A dog is not just man’s best friend; it’s turning out to be a landlord’s, too. Pet-friendly rentals garner considerably more cash flow than no-pet rentals, according to a study from RentCafe. 

According to proprietary stats, the website states that U.S. landlords can charge an average nonrefundable pet fee of $315 on top of the average pet rent of $36/month. With rental margins tightening due to higher expenses and rising mortgage rates, saying yes to pets could not only yield higher rents but also lead to renewed leases and happier residents.

In a High-Stress World, Pets Are an Anxiety Buster

As of 2024, about 66% of U.S. households owned a pet, a sharp rise over the last 40 years, according to Forbes Advisor. It’s likely no coincidence that nearly 6 in 10 renters now have a pet, according to Zillow, up from 46% before the pandemic. The website says that almost half of renters said they passed on a rental because pets were not allowed.

“Allowing pets can be a strategic edge for landlords competing to fill units,” said Emily McDonald, a rental trends expert at Zillow, explaining that pet-friendly listings attract more interest in today’s market.

Zillow Trends found that listings that allow pets tend to lease up to eight days faster than those that do not. In New York City, generally one of the least pet-friendly cities, apartments that welcome furry friends attract pet parents about 26 days faster than those that don’t.

A 2025 report from the Michelson Found Animals Foundation, a philanthropic organization, found that pet-inclusive policies reduce tenant turnover. The report’s authors note that communities that embrace pet-inclusive strategies generally see residents staying up to 21% longer, lowering leasing and make-ready costs for landlords. 

“Property owners who respond to this trend can expect stronger tenant loyalty, reduced vacancies, and a significant edge in the competitive rental market,” Ross Barker, director of the Pet Inclusive Housing Initiative at Michelson Found Animals Foundation, said in a statement.

The cost of pet ownership is nothing to bark at. Americans spent roughly $147 billion on pets in 2023, according to Reuters, including food and treats, veterinary care, insurance, and supplies. 

For owners who cannot keep up with costs, pet care can be a significant source of financial stress. However, it also illustrates the demand for pet-friendly residences with modest pet fees.

What a Pet Package Looks Like

According to RentCafe data, a standard pet package includes:

• Approximately $35 in monthly pet rent.
• Refundable deposits over $300.
• Nonrefundable fees that average $315.

Dog Breeds, Insurance, and Liability

The RentCafe report shows that dog breeds, insurance, and liability are among the concerns of many landlords. To address this, most rentals have targeted restrictions that limit the types of dogs allowed based on size and “aggressive” characteristics.

Although dogs are predominantly the main pets tenants have, they are not the only ones. However, bans on domestic cats are rare. Rather, restrictions focus on litter-box training and vaccination requirements.

The New York Times reported that of America’s renter population, 59% of whom own pets, the majority are likely to be lower income, and for them, the additional cost of owning a pet can present financial difficulties in the housing crisis. As such, state and federal bills targeting pet fees have become an issue for housing advocates. Colorado became the first state to enact a law capping pet rent and deposits and prohibiting home insurers from imposing breed-based restrictions.

“Unless you can afford to rent in a luxury building, or absorb potentially hundreds of dollars in monthly or one-time fees, you may be forced to choose between housing and your pet,” Barker of Michelson Found Animals told the New York Times. “It’s not just an animal issue; it’s equally a human issue.”

A Contentious Issue

This, along with other similar proposals across the country, has evoked a strong response from landlord groups, concerned about the damage pets can cause to their properties and the inadequate compensation pet caps could engender.

“There are bad people, and there are bad dogs, and our job is to screen that and make sure that we’re providing a safe environment for everyone,” Russell Lowery, executive director of the California Rental Housing Association, told Fox News in response to his state’s proposed legislation advocating for eased pet rental restrictions, which was withdrawn after considerable opposition.

Under the California proposal, landlords would have had to provide “reasonable justifications” for denying a pet.

“Chasing mom-and-pop landlords like myself—small investors like myself—out of California is not going to solve the high price of rent; it actually is going to make it worse,” landlord Ivan Blackshear told Fox News last year, before the bill was withdrawn.

It’s important for landlords to remember that, under the Fair Housing Act, landlords generally cannot charge pet fees for support animals.

Final Thoughts: Welcoming Fido Without Killing Your FICO

Landlords who want to make their rentals pet-friendly without incurring the financial setbacks that a cat-trashed or dog-demolished residency can cause should adhere to a structured, repeatable playbook. Here are some steps to take.

