it. And that’s going to be your lesson. So for me, the first one, it was only $135,000 purchase. So I figured what’s the worst thing that’s going to happen? It’s not going to be worth zero. So my risk is fairly limited and it worked out good. But I think just my best piece of advice would be if you’re ready, just do it.
You got to do one. And it may not go perfect, but that’s how you’re going to learn.

Henry Washington:
If you’re starting with a single family home, I mean, as long as you’ve done enough analysis to at least have a general understanding of what kind of discount you need to be buying properties at, just buy it. Real estate, very rarely is it ever going to go to zero. You’re right. So your risk isn’t that you’re going to lose all your money. Your risk is that you might lose some money. You might have to deal with some headaches, but you’re going to learn something in exchange for that. And if a single family home not going well is going to put you in the poor house, then I’d say you’re probably not financially ready to invest yet. You need to save up some more cash before you jump in. That’s why it’s important that you take your bumps and bruises on a deal where your risk is limited.
So just be careful, protect yourself. I love that. Any other lessons or things that you wish you would’ve done different?

Joe Crocker:
I think the short-term rental, one thing I will say there, that looks really good at first glance, but there’s a lot to it. You hit it right on the head. You can’t just give people a bed. Nowadays you got to have this house, we end up putting in a hot tub and a fire pit and all this kind of stuff. And we do little, you’ll appreciate this. We do little gift baskets where we give them customized gear and a Bluetooth speaker and try and make it really an experience. But the Airbnb side, the other thing I didn’t fully anticipate is how much it costs to furnish a complete house. And people think it’s not very much. And I’m like, when you do three or four bedrooms, and I’m talking, you got to do everything, three sets of bedding, the bed, the mattress, the TVs, all that stuff.
You could spend 30 grand in the blink of an eye furnishing a house, especially if you want it to be nice. So that was one thing I kind of under anticipated a little bit. All

Henry Washington:
Right. Before we get out of here, I wanted to revisit something. You said that your second deal, which was the two SDRs on one lot, had $13,000 in annual taxes, and you were able to get that reduced to $5,000. How did you do that?

Joe Crocker:
So I anticipated that. That was one of the things. Just to give you a flavor of MLS, I called the realtor and I go, “Geez, the taxes are 13,000. Is that right?” And she goes, “Yeah, if that’s what it says, that must be what it is.”

Henry Washington:
Thanks, lady.

Joe Crocker:
Instead of saying like, “Yeah, hey, but you could appeal that and get it way knocked down.” So to me, I went, “That doesn’t make sense. I wonder if I get that knocked down.” So I did some research and you can do it here. It’s once a year and you get a pretty tight window. So I anticipated that as part of my buy was that I’m going to get them knocked down. So what surprised me, Henry, is how easy it was.

Henry Washington:
It’s so easy. People do not realize this. It’s so easy.

Joe Crocker:
Listen, here’s how easy it is for everybody listening, at least where I am. I filled out the form and then I went down to the place in person. So I sit down in the lobby for 10 minutes and the girl goes, “Yeah, come on back.” And she goes, “Tell me what’s going on.” And I go, “Well, hey, I just bought this property for 295 and it’s tax accept at 780, and that seems bananas.” And she goes, “Oh, okay. How’s your day?” “Oh, good. “She’s typing away. And then she goes,” Okay, are you good if we just drop it to 295? “And I go,” Yeah, I guess. “And she goes,” Yeah, your tax will be like 5,000. “I go,” Okay. “So that’s how easy it was. So it’s shocking. So I don’t know why you wouldn’t do that. I’m like lessen to myself every time I’m going to go down there.

Henry Washington:
Every year, folks, find out what your window is. In some cities, it’s a longer window. In some cities, you can do it whenever you want. You just need to figure out when you can do this. But yeah, you can challenge your property taxes. So a lot of times what happens with investors, guys, is you buy something and then you renovate it, and then you refi it. And then maybe a year down the road, six months, depending on whenever they do their inspections and assessments, you’ll get a letter in the mail that says, Hey, your property taxes are now why? And what most people do is they just say, “Man, that sucks. Okay, I guess there goes my cashflow.” But you don’t have to do that. You can challenge them. Some people, you have to provide comps to show that, hey, this property is similar and its taxes are lower.
And sometimes you just go down there and say, “Hey, I don’t think this is fair.” And then they just look on their computer and go, “Okay, how’s this sound?” And then your taxes are lower. But it’s very easy process. There are companies that will do this for you, but you don’t need to do that. You can literally negotiate these things yourself. And most of the time they will reduce your tax bill. Not always, but most of the time you can get a reduction, which is going to save you money and put more cashflow in your pocket. This is something everybody should be doing every year, but most people don’t do it at all.

Joe Crocker:
I agree. All

Henry Washington:
Right, Joe, thank you so much for coming on the BiggerPockets Podcast. I love that you’ve had so much success really in a seemingly short period of time. I’m curious though, have you had more or less or as much success as you thought you would in your first year of real estate investing?

Joe Crocker:
I’ve had a lot of road bumps along the way, getting all these projects done. But at the end of the day, I think it’s gone really good. So I think that probably now, if I look at it as going, here’s the portfolio and here’s what’s in there, I go, geez, yeah, we’re killing it. That’s great.

Henry Washington:
So what’s the goals moving forward? Are you going to continue to buy more? Are you going to just focus on paying off what you’ve got? Where are you headed?

Joe Crocker:
Oh no, I’m definitely not going to sit still. So my first goal is to get to 10 and trying to figure out our lending relationships. I think that’s the one thing that’s holding me back right now is you only have so much cash. And so working that piece out over the next year. And I think once I get over 10 projects completed, that door will really open up. So no, I want to keep grinding. I think 30 is where I need to be just in my head to maybe shift away from my W-2 employment and into doing this full-time. But if it keeps going like this, yeah, I’ll keep rocking it. It’s fun.

Henry Washington:
How much longer do you think it’s going to take you to get to where you want to be in terms of being able to not travel 300 days a year and work six 12s?

Joe Crocker:
I think somewhere between one and two years from when I started, I’ll be at a point where I will have replaced my income.

Henry Washington:
Hey, that’s pretty incredible, especially for starting in literally the last month of 2025 and getting this far now. Congratulations, man.

Joe Crocker:
Thank you.

Henry Washington:
We talked a lot about these amazing deals, and I think it almost gets lost that you’ve done all this while traveling 300 days a year and working six twelves. So if you are listening to this and you have been hesitating jumping in to investing in real estate because you don’t think you have enough time or you don’t think you have the resources or you don’t think you can find a deal, I hope you find some inspiration in this story because none of those things are true. You can absolutely do this. You just got to do it. And I know that sounds cliche, but just talk to Joe. You just heard him for the last hour telling you he just did it. This is not an easy business. It is challenging and scary and uncomfortable, but it’s a simple business. Buy something that you can add some value to, add the value, monetize it at its new higher price, rinse and repeat.
If you do that, you’ll look up in 10 to 15 years and realize you’re pretty wealthy. And that’s super stinking cool. Thanks for sharing, Joe.

Joe Crocker:
Welcome. Thanks for having me.

Henry Washington:
All right guys, thank you so much for listening to this episode of the BiggerPockets Podcast. And if you, like Joe, have a pretty amazing real estate investment story and you’d love to come on the podcast and share it with us, then go to biggerpockets.com/guest and fill out the form. Maybe we’ll get to interview you on the show and you can share your story with our audience. Thank you so much for listening to this episode. We’ll see you on the next one. All