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The Stages of Real Estate Investing (Where Do You Stand?)

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Within 10 years, today’s guest went from zero experience in real estate investing to millionaire through investment properties. Now, she’s reverse-engineering her path, showing you how to do it faster, even if you’re just getting started on your first deal. Almost every (successful) real estate investor goes through a few crucial “stages.” Today, we’re breaking them down so YOU know where you stand.

First: Do you know how a mortgage works? If so, you’re already further ahead than Leka Devatha was a decade ago. She was not only an immigrant to the United States, but also had extremely basic financial knowledge, far from what a “real estate investor” should possess. However, even starting from zero, Leka was able to scale not only quickly but efficiently. A decade later, she’s one of the leading voices in real estate investing, with a financially freeing rental portfolio and fun projects that make her massive six-figure profits.

We’ll detail the different investing stages, from complete real estate rookie to expert investor, plus show you how to get the funding for your first or next deal, how to buy back your time, and make more money while having fewer properties (it’s very possible).

Dave:
This investor found a formula that works in his market and he’s stuck with it for almost two decades now. He has almost 30 rental units, which will give him the option to retire from his day job by age 50 without compromising his lifestyle in retirement. That’s the power of real estate. You choose the strategy, you control the investments, and over time they’ll start putting life-changing money into your pocket. Let’s hear how we, Hey everyone. I’m Dave Meyer, head of Real Estate Investing here at BiggerPockets. I’ve been buying rental properties for 15 years now, and on this podcast, we teach you how to achieve financial freedom through real estate investing. Today we’re bringing you the story of an investor named Tony de Giacomo. Tony lives in Rhode Island and he’s invested through almost every era of the last couple of decades, starting before 2008, then continuing after the crash and buying properties consistently through the pandemic and up to today.

Dave:
And what I think Tony’s career shows is that it’s possible to buy real estate at almost any time. You just need to focus on a strategy, understand what a good deal looks like in your market, build the necessary relationships, and be willing to act when the right opportunity arises. Tony is doing all this and has been for a long time. He now has 12 different properties that are going to fund his retirement long before the traditional retirement age, and he’s not doing any crazy direct to seller, time consuming marketing or risky financing strategies. He’s just following the principles we preach on this show every single week. So if you’re not sure how to get started buying properties or even if real estate is right for you, Tony’s story might change your mind. Let’s bring him on. Tony, welcome to the BiggerPockets podcast. Thanks for being here.

Tony:
Happy to be here. Thanks for having me.

Dave:
Yeah, this going to be a fun episode. I’m really eager to hear about your investing journey. It sounds really interesting. So tell us where it began.

Tony:
So where it truly began was when I was a child. So my father, who was an immigrant, came to America factory worker, heard from a coworker that he bought a rental property and the tenants are helping him pay down the mortgage, and he’s hoping that would be his financial freedom. So my dad thought that was a great idea for himself. So throughout the years, he bought a few of those properties when I was very young and I would paint with him, I would collect rent with him, I would be a property manager with him. That’s really where it started. So it was something that I always planned to do and right about once I finished college is when I started buying my first rental property, which looks very different from what I invest in today, but that’s when I truly dipped my toes into real estate, so my early twenties.

Dave:
Wow, okay. That’s a really cool story. I imagine that getting exposed to the property management side of investing right away could take you one of two ways, right? You could either really like it and say, wow, this is a powerful financial mechanism, or there are some people who get a taste of that and just don’t like it at all. But it sounds like you liked it from a young age.

Tony:
Yeah, I think that I enjoyed the process, but I watched it long enough to see the financial freedom part as well. I got to fully understand what time in real estate can do for you. So it was an obvious choice for me to invest in real estate.

Dave:
And you said you got your first rental property relatively young. Were you just straight into it trying to do it full-time or were you doing another job as well?

Tony:
I was doing multiple jobs, so I was that kid that would work breakfast at a restaurant, then go out. I started a landscaping business. I was mowing lawns in the afternoon. I was working at a pizza place at night and I was living at home, so I was saving every dollar that I possibly could, and I put a huge down payment on a small condo, which in hindsight, I would’ve done things differently. But I’m glad I dipped my toes into the real estate game, and that was my first property. It was $110,000 condo that I rented for $750 a month and I put 50% down.

Dave:
Awesome.

Tony:
As a young kid, and that was my beginning. And you stayed living at home? I stayed living home. I actually lived at home until I bought my fourth property. So I own three rental properties living at home, and I’d go around and collect rent and go back to mom and dad’s house.

Dave:
I imagine that really helped. Being able to save every dollar that you were earning from those other jobs and put it back into real estate must have really accelerated your investing career.

Tony:
Absolutely. So I was putting down as much as I possibly could to keep mortgage payments as low as possible. Again, like I said earlier, I think I would’ve, knowing what I know today, I would’ve handled that differently. I would’ve leveraged things a little bit more, but there’s no mistakes. There’s only lessons learned. So I’ve learned from that and I’ve grown from that. Can I ask you what year this was when you were starting out? So that was in 2004. I bought my first property.

Dave:
And so these first three deals, it sounds like at least or maybe more, were prior to the crash, right? So how did that go for you?

Tony:
So you hit that perfectly? Yes. The first three deals were before the oh eight crash, and then I started evaluating deals and everything seemed super exciting. So the three prior deals didn’t look as great anymore. Now I’m trying to GOP up as many properties as possible, so now I’m putting down as little as possible and I’m buying two or three properties in a year and really being able to pick and choose the properties I want to buy. People are reaching back out to agents are asking you, how can we put this deal together? I had my real estate license during that time as well, so I built a lot of connections in the real estate game. So closing attorneys knew about me. They knew I’d like to invest in properties, real estate agents, so sometimes I was able to buy a property that they just couldn’t move, and I’d named my price and sometimes that would stick. So the next five or six deals I bought were incredible. In hindsight, it’s interesting. We were

Dave:
Just talking about leverage, and I’m curious if you think that having put down a lot more money in that those first three deals helped you get through the 2008 situation because some people who are putting down three 5% during that time didn’t make it through the other side.

Tony:
Sure. So on top of owning the rental properties, I’ve always had a stable job. So I own the landscape and business that started in high school and has grown to where it is today with eight employees, 200 plus accounts. And so managing and bringing that income in has allowed real estate to kind of grow on its own. So there was always a backup financial plan if needed. So there wasn’t much of a fear of losing those properties or not being able to pay the mortgage there. I think even with small down payments, it would’ve been, okay,

Dave:
Now let’s talk about those deals you did during the financial crisis. Everyone I’m sure is looking back at those times thinking, man, I wish I had bought. But it was also kind of scary during that time. The bottom was kind of dropping out of all these markets and there was no clear sign of when it was going to turn around, and at that point, I don’t think anyone knew how quickly prices would recover over the next decade. So what were you looking for during that time period?

Tony:
Sure. So whether this is right or wrong, I was kind of looking for the cheapest multifamily properties that I could get my hands on. I did hear one time in a podcast someone saying that that’s often a mistake. People are looking for good deals rather than good properties. And I kind of wish I heard that earlier because those properties appreciated much faster in my local area than these rental properties. However, that’s what I was after. So I was buying properties where a longtime landlord had a troubled tenant, the place was destroyed, they wanted nothing to do with it, they weren’t going to put it on the market, and they would say, just assume the worst. I mean, I bought properties where I wouldn’t even look in some of the units and they told me to assume the worst in those units, and sometimes it was the worst.

Dave:
Oh god,

Tony:
It’s pretty rough. I purchased properties where the radiators froze and the heating system was gone. I purchased a few inhabitable properties that just needed full gut job renovations, and that’s where I started using line of credits as a huge tool. Still to this day, think line of credits are most valuable tools that you can use in real estate. So being able to purchase these properties with a line of credit, renovate them with a line of credit, and then putting traditional financing on it, freeing up that line of credit again, and then just rinse and repeat. For

Dave:
Those in our audience, Tony, who aren’t familiar with the term line of credit and what it can be beneficial for, can you just fill them in?

Tony:
Sure. So a line of credit is typically equity that you have on a property that you can go to the bank and say that I want to borrow against this property without putting a complete fixed term on it. What you’re looking to do is basically have the ability to borrow against it and pay interest only on it, and you only pay interest if you are borrowing that amount of money.

Dave:
I mean, you can kind of think of it like a credit card. You’re basically only paying when you use the money that you are tapping. And so oftentimes what happens to real estate investors is you have this very fortunate problem where you build up a lot of equity in your properties, which is great, that’s adding to your net worth, but sometimes it gets a little bit trapped in those properties and you can’t use it. Then that net worth that you’ve built up to go acquire new properties and to scale your portfolio. And some people choose to either sell those properties, some people choose to refinance those properties, but a line of credit, I agree with you, Tony, is sort of this underrated way where you can hold onto that property, keep the equity there, but then use that asset with a bank to borrow against it. And you can use that either to acquire new properties or to renovate properties too. To pay for construction is also a common way that it is used as well.

Tony:
One of the other ways that I’ve used that is for new construction. So I’ve done some spec homes, so you don’t need to go into the construction loan route, which is typically pretty expensive. The bank is very involved, so now you have the freedom of basically acting like cash. So the line of credit is essentially using cash, so you can make cash offers on properties, you can build a house, you can pay your subcontractors through cash and then put your fixed financing on it. Or if you’re selling the property, taking those funds and paying down the line of credit to zero again and starting all over.

Dave:
Yeah, it’s a great way to really leverage the assets that you already have in real estate. I want to sort of fast forward to 2020, the pandemic, how you’ve been scaling in recent years. We hear it from investors all the time. They spend hours every month sorting through receipts and bank transactions trying to figure out if they’re actually making any money, and when tax season hits, it’s like trying to solve a Rubik’s cube blindfolded. That’s where baseline comes in. BiggerPockets official banking platform. It tags every rent, payment and expense to the right property and schedule E category as you bank. So you get tax ready financial reports in real time, not at the end of the year. This way, you can instantly see how each unit is performing, where you’re making money and losing money and make changes while it still counts. Head over to baseline.com/biggerpockets to start protecting your profits and get a special $100 bonus when you sign up. That’s baseline.com/biggerpockets. Thanks again to our sponsor baseline. Let’s fast forward a couple of years, Tony, because I want to talk about how you’re scaling in today’s market. Let’s just go to 2020. Where were you at that point?

Tony:
So at that point I continued to invest and some of the early properties just kept exploding in value, and so equity was there. So I continued to pull line of credits. I was really gearing up to have the ability to purchase more properties scale up, and I’m glad I positioned myself that way because once COVID came, there was a lot of uncertainty what would happen with real estate. And in my area, like many other local areas, real estate prices just went through the roof. So these two families or small rental properties were being gobbled up by first time home buyers because that was their only ability to get into real estate or buy a home. So now we’re competing as investors with first time home buyers and we can’t make the numbers work. So it was time to pivot and get away from two or three family homes and go into other things. So some of the more recent projects, I built an industrial garage complex, so renting out to contractors, which is a really great business, I wouldn’t mind doing that again because the tenant pool is easy to work with. Contractors storing their equipment or whatever they need to store their business for, it’s their livelihood, they’re paying their rent, there’s not much to maintain. It’s basically a square box with a bathroom That has worked out really well so far.

Dave:
That’s pretty cool. I imagine that being in the industry, running a landscape company, you probably understand this really well and we’re able to see a unique market opportunity. I don’t know hosting the show for a while now. I haven’t heard anyone do something like that. It seems like some mashup of self storage and industrial property. It’s pretty cool.

Tony:
It’s basically what it is. So the unit size that are 20 by 40, so they’re 800 square feet with large oversized garage doors. I think they’re 14 feet tall, so you can get larger equipment in there and the tenant pools a mixed match of a plumber, someone who stores cars in there, another person just stores household items in there. So just an oversized self storage unit. It’s a very clean business.

Dave:
I’ve noticed that the same thing you said that in the last couple of years, the two to four unit segment has gotten extremely competitive, whether it’s from homeowners, it’s basically the house hacker dream,

Tony:
And

Dave:
As Tony noted, the numbers for someone who’s buying to use it as a house hack and as an investor are just different because as a house hacker, you don’t need to cashflow to make that work for you. You just need to lower your overall cost of living, whereas I assume, Tony, you are looking for a solid cash on cash return on par with your other investments and two to four units just aren’t there in a lot of markets right now. I’m noticing that change a little bit in the last couple months, but I definitely agree over the last few years. I’m curious why you went to more of an industrial model instead of, for example, going into larger multifamily or single family homes, which would be a business that you sort of were already running.

Tony:
Sure. So on top of that, I’m still dabbling into other projects. So one other project I’m currently working on is taking an old commercial building and converting it to condominiums. Oh, cool. So we’re probably about a year and a half into this project with approvals, some environmental stuff. It’s along the river, so there’s coastal resource management. We’re working with town planning. It’s a comprehensive plan. So I have an investor that I’m working with on that project, and we’re basically going into a 14 unit condominium complex that we’re going to be building out.

Dave:
Wow, that sounds like an awesome project. And what’s the timeline going forward from here?

Tony:
So we are coming up for final voting at the town. So we had multiple planning and zoning meetings to iron out all the details. Our next meeting is for our final approval, which there was no request at our last meeting for updated details. So once that happens, we start the environmental work because it was a dry cleaners before we purchased it, so there was some chemicals that went into the ground. So we have to work with that and then we start our project of renovating it into a residential complex.

Dave:
Nice. Well, good luck. It sounds like a super cool project. I’m curious, Tony, you started buying a condo, you bought a bunch of multifamilies. What was the transition like to doing some more active work, whether that’s heavy renovation or this ground up development kind of stuff that you’ve been talking about? Was that transition difficult?

Tony:
I think along the way there was enough smaller projects that got me to this point. I did purchase a couple pieces of land that was just raw land that needed approvals. So single lots for a single family home that I work with engineers and architects on to put up a home to sell. And I think just those small projects pretty much gave me the background that I needed to scale up. Essentially it’s the same process just at a larger scale.

Dave:
And in those smaller projects, did you get to know contractors in particular, subs, that kind of stuff that you could use in the bigger ones?

Tony:
Absolutely. So I feel like with every project I constantly fine tune that list. That list of people has changed over the years, but when I find someone that I really enjoy working with that I can trust, it’s so valuable to be able to call that person and say, Hey, I’m doing this project. You are going to be the plumber for this project, and I know they’re going to treat me right and treat me fairly. So I’m constantly trying to build that team so that I don’t need to interview and shop new people every single time.

Dave:
I’m sure for a lot of people listening, the appeal of new construction and these conversions is pretty high. It’s appealing to me too. Would you recommend following the path that you have where you started small and built incrementally rather than going from a couple of rental properties jumping straight to larger multifamily or more hands-on construction type projects?

Tony:
Yeah, I would say growing slowly is probably the safest approach to it. There’s a lot of things that can go wrong in real estate and you want to eliminate as many of those as possible. So through time and experience and projects, you hope to be able to eliminate as much of those as you can.

Dave:
Got it. Yeah, I think that’s a really great sort of measured approach. And if you’re in this game for the long term, this is just a really good way to mitigate risk. It may mean that you’re not getting the upside of these huge construction deals right away, but these construction projects are risk too. The reward comes with risk, and to me at least the way to mitigate risk is to build up to that much in the way that Tony is talking about and taking a couple extra years. I’m not saying take a decade, but building your way, building confidence, learning those skills can be a great way to enjoy some of the benefits of these bigger projects without taking on more than you can chew right up front. So Tony, we sit here in 2025. Can you give us a little overview of what your portfolio sort of holistically looks like today?

Tony:
Sure. So it’s about 15 total properties that probably adds up to 25 to 30 doors. It’s a mixture of the industrial garage of five unit property and then mostly two to three unit homes in a few single family properties.