Create a formal written pet policy 

Such a policy standardizes the following:

• Permitted type of animal
• Size or weight limits
• Number of pets
• Required vaccinations and local registrations

RentCafe finds that landlords with such policies experience fewer disputes and insurance issues than owners with a more informal approach to tenants.

Set transparent pricing

Create a predictable set of costs that lets renters know what to expect. These should include:

• A refundable pet damage deposit.
• Modest monthly pet rent.
• One-time nonrefundable cleaning fee.

Demand documentation

Treat pet documentation in the same way as you would pay stubs: as a requirement, not an option. It will serve both as liability protection and as behavioral screening. Standard pet documentation should include:

• Proof of vaccination
• Local licenses
• Flea/tick treatment records
• Emergency vet information

Make low-cost, high-impact property upgrades

Making your property pet-friendly can be relatively budget-friendly. Common-sense, durable design choices will help limit wear and tear and are a good idea to incorporate, whether your tenant has a pet or not. These include:

• Semigloss or scrubbable paint in high-traffic areas
• Vinyl plank or tile flooring
• Door kickplates
• Corner guards
• Easy-to-clean baseboards

This article is presented by Range.

If you’re a high earner juggling rentals, RSUs, a W-2, maybe some freelance income, and a growing investment portfolio, your financial life might be costing you more in taxes than it should. All these different streams of income can end up being too complicated for any one professional to track properly. Companies like Range see this firsthand across thousands of clients.

As your income rises and your wealth grows, the tax code actually gives you more opportunities to optimize. This means more deductions, timing strategies, and ways to offset gains. The more moving parts you add—equity comp, rental losses, stock sales, pass-through income—the easier it becomes to accidentally trigger a tax landmine that wipes out thousands of dollars you didn’t need to lose.

Most people assume overpaying taxes happens because of one big mistake. In reality, it’s usually the result of dozens of small, seemingly harmless decisions made throughout the year. This could mean an RSU vesting at the wrong time, a bonus hitting the same year you sell a property, a renovation completed in January instead of December, or an entity structure set up years ago that no longer fits your portfolio.

Individually, these moments feel insignificant. Collectively, they quietly inflate your tax bill—sometimes by five or even six figures.

We’ll break down why financial complexity is the silent tax you’re probably paying, and how smart investors simplify before they optimize. 

The Hidden Cost of Financial Complexity

When your income comes from multiple sources, your tax picture becomes less predictable. A bonus paid the same year as a property sale can bump you into a higher tax bracket. Capital gains can trigger the 3.8% net investment income tax. Short-term rental income may be treated differently than long-term rentals.

The issue isn’t that these events are inherently bad. It’s that most people discover the tax consequences months after the decisions were made, when it’s far too late to optimize.

High earners often assume they’re getting every deduction the IRS allows. But without proactive planning, it’s easy to miss:

• Real estate professional status opportunities.
• Cost segregation timing.
• Loss harvesting opportunities in equity accounts.
• Timing income to avoid bracket creep.
• Aligning deductions to offset large gains.

The tax code has plenty of doors you could walk through, but complexity makes them hard to see.

Gains, losses, and timing mistakes

Many investors don’t realize how much timing matters. Sell stock with a gain in the wrong year, and you lose the opportunity to pair it with a property loss. If you exercise incentive stock options too late in the year, you accidentally trigger AMT. And if you sell a rental in a year when you also have high W-2 income, depreciation recapture hits harder than it needed to.

Each individual decision, such as vesting stock, renovating a property, or selling an asset, might be perfectly reasonable. But without coordination, the tax effects stack, compound, and can eventually blindside you.

This is why high earners often feel like their tax bill “doesn’t make sense.” It’s not that anything went wrong; it’s that everything happened in the wrong order.

In a complex financial life, nothing exists in isolation. Every decision has a tax consequence, and every tax consequence affects decisions you haven’t made yet.

Most Common Places High Earners Leave Money on the Table

When your financial life gets busy, it’s easy to assume your CPA will catch everything, or that tax software will flag opportunities automatically. The truth is, most tax-saving moves must be planned in advance.

High earners consistently miss them for the same few predictable reasons. Here are the biggest areas where complexity quietly costs people thousands each year.

1. Depreciation mistakes and poor timing

Real estate investors often:

• Forget to add capital improvements to their depreciation schedule.
• Miss the chance to group properties for tax purposes.
• Delay or skip cost segregation studies that could accelerate massive deductions.

The mistake isn’t technical, it’s timing. These moves only work if you plan them shortly after acquisition, or before major renovations. Wait too long, and the benefit shrinks or disappears.

2. Equity compensation without a tax plan

RSUs, ISOs, and NSOs can be incredible wealth builders, but they also create enormous, unexpected tax events. Common pitfalls include:

• Exercising options late in the year and triggering AMT.
• Vesting RSUs in a year you already have high income.
• Selling shares too quickly and losing long-term capital gains treatment.

Without proactive planning, equity compensation can easily push you into higher brackets, reduce key deductions, and limit your ability to use real estate losses.

3. Entity structures that no longer fit your portfolio

Many investors set up LLCs when they buy their first property. By the time they own multiple rentals, short-term rentals, or active businesses, that structure may no longer be optimal. Common issues include:

• Using a simple LLC when an S-corp election could reduce self-employment tax.
• Having each property in a separate LLC when a holding structure would simplify taxes.
• Not considering a series LLC or the need for a different filing status.

Entity decisions affect tax brackets, QBI deductions, liability, and even financing options.

4. Stock gains and losses that aren’t coordinated with real estate

High earners often have assets spread across multiple brokerage accounts, sometimes with different advisors; sometimes forgotten entirely. This can lead to:

• Missed opportunities to harvest losses.
• Unplanned short-term gains hitting in high-income years.
• Selling appreciated stock without pairing it with passive losses.

One untimed trade can offset the benefits of an entire year’s tax strategy.

5. Waiting until tax season to look at your tax situation

By the time your CPA sees your documents in March or April, every meaningful tax decision has already passed. You can’t change your entity structure after the year ends, retime stock exercises or RSU vesting, or reclassify income or expenses. And you can’t retroactively harvest losses or plan property sales.

Most of the tax code’s best opportunities exist during the year, not after it.

Why DIY Coordination Doesn’t Work Anymore

By the time most high earners realize their financial life has become unmanageably complex, they’ve already tried the two default solutions: more spreadsheets or professionals. Unfortunately, neither solves the real problem.

Spreadsheets work when your financial life is simple: one job, bank account, a couple of investment accounts, and maybe one rental. Your spreadsheet can become a liability rather than a tool once you layer in your financial reality:

• RSUs and stock options
• Multiple rental properties
• A short-term rental or partnership
• A side business or 1099 income
• Several brokerage accounts
• Different advisors and systems

Manual tracking falls behind almost immediately. You can forget to update vesting schedules, lose track of taxable events, overlook how one decision changes your projected tax position, or discover half your income sources weren’t modeled correctly. Complexity increases faster than you can organize it.

So, you’ve outgrown your spreadsheet era. Most high earners will move on to hiring an expert to help with their tax tracking. This means adding: 

• A CPA for taxes.
• A financial advisor for investments.
• An attorney for entity structure.
• A planner for insurance or estate decisions.
• A bookkeeper for rentals.

Expanding your team of professionals might sound like a good idea, but none of these professionals see the full picture:

• Your CPA never sees your vesting calendar.
• Your FA doesn’t know when you’re selling a property. 
• Your attorney doesn’t know how equity comp affects your tax bracket. 
• And your bookkeeper doesn’t know your long-term investment plan.

You become the quarterback: translating advice, reconciling contradictions, and trying to make everything line up. This is where most tax inefficiencies are born.

When coordination depends on you, you can:

• Get tax advice that contradicts your investment plan.
• Make investment decisions without understanding tax consequences.
• Choose entities that don’t match your long-term goals.
• Time income and expenses in ways that clash across assets.
• Lose deductions because something changed and no one updated the strategy.

You’re not unqualified—your financial life is just too big to run solo.

Without one place where everything comes together—your rentals, stock compensation, business income, long-term investments, tax planning, and estate plan—your strategy can’t keep up.

This is exactly why many high earners, even extremely successful ones, unintentionally overpay taxes year after year.

The Case for Integrated Tax Strategy

By now, one thing should be clear: You might be overpaying taxes, not because you’re careless, but because your financial life has become complex, and you can’t be reactive during tax season. When your income, investments, equity compensation, and rental portfolio all move in different directions, the tax code rewards people who coordinate those moving parts—and penalizes those who don’t.

If your CPA, financial advisor, and attorney all operate in separate silos, you’re guaranteed to miss opportunities. This is exactly the problem Range set out to solve.

Range brings all this under one roof: your tax strategy, investment picture, equity compensation, real estate, and long-term planning. Instead of guessing how one decision will affect everything else, you finally get a forward-looking strategy that adapts as your life changes.