Dave:
How do you think about growing it from there? Because you have a bunch of different assets. Are you trying to grow in one particular area? Are you thinking about trading out any of the older properties or what’s your plan?

Tony:
So I think the older properties are the retirement plan. So that will be the cashflow that allows me to live the lifestyle that we want to live. Once those are fully paid off for that cashflow will be our income. What I want to do is projects, like I’m doing the condo project, I want to do maybe small subdivision projects where I’ll build multiple houses or take a raw piece of land, convert into 10 buildable lots, and then build out one or two homes a year. So those are the kind of projects that I want to start diving into because you weed out some of the competition and being able to do that, and you kind of project multiple years of real estate projects where if you do a cosmetic makeover where you can do it in three months, well you got to start searching for the next project pretty quickly after that.

Dave:
The older ones being your retirement plan is that’s just because you have fixed debt and the cashflow has just risen to a point where they offer the best cash on cash return.

Tony:
Well, yeah, and also because I did mostly 15 year financing on most of them, most of them are either paid off for or close to being paid off for. So that cashflow now is being used to reinvest into real estate. But the day I decide to retire from my nine to five, which is essentially my landscaping business, I can use the rental income as my passive income to continue to live. So

Dave:
What are your goals going forward? You have so many cool things going on. Do you have a plan to retire a date in mind?

Tony:
It’s a good question. I’m 41. I would like to retire from the need to work at 50 years old, but to truly retire is probably not something that I’m interested in. These real estate projects are fun for me. Taking a home that needs a facelift that might need new landscaping, new siding, windows, bathroom, a cosmetic makeover, that’s a fun project. I like checking in on it. I like seeing it come to life and I love the day that we’re listing it for sale or for rent. Walking someone through a property and seeing them get excited about something that you did is pretty cool. So that doesn’t feel like work to me.

Dave:
I love that. I think so many people focus on quitting their job, and it’s cool to hear that for you, the real estate part of it, it’s as good as quitting your job, right? Because it’s just something you enjoy doing. Do you think you’ll scale back on the landscape business at all and just keep doing real estate?

Tony:
Yeah, I think that’s the future plan.

Dave:
The

Tony:
Landscaping business has great. It’s gotten me to where I am today. It’s allowed me to invest in real estate pretty aggressively. It’s allowed me to reinvest my real estate profits back into real estate, but it takes a lot out of you managing employees, managing clients. It’s a lot of work. So that will be the big relief in life one day, but it’s not any day soon.

Dave:
Well, not that far away, but yeah, nine years, something like that. That’s a great goal. Being retired or work optional by 50 is fantastic. And just a testament to the power of real estate investing. If you play the medium to long game, and it doesn’t have to be that long, but being able to do this in 20, 25 years like you’ve done and create an amazing life for yourself is very admirable. Given that that you’ve had all this success, you’ve been doing this for 20 years, you’ve done a ton of really cool stuff, what advice do you have for investors who are trying to either get started or scale up their portfolios in this new era of real estate investing that we’re in?

Tony:
Yeah, so this reminds me of a question that used to be asked on this podcast when I’ve been listening long enough when I remember there was the famous four at the end of the podcast.

Dave:
Yes. Oh yeah.

Tony:
And I’d always think to myself, how would I answer this question? And it was interesting to hear all the different responses to those questions. And one of them was similar to what you just asked, and I always felt like the answer to that is the people that think you’re going to get rich the day you buy a property is where the mistake is. Real estate is really a long-term game. It’s not a get rich quick strategy. Sure, there’s always stories of someone who flipped a home and did exceptionally well on it, but that’s not the proven point of real estate. So what’s proven over time is if you invest in real estate and you invest strategically in time, it’ll be a really great payoff.

Dave:
I love hearing that. I totally agree. There are fun short-term wins, right? It’s great if you flip a house or you do a burr or something and it’s great, and that can really change your life. But real estate, the mindset I think is really what’s important is that even if you get those short-term wins, the long-term approach is going to help you target the right types of properties, use debt in a responsible way, build relationships with your tenants, build relationships with contractors, and seeing this as a real business that you’re investing not just your money, but your time and part of your life into is super important to success in this industry. Otherwise, you might just find yourself super disappointed because the reality is it takes work, but I mean, as Tony’s shown, it takes work. But in 15, 20 years, you could really change your financial situation. You can retire realistically in one, two decades instead of four or five decades. That to me is, but if you think about the grand scheme of things, that’s still really short compared to what most people are working to reach retirement.

Tony:
And I think it sets up for a retirement that is not much different than the lifestyle that you live today. So I find a lot of people who retire from a typical nine to five have to make adjustments to their lifestyle. And that’s something I promised myself I wouldn’t do. I didn’t want to work my entire life to then start penny pitching in retirement. So I wanted to create a retirement where I could continue to live the lifestyle that we’re living during our working years.

Dave:
That’s really cool. My parents recently retired and they both told me they heard something that you should also retired to something not from something. And I think that’s really important too. If you’re just trying to quit something and have nothing else to do when you’re done with it, that is dangerous. I think a lot of people find themselves bored. You hear a lot of people who are retired go back to work, but I think the way you’re setting it up, not just from a financial standpoint, not changing your lifestyle, but still having something to do, something you like doing in retirement, and maybe the pressure is off, which is fantastic, but you’ll still have some things that get you excited and get you out of bed in the morning. Right.

Tony:
Yeah. I love what your parents said. I think that makes a ton of sense and something I’m looking forward to. I have two young daughters, 11 and eight years old, and I want to guide them into real estate, so I want to help them with projects. I could be the boots on the ground as they’re running around and managing their family and their life, and I could be at the point in my life where I hang around their projects. So that would be a really cool thing for me to see one day.

Dave:
That would be awesome. What a dream, right? You could be a stay in real estate, help your family. That would be really, really cool. Well, I am sure you’ll be there. It’ll be multi-generational real estate investing going from your dad to you, to your daughter’s. That would be a really cool story.

Tony:
Right.

Dave:
Well, Tony, thank you so much for joining us today. This has been a really fun conversation. Thanks for sharing the story and your insights with us.

Tony:
Yeah, thanks for having me on. This was really cool. It’s an awesome experience to be able to listen to this podcast pretty much daily and then being a guest on the show is pretty great. So thanks for having me.

Dave:
Of course. And thank you for listening for so long. We really appreciate it being such a great member of the BiggerPockets community. Thank you all so much for listening to this episode. And I should mention, if you have a story like Tony, you’re listening to this podcast and you have a cool story to tell, we are always accepting guest applications. You can go to biggerpockets.com/guest and fill it out there. Thank you all so much for listening to this episode. We’ll see you.

 

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What Really is the Upper-Middle Class and How Helpful is Real Estate in Getting You There?

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Everyone calls themselves “middle class.” No, really—just 10% of Americans identify as lower class, and only 1% identify as upper class. 

But by definition, not everyone can actually be “middle class,” or the term loses all meaning. 

If we can’t even define “middle class,” how can we define the more narrow “upper-middle class”? 

Regardless of how you define it, however, real estate investing can definitely get you there faster.

A Few Numbers to Define Upper-Middle Class

One way to define the upper-middle class is by net worth. 

For the sake of argument, let’s call the bottom 25% of percentiles lower class, the 25th-75th percentile middle class, the 75th to 90th percentile upper-middle class, and the top 10% upper class. The most recent Current Population Survey from the Federal Reserve shows that Americans in the 75th to 90th percentile have a net worth of $658,340 – $1,920,758. 

Alternatively, you could define upper-middle class by income. Using the same range of the 75th to 90th percentile, that would mean a household income range of $144,770 – $234,769 (using the same CPS data). 

Some analysts ignore percentiles in favor of a different approach. A 2025 analysis by GoBankingRates defined the middle class as those earning between two-thirds to double the area median income (AMI). That comes with the advantage of being more targeted, as local incomes and costs of living vary dramatically across the country. 

For instance, a household income of just $85,424 would land you in the upper-middle class in Mississippi. But in Maryland (where I just moved back to from Peru), it takes at least $158,126 to qualify. 

How Real Estate Gets You There Faster

No matter which metric you use, I count as upper-middle class (even if it doesn’t feel that way here in the States, after living abroad where I truly felt upper-middle class). 

I’ve worked in real estate since I graduated from college in 2003, and I can tell you firsthand that real estate investing helped. But I’ll also share a few firsthand stories from other investors who have landed squarely in the upper-middle class as well.

Opportunity for asymmetric returns

I’m not one of those real estate guys who hate stocks. Stocks can do wonders for your portfolio: They have historically returned 8%-10%, they’re liquid, they’re passive, they come with a low minimum investment, they’re easy to diversify with index funds, and it’s easy to invest in them with tax-advantaged or taxable brokerage accounts. 

But I routinely earn returns in the mid-teens or higher from my passive real estate investments. 

For example, I just got this quarter’s distribution from a land investing fund that my co-investing club went in on together last year. It pays 16% in distributions every year like clockwork.

Every month, I get together with other members of a co-investing club to vet deals together. The low minimum investment ($5,000) per person is nice, but where the investment club really shines is in vetting deals as a community. We hop on a Zoom call to grill operators together, and we all discuss the risks and returns. 

Having that many eyeballs on an investment reduces risk—and helps us find deals with relatively high returns and moderate risk. Read: asymmetric returns.

Leverage

Whether you invest passively or actively, leveraging other people’s money can enhance your real estate investment returns. 

Austin Glanzer of 717 Home Buyers had almost no cash when he started investing in real estate at just 20 years old. Yet, he was able to buy his first property with an FHA loan, then lean on that to help him buy the next one. “I didn’t grow up with money, but learning how to leverage FHA loans and reinvest cash flow helped me quickly build a portfolio of five rental units,” he says. “Those units now generate over $3,000 a month in cash flow and are worth over $500,000 today.”

You don’t need much to get started. Once you’re in the game, though, a new set of opportunities opens up. 

Path from active business to passive income

To convert most businesses from active labor to passive income, you have to hire people to do all the different roles you previously worked as the founder. 

But house flippers have an easier path. Rather than selling after they finish renovating properties, they can simply refinance and keep some for themselves as rentals. 

It’s called the BRRRR strategy: buy, renovate, rent, refinance, repeat. When you refinance, you can pull your down payment back out of the property, letting you recycle the same down payment to buy property after property. 

There’s no limit on how many rental properties you can buy with the same down payment—or the returns you can earn on that cash. That’s why some real estate investors refer to this strategy as offering infinite returns. 

This form of leverage can pave a quick path to financial independence. “I started flipping homes in the Chicago area, but quickly realized the power of owning cash-flowing rentals,” explains Samuel Wooten, owner of Two Rivers Properties. “Within just a few years, I had built enough passive income to cover my living expenses. And that says nothing of the equity stacking up on top of that.”

Appreciation

As Wooten pointed out, investment properties don’t just generate income. They also rise in value over time, creating equity. 

You can cash out that equity in many ways. Sure, you could sell properties. But you could also offer them up as cross-collateral to avoid making a down payment on a new property. Or you could refinance them every 10 to 15 years, letting your tenants pay down your mortgages for you before cashing out the equity all over again. You could also take out a HELOC against them, perhaps even replacing your existing mortgage to use velocity banking to pay down the debt faster. 

Leverage helps you earn outsized gains on your cash investment in real estate. To use easy math, imagine you buy a $100,000 rental property, financing 80% of it with a loan. It appreciates by a typical 4% in the first year, rising to $104,000 in value. That $4,000 gain translates to a 20% return on your cash down payment of $20,000. 

George Shada of G&R Investment Group explains that he didn’t start investing in real estate thinking he’d get rich (although he has, by many definitions). “I just wanted more freedom than my old day job offered,” he adds. “But after buying my first rentals in Lincoln, Nebraska, I started to see how powerful this business could be. Now I own a portfolio that not only generates income but has grown substantially in value. Real estate gave me a clear path to the upper-middle class by turning sweat equity into actual net worth.”

Tax benefits

One of the members in my co-investing club, Dan F., always asks first and foremost about tax benefits. 

He has “too much” passive income (talk about a good problem to have). So he likes syndications for the huge depreciation write-offs in the first few years. He gets to show a loss on his tax return to offset his other income streams, even as he collects distributions in real life. 

That depreciation write-off was just supercharged, with 100% depreciation being made permanent by the One Big Beautiful Bill Act (now law). 

In fact, this upfront depreciation also enables the “lazy 1031 exchange” strategy. As old investments sell off and pay out, you can offset both the capital gains tax and depreciation recapture with new depreciation from new passive investments. 

And you don’t even have to putz around with qualified intermediaries, the 45-day rule, or the 180-day rule like you do with actual 1031 exchanges. 

Want to Join the Upper-Middle Class?

You don’t need an advanced degree to earn a high income or grow your net worth with real estate investments. 

The investors I referenced? None of them have advanced degrees or a history of earning huge salaries. They joined the upper-middle class by simply learning how to invest in real estate. 

Not only can it help you get there, but it can help you stay there. I invest passively in real estate every month to keep growing a diverse portfolio that both generates income and appreciates in value. And, of course, helps lower my tax bill. 

Join the upper-middle class—and then keep right on going to reach financial freedom.

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Even if the Fed Cuts Rates This Week, You Should Still Play Defense—Here’s Why

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The Federal Reserve meets this week, and it’s possible that a rate cut is coming. By how much? Who knows, and who knows if it will even happen?

But let’s get real for a second. As a real estate investor, you’re still facing real challenges. Multifamily cap rates are creeping up, debt is still pricey, and new apartment supply is hitting markets that were on fire just a couple of years ago.

I know it feels like things are stabilizing, but trust me: Now’s the time to play defense, not relax. Let’s unpack this together.

The Big Picture: Numbers Can Mislead You

OK, yes, inflation is down to about 2.7%, which seems good, right? But here’s the catch: The Fed is still cautious, rates are hovering around 4.5%, and that isn’t exactly cheap money.

And real estate? It’s telling a completely different story. Multifamily cap rates have expanded by about 50 to 100 basis points. Translation? Your properties might not be worth as much as you think, and borrowing is still expensive. Plus, insurance costs—up almost 8% this quarter alone—aren’t making things easier.

Meanwhile, there’s a huge surge of new apartments hitting hot markets. We’re talking over half a million units in places like Austin, Phoenix, and Tampa. That’s slowing rent growth down to just under 1%. Not exactly the rent bumps we all banked on, right?

False Security: High Occupancy Isn’t Everything

I get it: Your occupancy looks good, maybe even great. But let’s be honest—occupancy alone won’t protect your bottom line. Expenses like property taxes, utilities, and labor are sneaking up fast, eating away your cash flow quietly.

Imagine you’ve got a 50-unit building in Phoenix. Occupancy’s strong at 95%, but your property taxes jump by $25,000, and utilities spike by another $10,000. Even though you raise rents a bit—say, by 2%—your net operating income still drops by around 7%. Ouch.

Hidden Cash Flow Killers You Need to Watch

Let’s talk about some sneaky ways your cash flow could get hurt, even if you’re fully leased:

  • Late payments: Even a small rise in tenants paying late is like an interest-free loan you’re giving away every month.
  • Slow leasing: If it’s taking longer to fill vacancies, you’re losing cash, plain and simple.
  • Deferred maintenance: Those minor repairs you put off? They can become expensive emergencies before you know it.
  • Legal problems: One lawsuit can wipe out months of profit instantly.

Why Protecting Your Cash Flow Matters Now

Refinancing right now isn’t cheap. Missing a single mortgage payment? That could tank your returns. Your goal right now is to keep as much cash flowing consistently as possible. The smart play is defensive: control your expenses, stay on top of collections, and keep your reserves healthy.