With an integrated team working year-round, you can:

• Time RSU exercises and vesting for maximum tax efficiency.
• Coordinate property sales with gains and losses across your portfolio.
• Optimize depreciation and cost segregation timing.
• Align your investment strategy with tax brackets and phaseouts.
• Reposition entities as your rental or business portfolio grows.

You stop leaving money on the table simply because no one was looking at the full picture.

Your Next Step: See How Much You Could Be Saving

If you suspect your financial complexity is costing you more than it should, or you simply want a clearer, more proactive plan, now is the moment to take action.

Range will analyze your full financial life, identify inefficiencies, and build a coordinated strategy designed to keep more of your money working for you.

Ready to see how much you’ve been overpaying, and how much you could be saving? Schedule your personalized Range demo today.

Disclosures:

Range is an SEC-registered investment adviser. Registration does not imply a certain level of skill or training. Investing involves risk, including possible loss of principal. The information provided is for informational purposes only and is not investment advice. Past performance is no guarantee of future results. This material is advertising and is not intended to be individualized investment advice.

These figures are gross of annual fees, reflect specific client situations, and are not indicative of future results or the experience of all clients. Actual results may vary significantly. These results reflect actual historical client outcomes achieved while under Range’s advisory services during 2025. They are not hypothetical or back-tested. The sample was not selected to present higher performance.

Additional fees may apply for certain services. Please see Range’s Form ADV Part 2A and Client Agreement for complete fee details.

A copy of Range’s Form CRS and Form ADV Part 2 is available at https://adviserinfo.sec.gov/ or upon request.

This article is presented by Baselane.

If you own or plan to own a short-term rental, there is one phrase you will eventually hear: the short-term rental tax loophole. It sounds like something accountants whisper about at conferences, but it is actually one of the most powerful legal tax strategies real estate investors can use. This rule allows many Airbnb and vacation rental owners to use their property’s paper losses to offset W-2 or business income, potentially saving thousands of dollars in taxes.

Let’s look at what it means, how it works, what qualifies, and how Baselane makes it easy to stay organized and compliant.

Why Short-Term Rentals Get Special Treatment

The IRS usually treats rental income as passive income. That means losses from your properties can only offset other passive income. For example, if your long-term rental loses $10,000 on paper, that loss cannot reduce your salary from your day job. It just carries forward to future years.

Short-term rentals are different. Because they operate more like businesses or hotels than traditional long-term rentals, they can be classified as active trades or businesses under certain conditions.

Once your short-term rental is treated as an active business, any paper losses from depreciation, repairs, or startup costs can offset your active income. That is the loophole. Instead of paying taxes on all your W-2 income, you can legally reduce your taxable income using losses from your Airbnb or vacation rental.

The Two Big Requirements

The IRS does not hand this breakout freely. To qualify, you have to meet two key requirements.

1. Average stay must be short

Your average guest stay must be seven days or less. If it is between eight and 30 days, you may still qualify if you provide substantial services, such as daily cleaning, linen changes, or concierge assistance. The property should feel more like a short-stay accommodation than a long-term lease.

2. You must materially participate

This is the rule that separates real investors from set-it-and-forget-it landlords. To qualify for active status, you must demonstrate that you personally participate in managing and operating the rental. The IRS offers several ways to prove this, but the most common are spending more than 500 hours per year on the property, or spending over 100 hours and ensuring no one else spends more time than you.

Material participation includes things like communicating with guests, organizing maintenance, updating listings, and scheduling cleanings. The IRS expects you to track your time, down to the hour, so you can prove it if ever questioned during an audit.

The Tax Savings

Investors love this loophole because of the bonus depreciation. Every rental property owner can deduct depreciation, but short-term rental owners who meet the participation test can use those deductions to offset regular income.

Imagine you buy a vacation rental for $500,000 and run a cost segregation study on the property. Between depreciation, furniture, appliances, and startup costs, your accountant calculates a paper loss of $40,000 for the year. You did not actually lose that money in cash, but on paper, the IRS counts it as a business loss.

If your property is considered passive, you cannot use that loss to reduce your job income. But if your short-term rental qualifies as an active business because you manage it yourself and guests stay for a week or less, you can.

Now picture this: You earn $150,000 at your job. That $40,000 paper loss lowers your taxable income to $110,000. Depending on your tax bracket, that could save you $10,000 or more in taxes in a single year.

The Catch

The IRS knows this rule is powerful, so they expect proof. To qualify, keep detailed records of your average guest stay, the hours you spend managing the property, and all income and expenses. You also need accurate depreciation schedules and receipts.

It is a lot to track, and most hosts quickly realize that DIY accounting does not cut it. That is where Baselane comes in.

Simplifying the STR Tax Game

Baselane is an all-in-one banking and bookkeeping system built for landlords and short-term rental operators. It helps you stay organized, compliant, and ready for tax season without drowning in spreadsheets.

Automatic bookkeeping

Once you connect your bank or use Baselane’s integrated account, all your transactions are automatically imported and categorized into Schedule E categories. This takes the guesswork out of whether a Home Depot purchase should be labeled repairs or improvements. Baselane learns your patterns over time, helping you capture deductions that most hosts forget.

Separate accounts for each property

If you have multiple properties, Baselane lets you open separate virtual accounts. This makes it easy to see income and expenses for every property without mixing transactions. It is also a lifesaver if you need to show records of material participation for one property but not another.

Tax-ready reports

At year-end, Baselane automatically generates a tax package that includes your Schedule E report, cash flow summaries, and year-end statements. You can hand it straight to your CPA; they will have everything they need without your shoebox full of receipts (we’ve all been there).

Real-time cash flow and documentation

Baselane gives you live dashboards so you can see exactly how each property performs. It also lets you attach receipts directly to transactions, keeping everything in one place. If the IRS ever asks for proof, you will have it ready in seconds. This kind of recordkeeping not only supports your deductions but also helps prove your material participation, a key element of the rule.

Common Mistakes

Even well-meaning investors can slip up. Here are a few common errors to avoid:

• Not tracking time: The IRS expects detailed logs. Saying you worked a lot is not enough.
• Too much personal use: If you stay in your property for more than 14 days a year or more than 10% of the total rental days, it becomes a personal residence, not a rental business.
• Relying entirely on property managers: If someone else spends more time on your property than you do, you do not qualify as materially participating.
• Sloppy bookkeeping: Mixing personal and rental expenses makes it almost impossible to prove what is deductible.

Baselane helps prevent these by separating transactions, tracking expenses, and creating organized records.

The Bottom Line

The short-term rental tax loophole is a legitimate IRS rule designed for people who actively manage their rental business. Used correctly, it can save you thousands each year and accelerate your path to financial freedom.

The loophole only works if you qualify, track everything carefully, and file correctly. Baselane takes the stress out of that process. It tracks every expense, organizes your income, creates tax-ready reports, and helps you stay compliant without becoming your own accountant.

So while other hosts are sorting receipts at midnight, you can relax knowing your books, reports, and CPA package are done with ease. Your short-term rental is working just as hard for you as you are for it.

Dave Meyer:
Are you calculating cashflow the right way? Because this is the key metric that will tell you if a property is the right deal to buy and how your investments are actually performing. But it only works if you’re including all of the necessary inputs when you do the math. If you’re only subtracting your mortgage payment from your rental income, that is not cashflow. This is how you calculate cashflow the right way. Hey everyone. I’m Dave Meyer. I am a data analyst. I’m the head of real estate investing here at BiggerPockets, and with me today on the show is Ashley Care co-host of the BiggerPockets Real Estate Rookie podcast. Ashley, thanks for being here.

Ashley Kehr:
Dave. Thank you so much for having me today. I am excited to talk about cashflow.

Dave Meyer:
Yeah, it’s a super crucial thing and I think some people oversimplify it, but it doesn’t need to be hard. You just need to make sure that you follow the right steps. I don’t know if you ever see this Ashley, but I see these people on the internet all the time claim that they have this incredible sort of almost unbelievable cashflow on real estate deals, and then you sort of dig into it and you realize they’re clearly just leaving out some of the expenses or just not doing the math. So today what we’re going to do is show the audience how to do the real math, and I’m actually going to use a real on-market deal that I have recently been analyzing. I’m going to show you all every single number you need to include in your cashflow analysis. Explain why your vacancy, maintenance and CapEx expenses should be consistent every month, whether you spend that cash or not, and then we’re going to talk about how much cashflow you actually need right now and what constitutes a good deal. Because once you know that and how to calculate it correctly, then you can actually go out and pull the trigger on some great deals actually. Ready?

Ashley Kehr:
Yeah, I think we should start off with explaining what cashflow is to get started.

Dave Meyer:
Okay, well, it sounds simple, but how do you define it?