Your Defensive Checklist (Easy Wins)

Quick actions you can take today:

  • Insurance audit: Seriously, don’t skip this. Companies like Steadily make it super easy to spot gaps.
  • Preventive maintenance: Spend a little now on things like HVAC and roof checks to save big later.
  • Tenant management: Catch and address delinquencies early. This is about cash flow security.

Insurance: The Real MVP You Didn’t Know You Needed

Nobody likes paying insurance premiums. But guess what? When disaster hits, insurance isn’t just nice to have—it’s your financial lifeline. 

Small premiums are way better than huge, surprise expenses. Fast insurance payouts keep you operational, protect your reputation, and let you sleep better at night. 

And the best insurance partners for real estate investors? Steadily. 

Steadily is rapidly becoming the go-to insurance solution for real estate investors because it was built specifically with landlords in mind. Unlike traditional insurers, Steadily combines specialized landlord-focused coverage, competitive pricing, and seamless digital convenience. Investors love it because they can get quotes in minutes—no paperwork headaches or days of waiting. 

Steadily covers all rental property types nationwide, including short-term rentals like Airbnb. They proactively help landlords reduce risk through innovative tech (like leak sensors) and a user-friendly app. Steadily makes landlord insurance fast, easy, and worry-free, so investors can focus on their properties, not their policies.

Seven Quick Insurance Questions to Ask Right Now

Regardless of who you use for insurance, you should ask questions about your policy. Do me a favor and ask your broker these questions this week:

  1. Is my policy set for replacement cost or market value?
  2. Does it cover updates required by building codes after a loss?
  3. How does my coverage change if units sit vacant?
  4. Did my deductible quietly increase without me noticing?
  5. Am I covered for flooding and sewer backups?
  6. Is renters’ personal data protected against cyber breaches?
  7. Are my liability limits high enough, considering today’s legal climate?

Just answering these questions could save you a ton of money and stress.

Final Thoughts: Why Playing Defense Wins

Trying to predict the market is tough, even for pros. Instead, focus on playing defense. Keeping your operations lean and your insurance robust will protect your investments and position you to thrive when markets pick up again.

Next Steps: Get a Quick Insurance Quote

If you haven’t reviewed your insurance lately, don’t wait. Take five minutes and get a competitive quote from Steadily today. It’s fast, easy, and could be the smartest financial move you make this quarter. Protect your money—because nobody else will.



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The Mortgage Rate Outlook For the Rest of the Year and 2026

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Mortgage rates have stayed stubbornly high in 2025, and while some people keep waiting for relief, I don’t think it’s coming as quickly—or as dramatically—as many hoped. We’re now well into the second half of the year, and it’s a good time to revisit what’s going on, why rates remain elevated, and what I think will happen next.

As of late July, the average 30-year mortgage rate is sitting at around 6.8%. That’s down from the 7.15% we saw in January, and technically at a three-month low. But let’s not kid ourselves: These are still high rates compared to pre-2022 levels, and they haven’t dropped enough to restore transaction volume or make cash flow pencil out for most investors.

I’ve said this before, and I’ll say it again: I expect mortgage rates to stay in the 6% range for most of 2025. Back in December, I predicted we’d finish the year somewhere in the mid-6s, and that’s still my base case. Sure, that’s not what many others were forecasting—they were more optimistic—but if you zoom out and look at the bigger macro picture, this trajectory makes sense.

Why Mortgage Rates Haven’t Fallen

One of the biggest misconceptions I see online is that the Federal Reserve controls mortgage rates directly. That’s not how it works. The Fed sets short-term interest rates, but mortgage rates are far more influenced by the bond market, which cares about inflation, recession risk, and government debt levels.

So far this year, we’ve seen mixed signals. On the positive side, corporate earnings have held up, the labor market remains relatively healthy, and inflation hasn’t surged. But on the downside, consumer sentiment remains shaky, debt delinquencies are creeping up, and there’s been a noticeable flight from U.S. assets, especially long-term Treasuries.

All this leads to a kind of economic tug-of-war. Some investors fear inflation; others are more worried about a recession. That uncertainty is keeping yields—and by extension, mortgage rates—stuck where they are.

The Second Half of 2025: What Could Change?

Looking ahead, I’m watching a few major macroeconomic forces that could shape the mortgage rate outlook.

First, there are tariffs. They’re a big deal, even if markets are under-reacting. These are effectively taxes paid by American businesses and consumers. There was a brief import rush to front-load goods before the tariffs hit earlier in the year, but the inflationary impact is likely to show up in the months ahead. This could spook bond markets and keep yields elevated.

Second is labor. The job market still looks good overall. Continued unemployment claims have ticked up, but initial claims remain low. That gives the Fed some room to maneuver, but it doesn’t necessarily compel them to slash rates.

And then there’s the wild card: the Federal Reserve’s leadership. Jerome Powell’s term ends in February 2026, and President Trump has made it clear he wants someone else at the helm. We’ve already seen open criticism and even discussions of firing Powell before his term ends. That kind of political pressure is unprecedented in modern U.S. history and raises serious questions about the Fed’s independence.

If a new Fed Chair is appointed—someone like Kevin Hassett or Christopher Waller, who lean dovish—we could see a more aggressive approach to rate cuts. But that doesn’t necessarily mean mortgage rates will fall.

The Fed Can Cut, But Will Mortgage Rates Follow?

Let’s say the new Fed Chair cuts the federal funds rate. That affects short-term interest rates, like credit cards and car loans. But for mortgage rates—which are tied more closely to the 10-year Treasury yield—there’s another story. 

If markets believe the Fed is cutting rates for political reasons or ignoring inflation risks, they may lose confidence. And when that happens, long-term rates can actually rise.

In other words, a rate cut could lower the cost of overnight borrowing, but push up the cost of 30-year loans if investors worry about inflation. We saw this disconnect in late 2024, when the Fed cut rates by 1%, and mortgage rates still went up. That’s a perfect example of how deeper macroeconomic forces can overpower Fed policy.

Forecasts and My Outlook

Most major forecasters agree: We’re not going back to 3% or 4% mortgage rates anytime soon. Fannie Mae projects rates to hover around 6.7% this year, dipping slightly to 6.5% by Q4. The Mortgage Bankers Association and National Association of Home Builders (NAHB) share similar views—mid-6s, maybe high-5s if we’re lucky.

I’m holding steady with my forecast: 6.4% to 6.9% through the rest of 2025. Even if the Fed cuts rates modestly, I don’t expect mortgage rates to respond dramatically. The bond market just isn’t set up for a major decline in yields right now.

Let’s talk about why.

Long-Term Debt Is Keeping Rates High

The U.S. government is drowning in debt. The national debt was reset to $36 trillion in early 2025, with almost $29 trillion of that publicly held. This massive debt load means the Treasury has to issue more bonds to finance spending, which increases supply and forces yields higher to attract buyers.

At the same time, interest payments on the debt are exploding. By the end of this year, we could see interest consume nearly 18% of federal revenues—more than double what we were spending just a few years ago.

This creates a vicious cycle: More debt means higher interest payments, which leads to more debt issuance, which raises rates further. Investors are now demanding higher term premiums—basically extra compensation—for holding long-term U.S. debt. And because mortgage rates are closely tied to long-term Treasuries, this keeps borrowing expensive.

Could QE Come Back?

One theoretical way to bring rates down would be to restart quantitative easing (QE), where the Fed buys bonds to push yields lower. But that comes with enormous risks. If investors perceive this as the Fed “printing money” to help the government or juice the economy before an election, we could see a complete loss of market confidence.

That would likely backfire. Instead of rates falling, they could spike as investors dump Treasuries or flee to inflation hedges. Credibility is everything for the Fed. Once it’s lost, it’s very hard to get back.

My Advice for Investors

If you’re buying real estate or refinancing in 2025, plan for mortgage rates in the 6% range. I don’t see a sharp drop coming. Yes, there’s always a chance for some upside surprise, and if rates fall more than expected, you can always refinance later.

But I wouldn’t bet your entire strategy on rates going down. Make deals work in today’s environment. Fixed-rate debt is still a good hedge against uncertainty, and real estate investors who stay active, flexible, and informed are going to be in the best position, no matter what happens next.

Hope for the best—but plan for the mid-6s to be the new normal.

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Buyer Cancellations Hit All-Time High

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Successfully navigating today’s housing market requires understanding the trends creating both opportunities and risks for investors. But what if varying data points in different directions?

While the national average home price hit a new record high, prices in more than one third of major U.S. housing markets are now declining, particularly in Florida and Texas where some areas face crash-level drops. Meanwhile, new construction starts are slowing as builder confidence erodes and contract cancellations have reached 15%, signaling a shift toward buyer leverage.

Host Dave Meyer breaks down what these mixed housing market signals mean for real estate investors on this episode of On The Market.