Ashley Kehr:
Yeah, so cashflow is the amount of cash or revenue each month on the property, or it could be for the year. So that’s after you get your rent income and then all of the expenses that are paid. So basically you’re taking your total expenses fixed and variable for the property and spreading them out over time so that it’s calculated monthly.

Dave Meyer:
I’m so glad you broke it down by fixed and variable expenses. I think that’s sort of the division where people get confused because sort of easy to do the fixed expenses, your principal and interest, your mortgage payment’s going to be the same every month. You know what your taxes, your insurance are going to be if you have a property manager, you know how to pencil that in. But then there’s this entire other expense category for real estate investors, which Ashley called accurately variable expenses because it varies every single month for your repairs and maintenance. You don’t know how much you’re going to have to come out of pocket in any given month for repairs and maintenance. Same thing with capital expenditures if you’re not familiar with that. Capital expenditures or CapEx is basically just bigger improvements that you make to a property. These are things like adding a new roof or doing an expansion, doing a renovation. Those can all be qualified as capital expenditures. Those are also variable expenses just like turnover costs and vacancy costs as well. And so there’s this whole bucket of unknown expenses that come into your underwriting when you’re figuring out cashflow. And understandably, this is where a lot of people get confused and hung up. So Ashley, how do you build this unknown quantities into your underwriting?

Ashley Kehr:
So a big measure of how much I am accounting for with those variable expenses is the age of the property

Speaker 3:
And

Ashley Kehr:
Also the market. So when I’ve invested in C class areas, even some D class neighborhoods, the turnover and the vacancy was way more consistent and I needed to increase the amount that I was adding in for those properties, repairs and maintenance and capital improvements. I needed to account for more for older properties that weren’t getting a full renovation. So age of the property and also the neighborhood, the market that the property is in I think can really help you factor those things in.

Dave Meyer:
Yeah, if you’re buying an A class, brand new construction, your expenses, your repairs, your CapEx are going to be pretty low probably for five or 10 years at least. But I think what you called out is probably the most missed part of cashflow calculations, vacancy and turnover. It’s pretty normal to have one month of vacancy every other year or maybe even every year depending on the market. And this is something you absolutely need to factor in. It doesn’t sound like a lot, but if you have one month of vacancy that’s 12% of your revenue for the entire year, that is the difference between a good deal and a bad deal actually, presuming that you could come up with a number, right? It’s going to be 1200 bucks a year for vacancy or turnover, whatever, how do you factor that in because you don’t know when those things are going to actually come up. So how do you put that into your deal analysis to make sure that you’re covered for that?

Ashley Kehr:
Yeah, so in your example, Dave, you just gave, if you’re thinking one month a year, every other year, you could account for one month’s rent, but I think if you don’t know that or understand the market in your area yet is using a percentage. So I think 5% should be the bare minimum. If you don’t have any vacancy, great, that’s just a bonus that you’re getting more rental and come back in your pocket. But I think 5% should be the bare minimum and then you can kind of increase it to there. So depending on the property, sometimes I’ll go as high as 10% to save per a line item. So that’s 10% for vacancy, that’s 10% for CapEx, 10% for repairs and maintenance. So it really depends on the property type and where it is, but I think a percentage is a great place to start and once you look at those expenses, sometimes it can be like, wow, I thought this was going to cashflow really, really great, just thinking, here’s my rental income, here’s my mortgage payment. But once you start to add in those percentages, it really does add up and sometimes can kill the deal, but you have to be so diligent that you’re not saying to yourself, oh, well this might happen.
I might have a vacancy, so this could be cashflow. So yeah, if that doesn’t happen, I could be cash flowing $500 per month, and I think that’s where a lot of investors get in trouble is they’re thinking of that variable expenses as maybe will happen. That’s worst case scenario when they should be thinking this is going to happen. This is money I’m putting towards the property.