Dave:
Successfully investing in real estate in today’s day and age requires staying on top the most recent trends in the industry because deals are coming, opportunities are there, but it takes a savvy investor to take advantage of it. Today I’m sharing three new trends that you need to be aware of. Hey everyone. Welcome to On the Market. I’m Dave Meyer, head of Real Estate investing at BiggerPockets, and today we’re going to be covering three big emerging trends that personally I’m following. So I’ll fill you in on what is actually happening and I’ll also share with all of you what it means for investors and those of us who work in the industry. In today’s episode, we’re going to first discuss how prices are rising, kind of they’re also kind of falling and we’ll get into some of the nuances with home prices. Secondly, we’ll talk about new construction and how weaknesses in that entire segment is spreading and what it means for the average investor.
And third, we’ll talk about a big shift that’s going on with contracts, specifically cancellations for pending sales and how you can directly benefit from some of the changes that are going on here. Let’s get into it. First and foremost, we’re talking about prices and we are in this weird stage in the housing market where it is not so easy to say are prices going up or are they declining? When you look at things nationally, of course they’re going to be different from what they are regionally and even when you look from one data provider to another, some of them might say prices are going up and some of them are going down, but just in the last week, a lot of major media outlets were covering a headline that national median home prices for existing home sales in June rose to their highest level on record, which is $435,300.
That’s the highest on record going back to 1998. Not super unexpected because prices generally go up, but it represents a 2% increase in prices from a year earlier, which is a lot slower than it has been, and that’s something we’re going to talk about but is still relatively close to the pace of inflation and that is really meaningful. I know real estate is local, but even on a national level, the fact that home prices are still going up year over year, three and a half years into this interest rate tightening cycle into a year or so of increasing inventory, the fact that prices are still going up during that time I think is extremely notable and shows the resilience of the US housing market. So it does beg the question, how does this even happen, right? Because so many people have said there’s going to be declines or a crash because of interest rates or something else that’s going on in the economy.
But hopefully if you are a frequent listener of this show, you can already answer this for yourself. The answer comes down to inventory. Even though the number of new listings on the market, even though active inventory has been climbing for the last year or so, it’s just still too low. There is still more demand on a national level than there is inventory. We are still below pre pandemic inventory levels, and this is a fun trivia question for huge real estate data nerds out there, but most people think that demand has dropped off in the last year. That is actually not true. When you look at mortgage purchase applications, they’re actually up from a year before, and so even though inventory has been climbing, some of that is offset by increasing demand and the scales just haven’t balanced. There was so much more demand than supply.
Even though things are moving back towards normal, we still have a ways to go not that long because clearly at 2%, but there’s still a little bit of a ways to go before we reached a balanced market. Now, of course, everything that I have said so far is on a national level and that is up, but as I said at the beginning, home prices are up kind of because more and more markets are now starting to see declines. We’re just basically seeing the market split more and more into some that are performing and some that are declining. Just as an example, there’s some data that examines of the nation’s 300 largest housing markets. So these are big cities across the country. Of those 300, how many of them are seeing price corrections? And this trend is very, very telling about what might happen for prices for the rest of the year.
In January, at the beginning of the year, there was 31 of those 300 markets in correction, so about 10% of them. Then when you went to February, increased from 31 to 42. By March it was already up to 60. By April it jumped again to 80 of those markets. In May it was 96, and as of June, that is the last month we have data for, I’m recording this towards the end of July, but this data usually lags a month. So as of June twenty, twenty five, one hundred and ten, so more than one third of all of the major housing markets in the United States are seeing a decline. Now, the scale of these declines really does matter. We should dig into that because some of them are seeing what I would call borderline crash situations where others are down half a percent. So there’s a really big scale on the sort of scary, full-blown crash.
End of the spectrum are mostly markets in Florida, probably not surprising to anyone who follows this stuff, but Punta Goda has the biggest year over year declines dropping 12% in just one year. That is a huge decline. That is a crash in my opinion. We also have other markets in Florida that are bordering on that territory, Cape Coral, Fort Myers, that it’s down almost 10%. We have Northport, Sarasota and Brader. 10 is at eight and a 5% Naples is at 7%. Then we to round out the top five or bottom five, I guess you would say Austin, Texas is still at negative 6%. That’s after years of declining. Then we see Tampa, we see Vero Beach, then it drops to Hawaii. So these are serious declines, right? If you see a single year decline of six, seven, 8%, that is worrisome and from all accounts, especially in Florida, these are going to get worse.
Now, other markets, if you look at Salem, Oregon, yeah, it’s counted in that 110 markets that are declining, but it’s literally 0.01% decline. So it’s basically flat. A lot of the areas that are seeing declines outside of the Sunbelt or the Gulf Coach regions are pretty mild. So you look at Nashville, for example, big market in a decline. The decline though 0.015%, I’m not really worried about that. To me, that is flat. Same with Birmingham, Alabama in Seattle here where I live, it’s 0.4% down. So these things aren’t super concerning to me, but the fact that more and more markets keep getting added to this list, we went from one 10th of all markets to now one third of all markets just says to me a couple of things. First and foremost, you have to be careful in almost every market right now, even the ones that are appreciating still, I would expect in almost every one of those markets the appreciation rate to start to go down.
So if it grew 6% last year, it probably will still grow in the next year, but do not assume the same rates of appreciation that we’ve seen for the last couple of years. I would personally haircut most of these things and I would think about maybe underwriting even a strong market to a lower appreciation rate, like two to maybe 3%. I would personally not advocate underwriting any market for above average long-term appreciation. The long-term appreciation rate in the US is about 3.4%. That’s kind of the highest I would go even and only for a super strong market. The markets I operate in, I want ones that are going to appreciate, but I might assume one to 2% appreciation even in markets that are growing today. So that’s the number one thing. The second thing, and this is just more psychological than it is tactical, but I do think there’s an increasing chance.
I’ve been saying this for, I don’t know, 3, 4, 5 months now that there is going to be a correction in home prices on a national level. And the reason I say this is psychological is because it doesn’t really change what’s going on in your individual market. That obviously depends on local dynamics, but it will impact what you read about on the news. It will probably impact what your friends or your family members say to you about buying real estate. And I think we should all just sort of be prepared for that because home prices are declining in a lot of markets and as investors we have to recognize that that is opportunity and risk. But I think a lot of people who are just more casual observers of the housing market are just going to only see the risk part of that. And for you as an investor, if you want to be active in the market, you have to sort of see through some of that noise that we’re going to hear in the media. That’s why we have a show on the markets to sort of cut through that noise and talk about it. But I do think it’s something to be prepared for. We do need to take a quick break, but when we get back, we’re going to talk about construction. I know not everyone listening is into new construction, but this too has big impacts on regular investors will be right back.
Welcome back to On the Market. I’m Dave Meyer here talking about three important trends you all need to be paying attention to. Our first story today was about prices, but now we’re going to move on to new construction because I should note this, but all of the prices that I was talking about earlier are for what’s known as existing homes. These are homes that have been bought and sold before, not new construction. In our second trend here that we’re going to be looking at, we’re going to be looking at the flip side of the equation and see what’s going on there because some people might be interested in buying new construction, but even if you’re not, some of the stuff going on here can spill into the existing home market, which we’re going to talk about as well. So the big headline is that new construction is pretty weak.
When we look at the data that we got from June, building permits declined four and a half percent year over year, which might not sound like a lot, but it is actually a pretty significant decline. Permits are basically a lead indicator how many people are applying to build new homes. We have this other metric called completions, which is basically how many homes actually get finished and put up for sale on the market completions were actually down 24% year over year on an annualized basis, which is a massive decline from where we were in June, 2024. Now what’s interesting here is that some of the data for new construction is aggregated between multifamily and single family housing. If you listen the show, you know that multifamily housing, new construction has been really low. There’s been an oversupply in that market. The pendulum has swung back in the other direction and there’s been relatively low construction there for a couple of years now.
But what’s notable, and the reason I’m bringing this up today is that we are seeing new declines in single family housing permits just for single families went down 4% and starts went down 5% and completions were down 12.5% just for the single family segment. And that’s really notable because a lot of the headlines you see about construction over the last couple of years have really been because multifamily is down so much that takes the total unit countdown and it’s just a different industry, but this weakness is now spreading to single family homes. I was reading an article on realtor.com and their chief economist, Danielle Hale, she wrote that quote, these Lowe’s in single family construction come as nearly two in five builders. So 40% of builders reported making price cuts in June underscoring the price sensitivity of today’s home shopper. So this quote is really illuminating because it tells us why, and it always comes down to this, why are we losing construction?
Well, builders don’t have a lot of confidence that they’re going to be able to sell their finished products, whether six, nine a year, two years down the line from now at the prices that they need to get to earn the profit they want or to take on the risk of doing a new construction project, which is really relatively risky. And so in a way, what we’re seeing with permitting and all this is really not that surprising because we’ve seen a drop in builder sentiment for the last couple months and this is a really important lead indicator for what’s going on. And they have this by region too, which is going to be a trick all of you investors can take out and use because you are going to want to understand where construction is actually happening if it’s happening in your area, the markets that you’re operating in, and I’ll share with you some of that in just a little bit.
But we’re seeing at the highest level first is that builder sentiment overall has dropped down to a level of 33. Now, that number probably makes no sense to you at all right now, but I’ll explain it to you. It’s what’s known as an index and basically anything 50, the level 50 is basically neutral, right? It’s kind of like a five out of 10. And so if builder confidence or builder sentiment is 50, it means about half of the builders are feeling good, half are not feeling good right now, at a level of 33, that means about two out of every through builders are not feeling pretty good about the market and only one out of three is feeling good, and it is notable, slightly notable that the number jumped up a little bit from June to July. It went from 32 to 33, but this is way lower than where we started the beginning of the year.
In January we’re at 47, so close to neutral, which is pretty good given where interest rates are right? But we’ve seen that drop all the way down to 33%. So we’ve seen a very pronounced souring of sentiment in the builder industry. And again, this is happening now in a more pronounced way on the single family level. Just as an example, at the beginning of the year we saw the builder sentiment level for single families alone at 59, that’s dropped down to 43%. So basically we went from 60% confidence to 43% confidence in just a couple of months. That is a pretty dramatic, I’ve watched these indexes, they don’t move that much that quickly. And so seeing it drop down that much is a significant finding and that’s why we’re talking about it. Now, if we want to, we can dig a little bit deeper and say why is builder sentiment deteriorating?
We can sort of follow the thread here. Construction is down. Why builder sentiment’s down? Why is builder sentiment down? Well, we have some data on that too. The main reason is that perspective buyer traffic is declining. We’ve talked about this, but actually overall mortgage purchase applications are doing okay, but it seems like in a new construction segment we’re seeing a pullback in demand. There is another index, same way it’s measured, as I said before, 50 is neutral. So traffic for prospective buyers when we started the year was at a 32, so already not great, but 32, it’s okay. Now it’s dropped down to 2020 is not a good number. That means only one out of five builders on average is feeling like they’re getting good traffic from prospective buyers. No wonder they’re stopping building, right? If you stop seeing people showing up to buy the homes that you already have that are going to sit in your inventory, would you keep building?
I don’t think so. So that’s number one thing that’s happening. The second thing is just softer pricing. If there’s less people coming in the door, you’re going to have to lower your prices. And for builders, price cuts are really used as a last resort incentive. They do not want to lower their home prices because it resets their comps. Just imagine if you were building 20 or 30 homes in the same subdivision and you lowered the price for one. Well, you sure bet that every other buyer who comes in the market’s going to want that lower price. So they’re willing to do everything including rate buy downs and seller credits and all these other things to avoid dropping prices. But even still, they’re having to drop prices. Like I said earlier, 40% of home builders are now reporting that they are cutting prices and they’re basically turning to their incentive of last resort.
And so this is just again, why we’re probably going to see single family home construction decline for the foreseeable future. Now of course there are regional trends that we should be talking about. When you look at builder confidence in general, it’s actually still pretty good in the northeast and the Midwest. So in the Midwest, for example, you all know I am a shill for the Midwest, but builder confidence was 44 in January and it is now 44 in the Midwest. It’s slow and steady in the Midwest, always the same, which I’m totally fine with. So that hasn’t changed in the Northeast, it started super high, it’s 65, it’s now down to 48. It’s still the highest of any region, but it’s come down pretty considerably. Whereas when we look at the south, it started at 47, not bad, but that’s dropped all the way down to 29%.
And when look at the west, that started at 42% and dropped down to 25. And so this is really helpful in understanding and forecasting what’s going on here because we are seeing this oversupply in the south. That’s a big reason why prices are declining, right? If you look at Florida or Texas or some of these markets, they’ve built a lot. So seeing builders peel back in these markets is not only logical, it’s kind of to be expected. This is a normal housing cycle. When they build a little too much, they get a little too aggressive, maybe a little too confident, then the buyers pull back and they say, oh, whoa, whoa, we’ve built way too much time for us to pull back on construction. And we’re seeing that. So it is not surprising or a further sign of decline in the south that there’s less building there.
That’s actually a sign that they’re trying to find a bottom right that there’s more likely to find a bottom in those markets because we won’t be flooding those markets with new construction. So if you work and live in those markets and you’re concerned about prices declining, you actually probably want to see a slowdown in new home construction in those markets. So that’s a really good indicator for everyone to watch. Meanwhile, I think when you look at places like the Midwest and the Northeast, you can expect a continuation of what we’ve been seeing. Now, those markets have not traditionally been overbuilt, they don’t build as much, and so we’ll probably still see more inventory coming online, but it’s not like all of a sudden builders are flocking to the northeast and Midwest to start building in mass huge tract homes and subdivisions like they do in Florida.
Instead, I find this comforting as an investor in the Midwest is that I think that it’s probably going to just keep going slow and steady the way that it has been historically. Now you’re going to want to look at individual markets because obviously the Midwest or the South, those are big regions, but generally speaking, that’s what’s going on. So again, this is why I think new construction is something everyone needs to be keeping an eye on. Over the last couple of years we’ve been suggesting to you on this show to look at multifamily permits to see where it’s getting oversupplied. But given these trends, I think looking at single family permits, this is stuff you can find for free. You can go on the Fred website and just Google new building permits, Dallas, Texas, and you’ll get this for free. And just look at what’s going on in your market.
It can help you inform, sort of informs your buying strategy. Our prices going to keep declining our new construction, or maybe they’re becoming really good value in your market in Dallas. That’s actually true in a lot of cases. So it just helps you identify the type of asset you could be looking for and where prices are likely to go. So definitely check that out. Alright, that was our second trend that you need to keep an eye on. Next, we’re going to talk about how we have reached a all time high for contract cancellations in June, and this too has huge implications on how you adjust your own investing strategy. I’m going to share with you my thoughts right after this break. We’ll be right back.
Hey everyone, welcome back to On the Market. I’m Dave Meyer, sharing with you three housing trends you should be keeping an eye on. So far, we talked about prices, we’ve talked about new construction, but next I want to turn our attention to the fact that we now have a new record high for pending home sales cancellations. So basically what happens is a property goes on market eventually a buyer and a seller agree on basic terms and that is going under contract. But from that point, it still takes 30 or 60 days to actually close. And during that closing period, legally or technically what it is called is pending, that home has gone pending. And so what I’m talking about here is the number of contracts that are pending but ultimately failed to transact and to close has gone up. As of June, 2025, according to Redfin, 15, one 5% of all pending contracts are now getting canceled.
And that is actually a lot. It’s the highest that we’ve seen in the time that Redfin has been tracking this data, at least for the last eight years. And that’s not a huge long dataset, but it does show us what happened pre pandemic. It showed us what happened during the pandemic and since the pandemic, and we can see that this is the highest rate. So just for some frame of reference, like in 2017 back when things were normal, that till 2019, the average pending sales was 11 to 12% of those fell through. So it’s still actually a decent amount more than 10%. Then during the pandemic, it got even lower. In June, 2020, it went to 10.9. In 2021 when there was just the massive frenzy, it dropped down to 10%. But since then it’s bumped back up in 20 22, 23, 24, it’s closer to 14%. Now we’re closer to 15%.
So I don’t want anyone to freak out. It’s not like we’re in totally uncharted territory from where we’ve been the last couple of years. But the fact that it is going up I think is notable for two reasons. One, it just tells us that there might be further price declines in the us. That’s one of the reasons why I keep saying that there might be a national housing correction in the next year, but it also points us as investors to some things that we can do in our own bidding strategy and in our own investing strategy that may be beneficial to us. So we’re going to get into that. But I first just want to mention why this happens in case it’s not obvious. Why do more contracts get canceled? Well, it means that buyers have leverage. And if you’ve ever bought a house, you know that during that closing period, normally you have these different milestones where you can decide if you want to get out of the contract.
Now, that’s an oversimplification of what’s going on here, but just as an example, a lot of contracts will have an inspection contingency, which means that in the first, let’s call it 10 days of the buyer can get an inspection if they choose and they can terminate the contract if they don’t like what’s in the inspection, or perhaps they negotiate with the seller. Seller doesn’t want to give any money back on the contract because of the inspection, and so they break off the contract. That is not all that unusual for that to happen. There are other contingencies there. Some have insurance contingencies. Many of them have financing or appraisal contingencies. These things exist. But during the pandemic, because things were so competitive, buyers were often waiving their right to these contingencies in the first place. So you may have heard of this, but people were saying, I’m not even going to get an inspection because I want this property so bad, or I’m not going to wait or have an option of an appraisal contingency.
I’ll just bring cash to the table in case my property doesn’t appraise for what I needed to appraise for. And that’s pretty wild. That is not a normal thing to happen. That is pretty unique to the pandemic timeline. But that was happening. But obviously now we are moving back into more of a buyer’s market, and basically what’s happening is buyers are using that leverage that they have. They are insisting when they write offers to have these contingencies back. And then secondly, they’re more willing to actually exercise those contingencies because for years, maybe you had an inspection objection contingency in there, but if it came back at just two or $3,000 of work that needed to be done, you didn’t want to go out there and start facing another 30 home buyers bidding against each other in the next property you went for. So you’d just eat it and you would take the $3,000 and just wave your contingency.
That’s not really happening anymore. I don’t think buyers are nearly as afraid of walking away from the deal. And the situation has shifted where sellers are now increasingly afraid of buyers walking away. There are more sellers than buyers in a lot of markets, and they need to compete for those buyers. And so now we’re in a situation where buyers are much more willing to cancel, where sellers are the ones who really want to hold onto the contracts that they have. Now, this is a super key insight for investors than I’m going to talk about in just a minute. But I also just want to mention that these cancellation rates, just like everything that we’ve been talking about today, do have regional variances. We’re seeing in places, again in Florida, in the Sunbelt, be the biggest places where there are cancellations. So in Jacksonville, Florida, for example, more than one in five contracts were canceled 21%.
That’s the highest in the us. Vegas is 20%, Atlanta is 20%. So we’re seeing really big high levels. We’re also other places in the Sunbelt, San Antonio, Orlando, Phoenix, Miami, all in the top 10 there. On the other end of the spectrum, it’s these places that we talk about as being strong markets like NASA County, New York, Milwaukee, Montgomery, Pennsylvania. Those are all pretty low still. So take what I’m about to say with a grain of salt depending on what region you live in. But to me, the fact that contract cancellations go up is a critical shift for investors and how they handle their own portfolio because now you have the leverage. We talk about this in a buyer’s market, but this is a perfect example of how you actually have leverage. And so here are just a couple of things I would think about if I were going out and offering on properties, if I were you first.
Think about how you want to use your leverage to negotiate. You could go out there and low ball a lot of offers. That’s definitely possible. You could go out there and demand tons of concessions. That’s also possible. But typically, at least in my experience, if you go out there and are really aggressive on every single thing, the seller is not going to really trust you and it’s going to be difficult to actually pull off a deal. Instead of doing that, I recommend really thinking about what a seller wants in this type of market. And what I see increasingly is that what they want is deals to go through. They’re very nervous about these contracts that they’ve probably worked hard to get, not actually executing and transacting, and then they would have to go out and put their property back on the market, which could sit for a while again.
And so what this means is that sometimes if they’re really nervous about that, they might be willing to be flexible on price. I’ve listed a house for sale and I think this is a good house that’s going to sell, but would I take three grand less? Would I take five grand less? Would I take eight grand less if I knew that this property was going to sell? Probably if they came to me and said, I have a cash offer, or I am going to put down a significant earnest deposit, or I’m going to waive my appraisal contingency. I’m going to do a past fail inspection, and I’m not going to nickel and dime you on all the inspections. All of those things would be valuable to me as a seller, and they could be valuable to you in terms of dollars as a buyer. So just think about the bid strategy that you want to create for yourself.
If getting the asset at the lowest possible dollar is valuable to you, which I think for most investors, that’s probably what you want the most. Think about how you can put things into your offer to get the seller to trust you and be willing to sell it to you at that lower price. And again, I think that’s really in terms of these things that really signal your intent to close. So again, these are things like short close periods, waiving finance contingencies, waiving inspection objections, or just coming up. You don’t have to waive it completely, but coming up with really reasonable things that signal to the seller that you are going to close on this deal if you give them that price because the last thing that they want is like, Hey, I’m going to give a discount to this investor. They might back out anyway.
That’s the worst case scenario for the seller, right? So think about what’s valuable to you and working to a mutually beneficial outcome with the person you’re hoping will sell you their home. So that’s it. That’s my advice. Particularly if you’re in one of these markets where there are a lot of cancellations, I would consider adjusting your bid strategy accordingly. Of course, if you’re in a tight market, you’re still going to have to be pretty aggressive. You’re not going to have the same opportunity to negotiate, but you can still think about doing some of these things because with some motivated sellers, it definitely can work. Alright, everyone, well, thank you all for being here and listening to this episode of On the Market. I hope you appreciate and learn something from these key trends that I’m following on the housing market. Again, it’s prices and regional changes in prices, the decline in new construction, and the uptick in contract cancellations. All super important things that you should be incorporating into your own investing strategy. That’s it. That’s what we got for you today. Thank you again for listening. We’ll see you next time on the market.

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The Best Short-Term Rental Market in Every State

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A “best” short-term rental market to you may be another investor’s worst nightmare. So, what is the “best”? 

Well, it’s relative, and we decided to put together our favorite markets in each state based on the numbers. We scoured the internet, pulled data from PriceLabs, and probably lost a few hours reading Reddit horror stories: all to bring you a list of two solid vacation rental markets in every single U.S. state. 

These cities were determined by a myriad of factors, including average daily rate (ADR), occupancy rates (OR), regulations, tourism numbers, and other relevant considerations. I wanted to use a metric based on whether each city had a Texas Roadhouse, but Pricelabs did not have this data (I will need to send a request to them to add it).

Now, before you go impulse-buying a cabin in a town you’ve never heard of, there are a few things you should know. Every city has its own set of short-term rental rules, and, yes, some are stricter than others. But regulations aren’t always a bad thing. Regulated markets often have more explicit rules, fewer legal surprises, and a more sustainable path forward because someone’s already fought that battle and lived to tell the tale. 

Just make sure you’re investing in the right part of the city. Being in a “good market” doesn’t help much if you accidentally buy in the part of town where STRs are banned, or neighbors are one noise complaint away from a lawsuit.

Also, don’t forget: A good market won’t save a bad host. You could have the highest average daily rate and the best occupancy stats in the country, but if your place smells weird, has blurry photos, or guests are unlocking the wrong door at midnight, it’s going to flop. This business combines real estate investing and hospitality. You’ve got to treat it like both.

And if you’re planning to hire a co-host from the start, that’s fine, but I still recommend managing your first property yourself, even if it’s just for a few months. You’ll learn what works, what breaks, and what systems you need before handing over the keys to someone else.

Two STR Markets in Each State You Should Consider

All right, disclaimers out of the way: Here are two vacation rental markets in every state that are worth a closer look.

State Top Market No. 1 Top Market No. 2
Alabama Gulf Shores Montgomery
Alaska Fairbanks Anchorage
Arizona Sedona Flagstaff
Arkansas Little Rock  Fayetteville
California Joshua Tree  San Diego
Colorado Durango Steamboat Springs
Connecticut Hartford New Haven
Delaware Rehoboth Beach Lewes
Florida 30A (South Walton) Tampa
Georgia Augusta  Savannah 
Hawaii Maui  Honolulu
Idaho Idaho Falls  Boise
Illinois Peoria Galena
Indiana Fort Wayne Indianapolis
Iowa Des Moines Dubuque
Kansas Overland Park  Wichita
Kentucky Red River Gorge Louisville
Louisiana Lafayette  New Orleans
Maine Augusta Eastbrook
Maryland Ocean City  Annapolis
Massachusetts Easthampton Worcester
Michigan Grand Rapids Ann Arbor
Minnesota Tofte  Duluth
Mississippi Oxford Jackson
Missouri Lake of the Ozarks  Branson
Montana Bozeman Whitefish
Nebraska Omaha Lincoln
Nevada Las Vegas Reno
New Hampshire Berlin Rochester
New Jersey Cape May Absecon
New Mexico Santa Fe Las Cruces
New York Pocono Mountains Niagara Falls
North Carolina Myrtle Beach Asheville
North Dakota Fargo Lake Sakakawea
Ohio Logan Columbus
Oklahoma Broken Bow Tulsa
Oregon Rockaway Beach Cannon Beach
Pennsylvania State College  Pittsburgh
Rhode Island Newport Block Island
South Carolina Myrtle Beach Charleston
South Dakota Sioux Falls Rapid City
Tennessee Gatlinburg  Nashville 
Texas Waco Fredericksburg
Utah St. George  Moab
Vermont Stowe Burlington
Virginia Virginia Beach  Richmond
Washington Gold Bar Forks
West Virginia Snowshoe Fayetteville
Wisconsin Green Bay  Door County
Wyoming Jackson Hole Cody

Final Thoughts

That’s 100 solid markets across all 50 states. From big names like Nashville and Joshua Tree to underrated gems like Tofte in Minnesota and Lake Sakakawea in North Dakota, this list proves that great short-term rental opportunities aren’t just hiding in plain sight—they’re everywhere. 

But remember: Buying in the best market doesn’t guarantee success. It’s what you do after the purchase that matters. Cleaning, communication, design, and guest experience are what separate five-star stays from forgettable ones.

Use this list as a launchpad, not a shortcut. Learn the local rules, walk the neighborhoods, test your systems, and treat every guest like it’s opening night. 

In this business, your property isn’t just an investment. It’s your reputation.

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Dallas is Booming—But is it a No-Brainer Investment?

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On a list of any prospective landlord’s or flipper’s must-haves when looking for an area in which to invest is high demand and continued, predictable growth. Those features make Dallas, Texas, a gold mine.

North Dallas: A Force of Nature

Dallas’s expansion has been so dramatic that it is now spilling into neighboring states, and it doesn’t appear to be slowing down anytime soon, according to The Wall Street Journal. 

North Dallas, in particular, has been like a force of nature, pulling in residents and companies from other states and countries and assimilating them into the new Texas economy.

To keep pace with the growth, new housing developments are sprouting like toadstools after rainstorms. According to an analysis by commercial real estate services company CBRE, Dallas ranked first for corporate relocations from 2018 to 2024, attracting notable companies such as Toyota, Amazon, and Charles Schwab, among others. 

Tech Is Fueling a Housing Surge

Fueling the surge is the tech industry, with Texas Instruments recently announcing it would invest as much as $40 billion to construct a massive semiconductor campus, just 12 miles from the Oklahoma state line, marking North Dallas’ relentless expansion north.

The Journal pinpoints Frisco as the center of the North Dallas growth spurt. In 1990, the population was approximately 6,000. Today, that number is over 240,000 and on its way to 350,000 in the next five years, according to city planners. And there are other Friscos in the area, such as Prosper and Celina, with rapidly expanding infrastructure (schools, roads, and stores) to accommodate the growth. 

All this means that the North Dallas corridor is one of the safest places to invest your money. “The talent pool in North Texas is incredible,” Raymond Bellucci, chief operating officer at TIAA Retirement Solutions, told the Journal. “It’s a destination for young people now.” 

Bellucci’s firm moved into a new 15-story office tower in Frisco in August. It sits in an alternative energy-fueled building in a $1.5 billion, 91-acre development, The Star, built by Dallas Cowboys owner Jerry Jones, whose club also has its headquarters there.

Available Land Encourages Urban Sprawl

Dallas’ growth has been made possible by an abundance of land to accommodate its urban sprawl. However, despite Texas’s relative affordability compared to other parts of the country, if you plan to buy and hold in North Dallas, you will have to purchase with cash or a sizable down payment and reap the equity rewards down the line.

The average apartment rent in Dallas is around $1,700/month, according to RentCafe, and home prices tend to start around $450,000. The median price of a sold home, according to Realtor.com, is currently $605,000, so cash flow is not a viable option.

North Dallas: A Safe Place to Buy

If you are liquidating another rental and considering a 1031 exchange or selling another asset, North Dallas is one of the safest places to stash your cash. At the end of 2024, international accounting firm PricewaterhouseCoopers and global nonprofit real estate research and education organization the Urban Land Institute released a report attesting to the Dallas-Fort Worth (DFW) area being the U.S.’s top spot for real estate investment and development for 2025, due to its surging population and rock-solid economy.

Home prices in the Dallas area have experienced dramatic growth over the last five years. While median single-family homes in the city of Dallas have appreciated by more than 80%—$295,000 in January 2020 to $539,000 in June 2025, according to the Houston Association of Realtors, the PwC and ULI report puts overall price growth in the DFW metro area at around half that number, which is still explosive.

“Dallas continues to attract new businesses and residents who are capitalizing on our attractive economic climate; availability of new, highly skilled talent; and first-class developments,” Tamela Thornton, executive director of ULI Dallas-Fort Worth, told the Dallas Morning News in a statement. 

Appreciation Over Cash Flow

Given that cash flow is challenging in the Dallas area, due to demand and appreciation, flipping houses remains a viable option in the city, according to a study by ViewHomes, highlighted in Newsweek.

However, as with any market, choosing where to flip requires granular-level research to identify burgeoning, in-demand neighborhoods. Certainly, if you’re looking for less-expensive distressed houses where you can buy low and also sell fairly low, North Dallas isn’t the place to find them. Rehabbers will need fairly deep pockets to get in the game. 

The airport and adjoining Tollway area are the gateway to flipping freedom. “That Tollway is like liquid gold,” Candace Evans, author of a popular real-estate website Candy’s Dirt, told the Journal. 

Frisco: A Well-Planned Success Story

The town of Frisco is emblematic of a well-planned expansion, investing tax dollars in schools and infrastructure, thereby bypassing the city’s public transportation system, which makes it attractive to higher earners. 

“We wanted to be intentional about creating a sense of place and making different areas unique,” Mayor Cheney told the Journal. Thus, North Dallas became a hub for employees of companies relocating to areas such as Frisco and nearby Plano, McKinney, Allen, and Coppell, adopting the same master-planned approach to development.

“There’s still a lot of growth north of the Celina area, pretty much to the border of Oklahoma, that’s still out there to be had,” Chad Sterling, chief executive of Altair Global, told the Journal.

Entertainment and Businesses Are Flocking

Frisco has recently attracted the Professional Golf Association (PGA) from Palm Beach, Florida, to build a 600-acre golf complex. Additionally, a new luxury 2,500-acre residential golf development, Fields, features retail and office space. And a Universal theme park is set to open in summer 2026.

Clearly, homebuyers will be affluent and probably spoiled for choice with new master-planned developments, which rules flippers out. Tech and medicine are big sources of employment. 

And one demographic to watch: 44% of new students in Frisco are Asian, according to school data. “There’s one thing that’s unique about South Asian families,” Nitin Gupta, a local real-estate agent, told the Journal. “They want a brand-new home.”

Ways for Real Estate Investors to Make Money in North Dallas

There are several ways investors can capitalize on the predictable growth in North Dallas.

Preconstruction

With new homes in Frisco costing just under $1 million and house prices seemingly escalating upward, regardless of interest rates, there is an opportunity for highly liquid investors to make money. Buying preconstruction lots and selling them when finished in an escalating market is a risky proposition that can bring short-term profits, if done right.

Flip a townhome

Townhomes are often low-hanging fruit because couples tend to buy them and live there for a few years before starting a family and selling. A cosmetic rehab offers the chance for quick cash.

Buy-and-hold townhomes

Townhomes are good buy-and-holds for the same reason they make good flips: Couples often don’t plan to stay long, so rather than spending their money on down payments, closing costs, and maintenance on a new home, they prefer to rent while saving for their dream home.

Multifamily residences

Despite real estate agent hype, not everyone wants to live in a sparkling new home and pay top dollar for the privilege, especially if it means negotiating a commute. A Zillow search yields 63 multifamily units for sale in the Dallas area, with prices ranging from $485,000 for a five-unit residence built in 1942 to $6.5 million for a new construction 12-unit building.

Final Thoughts 

In the current housing market, North Dallas and Dallas are generally an anomaly—house prices appear unaffected by high interest rates, despite time on market increasing. In fact, according to Redfin, house prices have increased steadily this year, with the median sale price up 13% year over year as of June.

Rents are also increasing. Ashley Flores, chief of housing at the Child Poverty Action Lab, told the Dallas Observer:  

“Even though renter household earnings have increased in the last decade, home prices have increased faster. So, renter households are not making the transition to homeownership at the same rates they have in the past. And so higher-income households are staying renters longer, which puts additional downward pressure on the rental market.”

All this means that Dallas is a city where both landlords and flippers still have options.

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How Single-Family Rental Data Can Help You Maximize ROI as a Real Estate Investor

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In today’s real estate environment, data isn’t optional—it’s essential. Whether you’re a first-time landlord or a seasoned investor looking to scale your portfolio, understanding where and when to invest is just as important as what you invest in. Tracking single-family rental (SFR) data for three-bedroom homes can provide insight into a segment that continues to attract stable, long-term tenants like families, professionals, and relocators.

To help investors identify markets with the most potential, annual SFR reports deliver critical insights across the county, state, and national levels. These reports combine rental pricing, wage data, rent-to-income ratios, gross rental yields, and home price trends—giving you a clear, comparative view of where opportunities may lie.

Let’s dive into the key data points found in these reports and how they can inform your investment decisions.

Three-Bedroom Rental Amounts and YoY Percentage Changes

One of the most telling indicators of a healthy rental market is how much tenants are paying—and how that’s changing year over year. Equity’s SFR reports provide median monthly rents for three-bedroom homes, along with year-over-year (YoY) percentage changes for each geography.

Why three-bedroom homes? They are the sweet spot for many tenants—large enough for families or roommates, yet still manageable and affordable. If you see a county where three-bedroom rents are rising 5% to 8% YoY, that can signal strong demand and potential pricing power for an investor.

You can also use this data as a benchmark for pricing other units. For example, in many markets, a two-bedroom home rents for 70%–85% of the three-bedroom rate. So, if the median three-bedroom rent in your target county is $2,000, you might reasonably expect a two-bedroom to command $1,400–$1,700, depending on local supply and tenant demographics. This insight allows you to forecast cash flow and compare rental growth across multiple markets—an invaluable edge when evaluating your next investment opportunity.

Wage Data and Rent-to-Income Ratios

Beyond rents, Equity’s reports also provide average weekly wage data from the Bureau of Labor Statistics, converted into monthly income estimates. This is critical because rent alone doesn’t tell the full story—affordability does.

With wage data in hand, the reports calculate rent-to-income ratios—the percentage of a typical tenant’s income that would go toward rent. As a rule of thumb, a 30% rent-to-income ratio is considered affordable. Higher ratios may suggest tenant stress and higher turnover risk; lower ratios signal a sustainable rental market.

For example:

  • County A: Median rent = $1,800 / Monthly income = $6,000 —> Rent-to-income ratio = 30%
  • County B: Median rent = $1,800 / Monthly income = $4,500 —> Rent-to-income ratio = 40%

In this case, County A is more likely to offer long-term stability and reliable cash flow. 

The reports also track YoY changes in affordability, helping you monitor whether markets are improving or deteriorating. This can help you identify areas where rents are outpacing income growth, which may increase your vacancy risk.

Gross Rental Yield

No metric matters more for ROI-seeking investors than gross rental yield. This figure, included in Equity’s SFR reports, is calculated as:

Gross Rental Yield = (Annual Rent ÷ Purchase Price) × 100

So, a $200,000 home generating $20,000 in annual rent would have a 10% gross rental yield.

Yield helps you quickly compare markets at a glance. Markets like Cuyahoga County, Ohio, or Wayne County, Michigan, often offer yields over 10%, reflecting strong cash flow opportunities. By contrast, high-cost coastal markets like Los Angeles or Miami may have yields closer to 4% to 5%, where appreciation might be the play rather than immediate income.

While gross yield doesn’t account for expenses, it’s a powerful starting point for market comparison and portfolio strategy.

Home Prices, YoY Percentage Changes, and Comparative Trends

Home prices are another critical input in your investment analysis. The SFR reports provide median home prices alongside YoY appreciation data, letting you see how quickly values are rising.

Even more valuable, the reports compare:

  • Home prices vs. wages: If home prices are rising faster than wages, homeownership becomes less attainable, increasing rental demand.
  • Rents vs. home prices: When rents grow faster than home prices, rental yields improve—good news for investors.
  • Rents vs. wages: If rents rise faster than wages, affordability suffers, which could eventually dampen demand or increase turnover.

For example, if a county saw:

  • Home prices +8% YoY
  • Rents +10% YoY
  • Wages +4% YoY

This suggests a market where rental ROI is improving, but affordability may be tightening. As an investor, that could be a short-term opportunity—but also a flag to monitor affordability before investing heavily.

How Investors Can Use SFR Data Strategically

The power of Equity’s SFR reports lies in how the data layers together. By combining rental growth, wage trends, rental yields, and price dynamics, you can:

  • Pinpoint high-yield markets that offer immediate cash flow (e.g., counties with 10%+ yields)
  • Avoid tenant turnover risk by targeting balanced rent-to-income ratios (25% to 30%)
  • Watch YoY trends to spot rising-star markets before they hit the radar of larger investors
  • Optimize your portfolio by allocating capital to markets where rents are rising faster than home prices, indicating more attractive returns

Rather than chasing headlines, this data-centric approach allows you to make strategic, risk-aware investment decisions based on real numbers—not emotion.