Dave Meyer:
I think that’s just an important mindset for people to have that it’s not cashflow just because one month you had positive number in your bank account, what you need to do is average it out over time. You have to spread those costs, the CapEx, the vacancy over every month and just say on average, this is what if I think all these things, these variable expenses are going to amount to 10 grand in a given year. I don’t know what month they’re going to hit, but I have to take 10 grand, divide it by 12 months to 800 something dollars and I’m going to put that 800 something dollars into my deal underwriting and just putting that aside and making sure I know that Dave, that is not your money. That is the business’s money that is, this property’s money. So that’s sort of the mindset that I think people need to take and not to just look at that best case month that you may have and count that as your cashflow. You’re just going to be disappointed down the line. Alright, well I want to actually go through this and walk step by step how to do this the correct way so everyone who’s listening to this knows how to do this analysis, but we got to take a quick break. We’ll be right back. 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.
Welcome back to the BiggerPockets podcast. I’m here with rookie co-host Ashley care talking about cashflow, how to calculate it the right way, and we sort of talked about the mindset that you need to have the way to start thinking about this, but I actually want to go through and just run a deal analysis to show you that this doesn’t need to be hard if you’re following the right steps. And so I’m going to pull this up. If you’re watching on YouTube, you could see this. I’m just going to pull up the BiggerPockets calculator, but if you’re listening, I will do my best to explain everything that I’m doing. It’s a real deal that I’m looking at in western Michigan. This is a duplex. It’s a three one on each side. It is very old. It was built in 1890. It’s listed on the market for 350 grand.
It’s been on the market for like 75 days, so I think I could realistically get it for cheaper, but let’s just start here and we’ll see how it goes. I will pay probably five grand for closing costs, so underwriting that and then I would do a modest rehab. If you listen to the show, you’ve heard me called the slow. This is this thing that I like to do, which is renovate a property, but I don’t try and do it super quickly. I wait until the tenants move out, opportunistically, renovate the property, make the units nicer and add value, drive up the rents a little bit. But I think I could probably get this thing to maybe be 380,000 and I would only need to spend probably let’s say 18 grand. So not adding a huge amount of equity in terms of a RV at the current price.
So I’d probably want to buy it for lower, but also just want to reiterate that the reason I would spend that $18,000 is not only for equity, it would probably bring my rents from about 16, 1700 bucks a month, probably closer to $2,000 a month. And to me, that’s why I would do this, but I’ll go into that in just a minute. Then we will be doing our financing details. This part should be easy for everyone. I would buy this property putting at least 25% down and I got quoted 6.8 ish. Then I actually know exactly what the rents are going to be for this one, which is really nice. It’s two section eight tenants been there for a long time, so I like that. Property’s in good condition, four being really old. So I should just describe now that the floors need work. They’re pretty old.
The kitchen is dated, the bathroom is dated, the systems are okay. The plumbing and the electrical have been updated. It’s not like knob and tube, it’s not galvanized pipe, and there’s about 15 years left on the roof. Now there are some additional fixed expenses that we know too. This should be pretty easy to get. So the taxes on this property are actually about 2100 bucks right now, but property taxes everywhere going up. So I’m going to put it in $2,400 just because I think it makes sense to just make sure. Now I own a similar kind of duplex in the same market, so I’m going to say 1300 bucks for insurance. That’s about what I pay there. Now this is where we get to repairs and maintenance. So Ashley, help me out here. A 130 5-year-old house in Michigan, cold weather climate similar to buffalo. What do you put for repairs and maintenance here when you’re first underwriting a deal?

Ashley Kehr:
I think I’m going to do 8%.

Dave Meyer:
8%.

Ashley Kehr:
I like it.

Dave Meyer:
So one thing I often think about, I’m curious how you handle this is if I wasn’t going to invest that $18,000 I mentioned earlier I’d probably bump this up to 15%. If I was just going to buy this and hold onto it and not make any improvements, I would, but I’m comfortable this eight 10% because my intention is to go in and probably replace the floor soon to redo the bathroom and probably upgrade at least part of the kitchens. Those are a lot of the big ticket items. And I’m not talking about CapEx yet. This is just repairs and maintenance. So I am essentially going to proactively hopefully offset a lot of repairs and maintenance because I’m going to pay for that upfront. Do you do anything similar to that?

Ashley Kehr:
Yeah, especially if we’re going in and rehabbing the property. I think one thing that’s different with yours though is that you are waiting until the tenant moves out. So you’re running the numbers now that someone’s in there, but we should increase your vacancy more because you do know that it definitely is going to be vacant during that period of time when you’re going to be holding the property.

Dave Meyer:
Exactly. Yeah. So that’s definitely something to do. I’m doing this with another duplex right now and it’s going to take three months to do the renovation, and so three months of vacancy is a lot. It’s a considerable expense on top of the labor and materials that I’m already going to be paying. So what would you put in vacancy there for a property like this? Because that would be 25% vacancy, but that’s not going to be a going forward. So how would you think about putting in the right number here?

Ashley Kehr:
What class area is this?

Dave Meyer:
I’d say it’s like a B minus.

Ashley Kehr:
I’d probably do eight to 10% on this too.