Ready to Invest Smarter? Use Equity’s SFR Reports

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3% Interest Rates in 2025? This “Hack” Unlocks It

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Want a 3% interest rate? What about a lower purchase price? Maybe hundreds of thousands of dollars in tax-free income? These real estate “hacks” unlock all of these benefits—and they work especially well in 2025. We’re entering a new type of housing market: sellers have lost much of their control, inventory is high, affordable areas are seeing stronger demand, and real estate investors need to pivot ASAP.

So, how do you take advantage of today’s real estate market? Dave has five hacks he’s currently using to find real estate deals at better prices (and substantially lower interest rates) in 2025. You can use them to land better buys, too.

Our hacks include how to “steal” a 3% mortgage rate even in 2025, the “rental property” that isn’t really a rental (but has way better upsides), how to perform renovations with less stress and more flexibility, a location hack that will get you a lower price while still having big-city demand and more!

Dave:
2025 is a brand new landscape for real estate investors. Whether you’re growing your portfolio or investing for the first time, you sort of need to understand the tactics that work today, not the tactics that work yesterday, not the ones that are going to work in 2026, the ones that work right now. So today I’m sharing my top five real estate hacks of 2025 that you need to move forward on your path to financial independence. Do you want a 3% mortgage? I bet you do. So watch and find out how to get more. Hey everyone, it’s Dave head of Real Estate investing at BiggerPockets and an investor for 15 years now. And honestly, a lot has changed in those 15 years and also in some other ways nothing has changed. For me, the big picture stuff is really all the same. I still take a long-term approach to real estate investing.

Dave:
I am always looking for the highest risk adjusted returns no matter what year it’s I look to buy great assets at good values. In other words, in good prices. I want to continue to earn active income as efficiently as possible, so that gives me more money to invest. None of that stuff really changes. That’s my big picture strategy. But the tactics, the stuff that you’re actually doing each and every day, that stuff actually has changed the type of assets I look for, the types of financing, actually even the markets that I invest in, those have and will continue to evolve. So in today’s episode, I’m going to be talking about five tactical things that almost anyone can use to get ahead in 2025. Some of these are things that I do myself, some of them are tips that come from the hundreds of conversations I have every single month with successful investors and then today I’m sharing them all with you.

Dave:
Alright, my first number one hack for tactics you should be using in 2025 is to be offer ready. And when I say offer ready, that means that you are ready to pounce. You have all of your ducks in a row so that when you find a good deal in this market and good deals will emerge in this market. We’ll talk a little bit more about that in just a minute, but if you have all of your ducks in a row, you will be able to capitalize on the transitional market that we are in right now. If you look at the data or you just talk to real estate investors who are doing things on the ground, what you see is pretty clear that there’s a split in the market. Inventory is going up and so there’s more deals and still the majority of them are bad.

Dave:
You don’t want ’em, and that’s kind of always the case in real estate investing. You’re never going to have a time when everything that hits the MLS is a good deal, but right now to me, the difference between good deals and bad deals is particularly wide because a lot of sellers are just stuck thinking that they can get prices from last year or two years ago. Well, that’s just not true in the majority of markets. Meanwhile, some people are getting more and more motivated. We’re having more motivated sellers. So that means better deals are coming, but they’re going to be few and far between, and that means the people who are going to succeed in 2025 find great deals, add to their portfolio are the ones who are ready to pounce on those opportunities when they find them. So that is sort of the overarching hack that I want to share with all of you, but there’s actually a couple of other steps that you should probably learn about in order to actually be offer ready.

Dave:
The four things you really want to focus on is one your team. That means having a great investor friendly agent because if you’re going to write offers for the majority of people, they need an agent to be able to do that. You also need an agent who is really good at comping in today’s market because as I just said, prices are all over the place, and so if you find a deal that you like, it’s a great asset. You need to not only make sure that it’s an appropriate price right now, but ideally in 2025 you want to be buying below current comps. A lot of markets right now are at risk of modest declines, one 2%, something like that. So ideally when you’re buying right now you buy one 2% undercurrent comps. That’s going to protect you and a great agent can really help you do that.

Dave:
We have ways to match you with agents on BiggerPockets. If you don’t have one of those, go to biggerpockets.com/agents. You can get match for free. So that’s one. Obviously you also need the other elements of your team as well. I think that’s important to have a lender of course, to have a property manager if you’re doing a buy and hold and if you’re going to do value add, I think it really helps to have some contractors lined up. Now, every deal you do, you’re going to have to go out and get it bid, but having initial conversations with two or three contractors so that you know that when you go out and make an offer on a deal that you can execute on your business plan quickly, that is going to be super important here in 2025. The second thing is of course, just educating yourself.

Dave:
This is kind of always true, but I find that a lot of people start looking at properties and looking at deals before they fully understand exactly how to operate their deal, and that is what gets people frozen when they actually see a good deal and then they’re unable to pull the trigger because they lose confidence, they don’t feel like they actually know what they’re doing. That’s the other step in being offer ready is just knowing exactly what you’re trying to do and having a game plan for what your buy box is, how you’re going to execute that and learning everything you need, whether it’s through this podcast, through YouTube, whatever it is, go learn what you need to know before you start looking at deals. The third thing you need to do to be offer ready is to get a pre-approval. This is super important because right now what I’m seeing at least in the deals that I’ve done in the last two years is that I’ve not necessarily had the highest offer for my deals, but I’ve had the strongest offer because I’m reducing the risk for sellers.

Dave:
I give them a very clear look at who I am and that I’m going to close on the property. The biggest problem for sellers right now is yeah, prices are going down. So that’s the biggest problem. So maybe the second biggest problem is that a lot of contracts are getting canceled. People put something under contract, then they can’t get financing or something falls apart. So personally, my strategy for bidding on properties has been to either put more money down, more earnest money, have a really good pre-approval prequalification ready to offer to show that I’m serious and unless there’s something bad that comes up on the inspection or there’s something on title, then I am going to close on this property. And so having a conversation with your lender to position yourself for strong offers is super important. In 2025, the last part of being offered ready is something I call benchmarking, and I should probably talk more about this on the show, but it is something I do pretty much every day and I really recommend that people do in their investing career.

Dave:
And this is basically looking at a lot of deals and figuring out what the average deal is in your area. That’s why I call it benchmarking. You need to come up with a benchmark of what you can get on an average deal in your market with your strategy. For example, if you were to go out and buy a duplex in St. Paul, Minnesota, what’s the cash on cash return you’re going to get? What is the financing you’re going to get? What is the rents you’re going to get If you don’t know that cold, it’s going to be really hard to spot these good deals. When you’re out there and there’s a lot of garbage, but a lot of good deals, you need to be able to compare it to a benchmark. You need to look at the deal in question and say, is this better than the average deal in my market?

Dave:
Is it worse than the average deal in my market? And if it’s better, which it needs to be for you to actually offer on it, how much better? Is it 5% better? Is it 50% better? This exercise, I think to me has always made me feel confident when I offer on a property because I know I’ve looked at 50 deals this year in certain areas of the Midwest, I haven’t offered on most of them, but when those come around where it’s like, oh man, this one is better in every way than all the other deals I’ve been looking at, that’s when you know how to pound. So I really recommend that you do this benchmarking. That’s by analyzing deals. That’s one way to do it. The second way is we have a tool, free tool in BiggerPockets called Bigger Deals that allows you to look at cashflow and expected returns on properties.

Dave:
And then the third way is just talk to other investors. Talk to people in your market who are doing deals, who have done deals recently and see what they’re getting. They’ll probably tell you whether it’s on the BiggerPockets forums, atea, local friends, whatever it is, ask them what their cash on cash return is, ask them what their mortgage rate is. Find that out because knowing what the average is and knowing that you as an investor, your job is to do better than that average, that’s going to enable you to go out and execute on those deals. So again, this is my first hack, kind of a conglomerate hack. It’s like five things in one. I know I’m cheating on my own episode format here, but I really think being offer ready is sort of the key to jumping on good deals right now. Again, those things that you need to do to be offer ready to educate yourself, have a great team, get that pre-approval locked up and you’re financing locked up, and then do benchmarking so you’re able to identify the deals and then go execute on them quickly.

Dave:
To me, this is going to be a huge divider for which investors succeed and which one just sit on the sidelines in 2025. This week’s bigger news is brought to you by the Fundrise Flagship Fund, invest in private market real estate with the Fundrise Flagship fund. Check out fundrise.com/pockets to learn more. The second hack is something I’ve used a few times in the last year now, and I feel like this is kind of the perfect tactic strategy for 2025, at least for me. And the way I approach real estate investing, it is called the delayed Brr. I need a better name for it. If anyone has a good name, drop it in the comments either on YouTube or on Spotify because I could use help branding this. But basically what it is is the BUR method, which stands for buy, rehab, rent, refinance, and repeat.

Dave:
The idea behind a burr is that you take a property, a rental property that is not up to its highest and best use, you renovate it, you increase the capacity to generate rents from it, then you rent it out to great tenants, you refinance it to pull some of the equity that you built by improving that property out, and then you take the money that you refinance and you invest it into the next deal. And what’s so appealing about a burr is that it allows you to sort of recycle your money. You are able to get a lot of the benefits of doing a flip, but you get to hold onto the property and get that passive income that over time is going to snowball and help you achieve financial independence. Now, the bur method, a lot of people have been saying that it is dead, and I think that is nonsense.

Dave:
We have guests on this show all the time who are successfully doing the bur, but I think the reason people think the burr is dead is because there is a period of time for a while when you could do this strategy and you could pull a hundred percent of your equity invested out of a deal, and that’s pretty hard right now. I think if you get 70% out, you’re doing great. If you do 80%, you’re doing excellent, that’s still recycling 70, 80% of your capital. That’s an amazing investment you can’t do pretty much anywhere else. So I’m still in personally on the Burr method, the way I’m thinking about this and trying to mitigate risk in a confusing market, but I am still trying to acquire rental properties for my portfolio. And the way I’m thinking about doing that is by finding bird deals that can work as rental properties today, even if I don’t do the renovation.

Dave:
So I think this is a tactic that works particularly well, one for people who have capital and don’t need to be perfectly optimized about recycling every single dollar that they have. The second one is for new people. If you are a newer investor, it can work really well to have a great low risk, high upside deal. The delayed burr is a really good thing to consider. Lemme just give you an example. I bought a duplex for about $250,000. The rents at the time were about $2,200 per month. So not quite the 1% rule, but getting close. So that property was cashflowing. It wasn’t incredible cashflow, but it was pretty solid cashflow to the point where I could hold onto this deal for six months. I could hold onto it for a year or two years if I needed to and still be earning a better return than I would be earning in the stock market or a lot of other places.

Dave:
And the reason I like doing this is because I bought this property with tenants in both units and they were good tenants, and so I didn’t really see a reason to kick good tenants out of a property to spend more money and renovate. Instead, what I decided to do is just see when these tenants chose to leave on their own. And when they did that, I would update the units as well as I could and hopefully drive up the rent. And that’s exactly what happened. It took about a year and a half, and I mostly invest in sort of downtown areas where it’s a lot of young professionals, so the turnover is relatively high. So I had a fair degree of confidence that this would be a year or two or maybe the first one didn’t renew their lease after about six months. So I spent three weeks renovating.

Dave:
It was just cosmetic. I didn’t need a ton. So three weeks renovating it, I drove up the rents on that particular unit. I think it was from 1100 to 1400, so that’s another $3,600 a year in income on this property with a relatively cheap renovation and only one month of vacancy. That’s the reason I love this delayed burr is because if you’re going to do it all at once, you sort of have to kick out your tenants and you have risk of just higher holding costs and higher vacancy costs. This way it was very minimal and I could plan it really well. Then I think it was like another six months after that, the other tenant left. I did the exact same thing. Right now, my rents on this property are about $2,800 per month. I think I put a total of 2020 $3,000 in.

Dave:
So I am now above the 1% rule even with all of my investment that I put into the rehab, and I was able to do this in a relatively relaxed way. I do this stuff out of state, and so it allowed me to not have to really nail the timing on everything to work perfectly. Instead, it just allowed me to do a really high upside deal, but over time without a lot of the risks of being so dependent on your schedule, that sometimes happens when you’re trying to really recycle your money as quickly as possible. I think this is a great strategy for 2025 because risk management is essential. I am looking for optionality. As I said earlier, I think there’s some markets where properties prices are going to decline by one or 2%. The labor market’s holding up pretty well, but there’s a chance we see an uptick in vacancies just nationally this year.

Dave:
And so I’m looking for ways to create optionality, and I think the delayed burr is a great way to capture upside. It can still be a home run deal, but it gives you more optionality and helps you mitigate risk. So that’s my second hack for you today. My third hack for 2025 is look at secondary and tertiary markets. Now, I know everyone wants to invest in the super hot markets. It’s the Tampas, the Austins of a couple of years ago. Those are the big sexy markets where everyone’s moving. They’re the headlines where all the companies are moving to and they’re great. A lot of them are seeing a correction right now, but these are great markets with strong fundamentals. I have nothing against these markets, but what I am seeing, and I look at this data quite a lot, is that a lot of the opportunity right now in 2025 lies in, I would call it secondary or tertiary markets.

Dave:
So these are smaller cities where they are still strong fundamentals. Don’t get me wrong. Don’t just pick a smaller city. It still needs to be a place with job growth and population growth, affordability, those kinds of things absolutely need to happen. But these second and tertiary cities just are more affordable. These are more affordable not just for people, but for businesses too. And you’re starting to see job growth pop up and accelerate around some of these smaller cities. And to me that means population will follow and it will mean housing prices and rents will follow as well. And I want to make clear that in some cases this does mean out of state investing, but it doesn’t necessarily have to be. You can still invest in a secondary and tertiary market even if you live in a big city. Just for example, I used to live in Denver and I invested there.

Dave:
I still do invest there, and honestly, I missed the boat on Colorado Springs. I was never even thinking about it at that time because Denver was a great market, but Colorado Springs about an hour south of Denver, and it was a much more affordable price point for a lot of the time I was living there and investing there, and I could have invested it in there and got a lot of appreciation upside. There are other cities close to Denver like Longmont that you can do. There are tons of examples of this all over the country instead of Cleveland, which is affordable, but maybe you go to Akron or instead of Nashville, you look at Knoxville, the economic engine that is Denver spills over sometimes into these secondary and tertiary markets. The same thing is true in other big cities throughout the country. And so look at Dallas, right?

Dave:
That’s kind of like a Megatropolis. Dallas itself has its own thing. Fort Worth has also grown as a product of Dallas, and so these are things that you can be thinking about as an investor, whether you want to do that out of state or in state. My thesis for two years, my investing thesis I’ve been saying is a lot about affordability. I really believe that the defining challenge and opportunity in the housing market is that housing is just unaffordable and it’s unlikely to get better anytime soon. And that reality or that thesis, I should say, it’s not a fact, but in that reality that I don’t think it’s going to get a lot better soon. I think it’ll get better. Slowly over time means that the markets that are affordable have more room to go up. That’s the basic theory, and so we’re seeing this in reality.

Dave:
The theory has so far proven true. We’ll obviously have to see where it goes from here, but that’s generally the hack that I am operating on myself. All right, that was our third hack just as a recap. Number one was being offer ready. Number two is trying the delayed burr. Number three was considering secondary or tertiary cities. The fourth hack that I have for you, I’m sorry I cannot avoid talking about this. It’s just such a good hack for the majority of people, is owner occupied real estate investing right now, the reality of the country and actually a lot of the world, it’s not just a US problem is that housing is expensive. No matter what you do, you want to rent, it’s going to be expensive. You want to buy, it’s also going to be expensive. Owner occupied strategies are one of the few ways that you can actually reduce your overall living expenses, and I know that a lot of very prominent real estate investors and educators say that your primary residence is not an investment.

Dave:
I think that is absolute nonsense. It is just not true. I have personal evidence to refute that. I think the way to think about it is that your primary residence is not always an investment. Some people go out and buy their dream home and it’s overpriced, and then it’s not an investment. That is true, but if you want to make your primary residence an investment, you absolutely can do it. There are two tried and true ways to make huge returns on your primary investment. Those are house hacking and the live and flip. We talk a lot about house hacking on the show because it’s just such a good obvious thing to do, but it is especially true when renting is super expensive, when ownership is super expensive, it’s just a great way to offset your expenses. Now, it doesn’t work in every single market. Sometimes in some markets, I’m going to pick on LA or Seattle where I live.

Dave:
Sometimes those markets, it’s so expensive just to buy and the rents aren’t proportionate enough that you’re better off renting and buying in the Midwest or something like that. But I’d say for probably 80% of markets, house hacking is a fantastic way to improve your financial position. If you’re not familiar with the concept, it’s basically where you buy a rental property that you live in, and that can either be in the form of living in a single family home, living in one bedroom, renting out the others to roommates, doing sort of the co-living model. For a lot of people that works because it’s super efficient. You can make a lot of cashflow that way, but some people don’t want that lifestyle, and so they choose instead to buy a duplex, a threeplex, a fourplex, live in one unit, rent out the others. This is part of the way I got started in real estate investing.

Dave:
It’s a great way to learn the business. It is a great way to lower your living expenses so you can save more money and invest more in the future. There’s all sorts of benefits including better financing, and so house hacking is always a great strategy, always a great tactic that you can use in real estate investing, and 2025 is absolutely no different. The other sort of light bulb that’s gone off for me in the last couple of years about owner occupied investing strategy is this concept of the live-in flip. This is basically when you buy, again, a property that is not up to its highest and best use and you renovate it and get it up to its highest and best use while you’re living in it, and that can mean a lot of different things. Some people are willing to buy a house that has a shoddy roof and there’s rain coming through.

Dave:
That’s not me. Some people are willing to just buy a property. The house I live in right now totally livable. It’s great. Are there renovations that need to be done? Yeah, but I can do them at my own time and expense as I see fit, and there are a lot of benefits to this model, but the main one is the tax benefits. You might be thinking to yourself, and it’s a good question. It’s like, why wouldn’t I just live in one house or rent a house and then flip another house? Well, the tax code is super advantageous for the live and flip because in the tax code it says that if you live in a property for two out of the last five years, so you just need to live in property for two years basically and then sell it within the next three. If you do that, you can get all of those gains from your flip tax free, no taxes.

Dave:
It’s amazing. There is a limit. I think it’s two 50 for individuals up to 500,000 for married couple. If you’re making over $500,000 on a live-in flip and you’re paying taxes, you should be happy. You should be thrilled to pay those taxes because you have hit an absolute grand slam on a flip. So that to me, the limits on the tax deductions are really sort of insignificant. So this is just another tactic that you can use to lower your own living expenses and turn what for most people is like your primary expense, your living expenses into an actual investment building equity, tax-free equity. That’s why I think the live and flip is a really viable option for a lot of people. So that’s the fourth hack is owner-occupied strategy. I’m agnostic. You want to do a house hack, you want to do live and flip.

Dave:
Both can be great investments. Now, let’s go to our last but certainly not least hack, and it’s building off our fourth one, which is the owner occupied strategy. The number five hack is to steal someone else’s 3% mortgage, and by steal, I don’t mean actually steal it. I mean legally acquire someone’s 3% mortgage. That’s probably a better way to put it. But basically the reality is we all know this, mortgage rates are still super high in 2025. We’re seeing six and three quarters right now. Hopefully they’ll come down a little bit. But there are millions of homeowners right now who are sitting on low fixed rate mortgages, whether these are FHA loans, conventional loans, VA loans. There are some mortgages that are that low and are what are called assumable mortgages. An assumable mortgage is this really unique thing that basically allows the buyer maybe you to take over the seller’s existing loan, including the interest rate, the loan balance repayment terms.

Dave:
This is not the same thing as subject to where you are a party to an existing mortgage. An ASSUMABLE mortgage is you are actually taking over your, are getting put on the loan documents for the new mortgage and it basically allows you, instead of getting a new loan at today’s rates, you step into a loan from 2020 or 2022 when rates were historically low. Now, like I said, this one is building off the previous hack because for most situations, consumable mortgages are only available for owner occupants. That’s not available for just a regular investor, it’s for house hackers. It’s for live-in flippers or even if you want to do a short-term rental that you live in part of this is another way that you can do it as well, and this is just such a game changer that I think most people aren’t actually looking for.

Dave:
Just think about it, you can get the same property and instead of paying 6.5%, you might be able to pay 4%. You might even be able to pay 3%. There are people out there with mortgages at two and half percent, something like that. Those savings can be hundreds or honestly even thousands of dollars every single month on your expenses and that obviously will let you save up more money to invest elsewhere. So this is such a great way to invest right now if you can find it. Now, not every mortgage is assumable, but the three things you can target are FHA loans, VA loans and USDA loans, and you want to find properties that were sold from 2020 to 2022. Those are the super valuable vintage of mortgages, right? It’s like fine wine. You’re looking for the perfect vintage here, you want a 2020 to 2022 FDA loan.

Dave:
That one is going to treat you just right. You can talk to your agent about looking for these properties specifically. You can actually ask a listing agent. You can ask the seller sometimes in the listing notes these days because people know that these are valuable, they’ll put ’em in listing notes. I haven’t done this myself, but I have seen in some of the listing notes you kind of notice that listing agents price these properties a little bit higher because they know how valuable the consumable mortgage is. But in some cases that might be worth it. You obviously have to run the numbers and do the math, but I can see scenarios where I’d pay a little bit more, not like a ton more, but I would pay more to get that rock bottom interest rate. If it’s a fixed rate loan at 3% on an asset that I want to own, I would pay a little bit more for that, and I don’t think you should write that off.

Dave:
Now, again, not like 10% more, but if it’s a couple grand more to get thatum mortgage, that is definitely going to be worth it. You could probably do the math and figure out for yourself or when that is not worth it. So that’s it. That is my fifth hack for 2025 is to try and find an assumable mortgage. Just to recap, like I said, for me personally, the big picture strategy of real estate investing hasn’t changed. I’m looking for long-term investments, great assets I’m going to want to own. I’m going to be proud to own for the next 5, 10, 20 years, and I’m going to invest as much of my capital as makes sense into acquiring those assets. But the tactics that I use to acquire assets, the type of assets that I acquire are going to change and have changed throughout my investing career, both for the stage of my investing career that I’m in, but also due to market conditions.

Dave:
You have to react to what’s going on around you, and so these five tips will hopefully help you adjust your tactics to 2025, and again, they are being offer ready considering the delayed brr, looking at secondary and tertiary cities using an owner-occupied strategy and trying to find an assumable mortgage. Of course, those are just my five hacks. I’m sure you all have other hacks that you are using, so I’d love to know them. If you’re listening on Spotify, drop us a comment or if you’re watching on YouTube, drop us a comment as well. We want to know what your hacks are for successful real estate investing in 2025. Thank you all so much for listening to this episode of the BiggerPockets podcast. I’m d Meyer. See you next.

 

 

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No Income to Qualify, But Worth It? (Rookie Reply)

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Ashley:
Should you house hack in a high cost of living city? Do you flip or hold when your project goes sideways? And are there some loans that are simply too risky for beginners?

Tony:
Today we’re tackling real life investing dilemmas, breaking down exactly what works, what doesn’t, and how to sidestep costly mistakes so you can make smarter decisions right now.

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

Tony:
And I am Tony j Robinson. And with that, let’s get into today’s first question. So our first question today comes from Steve. Steve says, I’m new to real estate investing and BiggerPockets, and I’m debating my first move. So here’s my background. I’m 30 single, no kids, no property, high income, fully remote worker. I have $300,000 to allocate towards real estate, plus about another 100 KA year after taxes. First, lemme pause and say, Steve, congratulations. What an amazing position to be in.

Ashley:
This seems like the dream Bachelor. Come on, lady needs single no kids. How come remote worker can travel with you wherever wants to invest. There

Tony:
You go. We’ll bring Steve on for a special episode of the Ricky Bachelor. But back to his question, he says he’s currently renting an NYC but planning to move back to Los Angeles, which is his hometown, potentially sometime soon, either in the next couple of months or within the next year, tired of paying rent and want to start building equity. So here’s the dilemma. Should he number one house hack at NYC stay a couple of more years here, but buy a small multifamily now and offset costs with the rental income? The concerns with those scenario in Wesley has super strict landlord laws. High purchase prices would means that he’s sign up a lot of capital and it could potentially be in a less desirable area and it would likely not cashflow at all. Definitely not good for when he leaves. Option number two is to house hack in Los Angeles, another high cost living area, but basically he would move back, get a small multi-unit and offset his mortgage with rental income.

Tony:
Same here, not expecting any cashflow, but at least his housing costs would be similar to renting. The concerns here are pretty similar. The landlord laws in la, potential headaches himself managing, and then just also if he does move out, it’s not going to cashflow, it’s going to be cashflow negative. Option number three is the out-of-state rental. So goal here is to get skin in the game sooner by buying a cash flowing property elsewhere. He would definitely get a property manager concerns here. Remote investing as a beginner is at higher risk. And then the fourth option is just to house hack anywhere, right? So he says, because I can work remotely, I could find a market that has a profitable house hack, get great financing, just spend a year or two somewhere that I may have no desire to live. Now he goes on to say that he’s got this hybrid plan of continuing to research out of state markets and act if a great deal happens, maybe move back to LA live in Airbnbs to get a feel for the neighborhoods and house hack once he finds a great deal. But would love to hear from those who have house hacked in maybe high cost living areas started with out-of-state rentals. So again, a lot to unpack here for Steve, but I think the first thing is again, congratulations. What a great starting spot to be in to have that amount of capital, the flexibility with your work. The options are really up to you. So what are you hearing, Ash? What’s your first thought for Steve?

Ashley:
Well, Tony, before we started recording, you were talking about how you just got back from an out of state market and spent two days there touring properties, meeting agents, meeting lenders, meeting contractors even. And I think that would actually be a really good step for Steve is to either eliminate out-of-state investing or to move forward with out-of-state investing is maybe pick two or three markets, do some data analysis, but then actually go to the markets and do these tours and meet people, network, connect, see what’s actually going on. Tony, what was the cost of your plane ticket and your hotel to stay there all in? What did it cost you to actually go and see these markets?

Tony:
Very minimal. I think the hotel, we only stayed one night. We got there super early on Monday morning. We left late on Tuesday nights. We literally stayed one night in the hotel. It was like 200 bucks and then the flights were free because I had points through my airlines. We didn’t even pay for a hotel, but I don’t know, maybe another couple hundred bucks if you wanted the flights and then food. So less than a thousand bucks definitely for me to go out there and spend almost 24 hours to understand this city. And I think it’s one thing to do the analysis and to look at deals online. And I did that before I got there, which gave me the confidence that I do need to go in person. But being there driving up and down the streets, I went with my son and we spent probably close to two hours just driving aimlessly around town, no destination, nowhere to go.

Tony:
We’re just trying to get a lay of the land and we got to see, okay, hey, this major highway, there actually is a bit of a difference if you’re north of the highway or south of the highway or man, once you get around north of the airport, it kind of feels a little bit different than if you’re south of the airport. So we started to get a feel of, okay, what is the box we want to stay in? And it was so much easier to do that going there in person, but the most important thing Ash, was that it validated everything we wanted about going into that market and it was well worth whatever a thousand bucks would’ve cost us to go out there to do that.

Ashley:
And that was for two people too. I mean your flight for only one, it decreases the price even more. And food for one, growing I sure was not cheap to feed. So I think that for me it would be a great recommendation is start there because I agree with California tenant landlord laws and New York tenant landlord laws, especially in New York City. So I would pick two or three markets, analyze them, okay, they look good on paper now let’s go look at them in person and set up appointments to walk properties. You can go, BiggerPockets has agent finder, lender finder, you can find all the team members, property managers that you would need in a market and set appointments to meet with them while you’re there. The next thing that I would actually look into is especially if you do the out-of-state investing, you get a property for cheaper than you would in buying a new primary in la.

Ashley:
But what if you were able to purchase both? So you could still buy a primary in LA and then do the out-of-state investing, but with your primary residence, is there an opportunity to turn that into a short-term rental? So since you work remotely, can you actually go and travel places and do things and rent out your short-term rental and have your mortgage covered and your expenses for going and traveling and staying somewhere? I always think of Olivia Tati, so I follow her on Instagram. We’ve had her on the podcast before. She’s always at BP Con and probably will be in Las Vegas this year. But she has a house in Denver that when she goes and travels, I think she was just in Italy, she rents out her house and it is more than covering her mortgage payment and her expenses to go and travel. So I think that could also be a great idea also, especially since you can work remote.

Tony:
Yeah, so many good points there Ashley. And I think there’s pros and cons of investing in a high cost of living market. One is that, I mean, you know it, right? You live in New York City, you used to live in Southern California and la so you know those markets, right? The ins and the outs and as I was saying about me going into Oklahoma City and having to spend hours just trying to get the lay of the land, you already know that for both of those markets. So I think there is a slight competitive advantage maybe of you going into that market. But you mentioned all the cons, right? More expensive tenant landlord laws. You’ve got to weigh those out for yourself to see which one wins out. But I think maybe the bigger question for Steve who asked this this question is what’s more important to you?

Tony:
Is it the equity growth? Is it the tax benefits? Is it the cashflow? Because from what I’m seeing, you’ve got a really good financial profile in terms of your income. So do you need the cashflow or do you want the cashflow that these properties are going to produce or are you trying to accelerate your ability to go part-time at work or something like that? Or is this more of a long-term place that whenever you do finish your very high income producing career, you’ve got a large portfolio of properties that are paid off that pays you well every single month? Because with 300 k, I mean even if you bought one property every two years in California or New York or whatever it may be, put ’em on 15 year fixed mortgages in another 30 years, you’re going to be pretty well off because you’ll have paid off properties that have probably appreciated pretty well over time as well.

Tony:
So I think the bigger question or what needs to be answered first is what’s more important to you? Is it the cashflow today or is it the equity in the growth long-term? And that’ll probably dictate which move makes the most sense for you. And I think the last part of Steves questions, just like advice for investing remotely, Ashley, I think you hit the nail on the head of the best first step, which is going to BiggerPockets, going to the agent finder and finding an agent in those markets you were thinking about. That’s exactly what I did with Oklahoma City. I went to the agent finder, punched in my contact details. I had four or five agents reach out to me. I contacted the one who I felt I had the best kind of initial rapport with and she showed me around the town for almost 24 hours.

Tony:
So that would be my first step is finding a good agent because then she introduced me to a contractor who might have said a few jobs and walked those jobs with us. She, she’s inserted me into her network of people that are already there. She hosts meetups, she knows all the title companies. She’s like, oh, I just got some off market deals from the title company. Let me show you those. So you find the right agent in those markets. It makes everything easier on the acquisition side and then the management side, you already know you’re going to find a good property manager. So I think that takes off a lot of the difficulties of managing remotely because you’re going to have someone who’s there locally to do most of that work for you. So if you’ve read the book Long Distance Real Estate Investing, you’ve got a good framework, but I don’t want you to shy away from long distance investing just because you haven’t done it before.

Tony:
Lots of people do it successfully. My first year was long distance. We’ve interviewed lots of folks who’s first year was long distance, so it is possible just built the right team in that market. So for real, managing tenants can feel like a lot of work, but they don’t have to be. For me, it all changed when I found Turbo Tenant. They’re a free software that makes managing rentals super easy. I used to waste so much time on paperwork chasing down rent, but now with Turbo Tenant, I have everything in one place. They even have state specific leases, digital condition reports, and a simple way to schedule showings without all of the back and forth. Their automated rent collection saves me hours every month and their maintenance management keeps me organized. Everything’s in one place on your phone so you can be a landlord from anywhere. I’m actually good at managing rentals now, not just finding deals. Check it out at turbo tenant.com/biggerpockets and create your free account today.

Ashley:
Okay, welcome back. So our next question comes from Chris. Hey BP community. My business partner and I are in the middle of a tough situation on a remote flip project in Decatur, Georgia. And we’re looking for advice from seasoned investors who’ve been through similar situations, we’re based in LA and open to creative or unconventional strategies. As long as they help preserve capital or minimize losses, we’d strongly refer to exit with at least a break even outcome or pivot to a hold strategy that preserves the capital and gives us another shot at resale in 2026 when market conditions might improve. Here’s our property overview, the purchase price, 198,000 in September of 2024. We financed it with a hard money loan of 248,000 and we have this extended until September 23rd, 2025. Our monthly holding costs are $2,800, all in costs with agent fees holding rehab. Saging overages were at 354,000.

Ashley:
So this property was converted from a three bed, one bath to a four bed, two bath rehab. Delays and permitting issues pushed us into June, 2025 when we originally thought it would be done by February, 2025. And currently the Reno is only 75% complete. So he goes through and mentions some of the renovation status as the contractor hasn’t made any progress for over four weeks. Floor joists for the addition are exposed in the back. Second bathroom and closet still need to be built out. And the last draw from the hard money lender will fund completion, which is already built into the cost basis. We originally comped the flip at 375,000 now based on recent comps and our contractors finish quality, we’re really sickly looking at 320 5K to 340 5K on the open market options. Do we sell as is, which basically would put us at a 73 K loss.

Ashley:
Do we refinance it and hold it as a long-term rental? That would give us a 46 K loss. That would rent for about 2200 per month, which would be negative cashflow. We refinance it and run as a short-term rental or midterm rental. We would keep the 46 K into the deal, that’d give us about $300 per month, but we’d also need to put in additional money about 12 K to furnish it. And self-managing would be tough and we’d have to find a property manager then pay that out of our cashflow. The last thing is to finish and sell, and that would be a 27 K loss. So don’t even go ahead and finish the rehab, just sell it as is. And that would be the 27 K loss. So what would you do in this situation? Has anyone else been in a similar situation? And if there are experienced investors listening, they’re going to say yes.

Ashley:
We have been in similar situations where the deal does not come out as you would have thought, I have a property right now that’s been sitting on market since December, I think. So he goes on to ask, would you do short-term rental, midterm rental, do you ride it out? Do you sell it? What is the best thing for you? So Tony, looking at this information before we even give an answer, I guess, is there anything else that these two partners should be thinking about when they’re making their decision besides just how much money they’re losing?

Tony:
Yeah, that’s a great question. I think there’s also, I don’t know if maybe peace of mind is the right word, but it’s like how much energy are you going to have to invest on all of these different options that you’ve laid out? Some of these are maybe higher energy, higher effort activities. Some of these may be lower energy, lower effort activities, and you’ve been getting punched in the mouth it feels like for the last few months. So which one of these options is going to bring some peace, I think is an important one. And then I think the other piece is just financially, where are you at? Do you have the cushion to absorb these losses? You used to say a lot on the podcast, if you have the money to solve a problem, it’s not really a problem. So I think the question is, do you guys have the cushion to write the check and be fine?

Tony:
And I think that adds another dynamic to the equation here. But I think before we even go into solving this issue or coming up with solutions, which to try and figure out what went wrong, there were some timeline issues, there were some RV issues, there was maybe some scope adding the additional bedroom and bathroom. Was that too much of a scope? So first on the timeline piece, I just wonder why did you guys fall so far behind? Was it that the contractor gave you a date and said, Hey, we can be done by February, 2025. Because if that is the case, and this is just a lesson for all of our rookie investors who are listening, don’t ever take that date at face value. If a contractor tells you it’s going to be three months budget for six, if they tell you it’s going to be six budget for 10, don’t ever run your deals on the timeline that the contractor gave you Always add some additional timeline in buffer because things do happen. Sometimes it are their fault, sometimes it are outside of their control. We never know what’s going to happen when we start opening up walls and we try and go get a permit and something else happens. So for all of our is from a timeline perspective, make sure that whatever data contractor gives you always adds some buffer there. And then it seems like actually there was also some issues with the rv.

Ashley:
I think that was just because the market has changed. We definitely have seen a shift into a buyer’s market where they thought they were going to be able to sell in February. So their comps were from December, January, and then now they’re saying that what has sold recently is not what those properties were selling for six months ago,

Tony:
But they also added that, they said based on recent comps and our contractors finished quality. So I wonder what that part is about. It’s like was it the scope that you guys collectively came together and that the scope just wasn’t strong enough to reach that 3 75 a RV? Or is it like, hey, we had the right scope, but the contractor used cheap materials or maybe didn’t do things the right way or

Ashley:
Yeah, I’m literally pitching the trim not matching up completely put not perfectly. Or the tile isn’t perfectly square, it’s a little off center. That’s what I think at least far as finish quality. So on the point of the contractor, Tony, is there a contract in place and is there any way to go after this contractor, whether it be in small claims court or to just sue this contractor because the property is not completed

Tony:
And that’s an option as well, and maybe another way to recoup some of the funds that you guys might lose on this deal. But I was with Dominique Gunderson who we interviewed on the podcast recently, and I was asking her about her flips that she does in New Orleans because she’s also remote. She’s right now in California. All of her flips are in New Orleans. And I said like, Hey, how’s the market been for you? And she said, Hey, it’s also shifted for me. She’s like, but what I’ve found is that the way that I’m moving inventory is I’m pricing slightly lower than all of the other comps that I’m finding. So if I have a comp at 300, I’m going to list it at 2 95, I’m going to list at 2 2 90. And that’s how she’s been getting her inventory to move. So I think the lesson for a lot of our rookie investors right now is whatever comps you’re seeing, because we know that we are moving maybe more so into a buyer’s market, you have to decrement whatever those comps are by a certain percentage. Again, I was in OKC yesterday and I saw comps and I was not using those numbers as my arv. I was knocking off five, 10, $12,000 to try and make sure I had some cushion built in for whatever fluctuations the market might have. And I didn’t know that. Had I not talked to a more experienced flipper or had I not myself had flips that have sat for a long time. So I think you learned some of those as you go through the process.

Ashley:
And Tony, we actually were lucky enough to have Dominique come to be pecon with us. She is actually on one of the how-to tracks that Tony and I put together. It’s going to be her and James Dard and James Danner’s, project manager Ryan, and they’re going to be sharing all of their secrets to success for estimating rehabs and running construction projects like this. So if you’re going to B pecon, make sure you attend that session. Also, if you guys, we want every Ricky to attend B pecon. So if you guys need an extra discount to come, Tony and I have a couple secret codes. Go on Instagram, send us a dm, I’m at Wealth from rentals, Tony’s at Tony j Robinson. Send us a DM and we’ll see what we can do to hook you guys up so you guys can come hang out with us.

Tony:
Alright, Ash, let’s finally answer this question for Chris. What should he do? He gave us a few options. If you are in his situation, what do you focus on? What are you going to do and why?

Ashley:
I think my answer has changed over the years. At first, I never wanted to fail. I would grind and do whatever it took to finish it, even if it meant going at a loss. But now I just like, I would don’t want to say give up, but I would not be so worried about finishing a project just to not be a failure that I didn’t even finish it and I’m selling the flip uncompleted. I think that I would either sell the flip now be done with it, get rid of it before you’re putting more money into it, or I would want to see the numbers a little bit more as it listed as a long-term rental. Because if it’s a couple hundred dollars that you’re losing in cashflow, it’s however much it ends up being. If that’s something you can manage for several years, is there an opportunity for it to appreciate a little bit more? Is there an opportunity to be able to refinance to pull out more money? So I would also look at that as an option too.

Tony:
I agree with you. I think the mindset piece here is super important, but looking at the options that he’s laid out, SE as is, which is a 73 K loss, refining and long-term renting, which is a 46 K loss, negative cashflow, the refinance and short-term and midterm renting still a 46 K loss with an additional 12 K, maybe even more. It’s your first time doing it. You’re probably underestimating how much it costs to furnish this thing. So that really comes out to, what is that? Maybe almost a 60 k loss if you refinance and short-term rent. In my mind, finishing it and selling it even at a 27 K loss is probably the best approach because at least you’re done with the deal once you sell it with all of these other options. What if something else goes wrong?

Ashley:
Like Tony, this 27 K to finish it and sell it? That is the least money to lose. But how do you know that nothing else is going to go wrong between then and now? I think that’s a big thing too, is what’s the risk going forward and will that number actually stay the same because it’s already changed so much too.

Tony:
Yeah, I think speed of finishing is probably important here as well. And they say there’s 75% done, how much more time will it take to get that last 25%? So yeah, I mean to me it’s smallest loss, potentially maybe the least amount of risk. But worst case, I mean maybe you try and list it, see what happens, and the plan B is that you just refinance and sell, right?

Ashley:
That idea is to try to sell it, see what happens. But in the process, start looking at what refinancing would look like so that if it doesn’t sell and it sits, you are already in progress of getting that loan to refinance it and rent it out. Another thing too is it is mentioned if he does refinance and hold it, he’s putting at 46 K loss. Technically it’s not a loss, it’s just that your money is sitting in that deal and you’re not pulling it back out. So I think that’s another thing too is kind of change your mindset on that, that depending how long you hold that property, yes you could still lose that 46 K, but you could lose more than that and the bank have to write a check to the bank at closing two years from now because it’s worth even less because a tenant destroyed the property or something like that. So I think the numbers do come a lot into play as to what to do, but I also think about how successful do you think you’ll be finishing the project to sell it If you do rent it out, what kind of headaches will come along with that? So there’s also that mindset piece and why you got into real estate investing and what makes it worth it at this point.

Tony:
Alright guys coming up, we’re going to answer the question of DSCR loans are really for beginner investors. We’ll share our thoughts after one final word from today’s show sponsors. But while we’re gone, be sure to subscribe to the realestate Rookie YouTube channel. You can find us at realestate rookie and if you’re on Instagram or at BiggerPockets rookie, you can find us there. We’ll be back with more after this. Alright, let’s jump back in our next and last question comes from Andrina. Andrina says, I finally want to dive in to put my training wheels to the test. I’m looking into investing in Ohio, but would like to know, has anyone used A-D-S-C-R loan? I initially wanted to do a bur, but since I’m not from the area real estate agents are telling me I should maybe start out with a turnkey to get my foot in the door.

Tony:
Can I please have the BP community’s thoughts on this? Is A-D-S-C-R loan worth it or does it depend on my strategy? I hate that my money will be stuck in the property though. Hoping to get some insight. So I think first let’s just define what is A-D-S-C-R loan? So A-D-S-C-R loan stands for debt service coverage ratio. So basically the bank is looking at how much revenue does the property generate and is that revenue enough to cover the debt service AKA, the mortgage? I believe this originated in commercial real estate, or at least that’s where it’s super prevalent because if someone goes out and buys a $100 million apartment complex, one person’s not going to cover that mortgage. So the bank is looking at the property itself to gauge can the property itself generate enough revenue to cover a $100 million purchase, a $100 million mortgage? And we’ve seen this DSCR loan make its way into single family investing as well. So that’s what A-D-S-C-R loan is. It’s looking at the property, not so much the individual to gauge whether or not it can cover the mortgage. So Ash, what are your thoughts? Do you think that DSCR loans make sense for rookie investors or are they too complex? What would your initial take?

Ashley:
I think they are actually easier getting A-D-S-C-R loan because they don’t care about you as much, so they’re not going to go into, let me see your mother’s bank statement. Sometimes when you get conventional lending on the personal side of where’s every dollar coming from. And so I think it is easier to actually get those loans, especially if you’re buying a property that has all the documentation, if it already has a tenant in place, actually easier to do because with the DSER loan, they’re going to want to see what the rental income is. And I’ve had the banks actually ask for the lease agreement, even though I don’t even own the property yet, they want me to already have it rented before I close on the loan. So sometimes I haven’t gone that route because first of all, I don’t want to commit mortgage fraud and make a fake lease agreement just to get this loan.

Ashley:
And the second thing is I don’t want to rent a unit a property to someone that I don’t even own yet. So even a lot of lenders will say, yes, this is a very, very gray area as far as that, the banquet assets. So having a tenant in place is better if you’re going to purchase a property that is, you’re going to use the DSER loan. But I think one of the really big questions in here are the things we need to discuss is that the real estate agent is saying that this person should start out with a turnkey because they are not from the area. And Tony, in our first question, you literally proved that you do not need to be from an area to be able to do the bur strategy, which is buy the property, rehab the property, rent out the property, refinance the property, and then repeat it.

Ashley:
So I think that’s the first thing is what strategy is for you and Adrina, if you don’t want to leave your cash into the deal and you want to be able to pull more of it out because you’re doing the B strategy instead of just putting down A-D-S-E-R loan is probably going to be a 20 to 25, maybe even a 30% down payment that you’re going to leave in there until you sell the property or refinance the property if you want to pull that money back out. So I think if you want to do the birth strategy, talk to some of the contractors in that area, ask the agents that you’re working with for recommendations, or maybe even find another agent that in sense of saying you shouldn’t do that can help you find a way to actually do that.

Tony:
Yeah, you bring up a really good point, Ashley and I just kind of didn’t even process for me that that was in the question as I was reading it, but I would encourage you, Andreina agents are agents. They’re not lenders. So I would go talk to as many lenders in whatever market it is in Ohio that you’re considering, and ask them what their loan products look like for Burr products or for Burr type properties. And I was able to do my very first real estate deal as a remote bird because I found an amazing banking partner who not only lent me the money that I needed for the construction, but they also sent someone out there to check in on the job to make sure it was getting done the right way. So I agree with you, Ash. I think there’s a lot of value in doing that.

Tony:
I don’t know why a Ricky would even have to necessarily use A-D-S-E-R loan to buy, even if it was a turnkey property, there was still other loan options out there that are non DSER. I think to Ashley’s point, the application process is probably simpler and not as in depth. But again, typically higher down payments, typically higher interest rates. So the cost of the debt is more so if you’re looking at the same deal and you can put 15% down loan or you can put a 25% down loan, the cost to acquire that deal is going to be different. If you can get approved, maybe conventionally, the interest rate’s going to be lower versus the DSE loans, so your cash flow is better. So I think it’s really weighing the pros and cons. I think the DSER starts to make a lot of sense when you are really focused on scaling and maybe your traditional banks are worried about DTI because you have so many mortgages going on and you’re not showing enough income yet on your tax returns, whatever it may be. I think that’s when the DS ER has become maybe a little bit more attractive, but it’s a Ricky investor. I would think that there are may be cheaper options out there that you can use in that first deal to really get the most either in terms of cost to acquire the deal or the actual cashflow you get on a monthly basis. So shop around. I think that’s the biggest thing. Just shop around and see which loan product makes the most sense for the deal that you find.

Ashley:
Yeah, and even with the Burst strategy, when you go and refinance, you can refinance into A-D-S-C-R loan. If you have a primary residence that maybe you’re moving out of and you want to use your FHA loan, again, you can refinance that primary residence into A-D-S-E-R loan. So you can go ahead and use that FHA loan product on another property for yourself. That’s going to be your primary. So there’s still lots of ways to be able to use the DSCR loan besides just on the purchase of the property. Well, thank you guys so much for joining us today. If you guys have questions, head over to the BiggerPockets forums, put your questions there. We pull them from there every single week. Thanks so much for joining us. I’m Ashley. He’s Tony. We’ll see you guys next time.

 

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