Dave Meyer:
All right. I’m going to put it at 8% right now as well. And for me, this stabilization period, this first year probably I am not really looking that much at how it performs the first year, I am essentially saying this vacancy of three months, that’s an investment that’s basically similar to the money I’m spending on a rehab. It’s just more money I’m putting to position this for long-term success. I will put the vacancy at 8%. I think that’s a good number going forward. And maybe what I’ll do is I will just put in my repair costs instead of $18,000, which is my estimate for materials and labor. What I’ll do is add three months of vacancy costs here, which is another nine grand. So I’m going to put this at $27,000 in repair costs just so that when this calculation is done, it’s the stabilized performance of the property. And I don’t get hung up on what happens in year one while we’re doing things at 8%. I’m going to put my management fee at 8%. That is what I pay.

Ashley Kehr:
See, I usually bump it up depending on what the 8% is. So right now I self-manage like the deals I’ve partners with. I pay myself a property management fee. But I think it’s really important if you’re going to self-manage, you still bake into that management fee that you still put it in there in case someday you do want to transition to a manager. It doesn’t kill your cashflow. But also too, when I did have a property management company, there was a lot of additional fees that aren’t included. So I always like to bump it up a little bit. Like you said, the leasing fee they would do if there was an after hours, there would be a $25 fee or something. There was additional things added onto it.

Dave Meyer:
Okay, I like that. Then let’s do 10%. All right, then capital expenditures. This one is tough. How do you think about this one?

Ashley Kehr:
The same with the age of the property and what needs to be done. So when you have your inspection, one thing I always like to do is ask the inspector, okay, what needs to be replaced today? What needs to be replaced within the next two years? What needs to be replaced in the next five? What needs to be replaced in the next 10? And that’s kind of going to give me more and an idea of how much I need to go into it. But I’m thinking on this as an older property, I’m probably just going to do 8% on it too. Knowing you’re going to go in and put that 18 grand into it.

Dave Meyer:
I think that’s great advice, getting that information from the inspector. The other thing I think people really need to look at, especially when you’re doing small multifamily like this, is how many of each system are there? I’ve had triplexes or four units that have one boiler and that reduces your total expense because you have one thing to service and those things are enormous. They last like 30 years, whereas if you have a bunch of newer forced air furnaces, one in each unit, that’s going to be a lot more expensive. Those things break a little bit more frequently and you’re going to have to think about that. So the same thing goes for example for appliances. Appliances famously don’t last that long. If you have four units, make sure that you’re considering the fact that every seven to 10 years you’re probably going to have to replace that dishwasher, but you have to do it times four, unlike at a single family home. So make sure you’re sort of thinking through all of that. The benefit of course to small multifamily is that you spread the cost of the big things like a roof or siding across four different units. So there are some cost efficiencies, but just make sure you think each of these things through.

Ashley Kehr:
I think that’s a great point as to thinking about what type of mechanics you have in the property or appliances. A lot of properties around here have electric baseboard heat. It is super cheap to replace one of the baseboard heaters and not a big deal at all, but like I said, to do a whole HVAC system, a furnace, a boiler, those things very expensive. So looking at what type of mechanics are important too.

Dave Meyer:
I have this little spreadsheet that I use sometimes it just says, what’s the average lifespan of the item, the mechanic, whatever you’re looking at, what do I think it’s going to cost to replace that? And then you basically divide those things and you can figure out what it is annually. So if I think the roof has 15 years on this and its replacement value or cost is going to be $20,000, then I know 1300 bucks roughly per year I need to set aside for this roof eventually. Or a hot water heater is going to be four grand installed or whatever lasts for 10 years, that’s 400 bucks that you need to set aside. So you can actually do this kind of back in the napkin. You don’t need to get overly scientific with it, but just spend the time to think it through. That’s it in the BiggerPockets calculator.
If you’re watching this on YouTube, you could see that there are other fees like HOA fees, electricity, gas, but because this is metered separately, the tenants will pay this. I do pay garbage. It’s like the less than 50 bucks a month, but I’m just going to round up to 50 bucks a month. That’s all the input that we need to do. Hopefully you could see that this is not so difficult. You just need to think through each of these steps. We’re going to take a quick break, but when we come back, I will share with you if this property is going to cashflow and by how much stay with us. The Cashflow Roadshow is back. BiggerPockets is coming to Texas, January 13th to 17th, 2026. Me, Henry Washington and Garrett Brown will be hosting real estate investor meetups in Houston and Austin and Dallas along with a couple other special guests. And we’re also going to have a live small group workshop to answer your exact investing questions and help you plan your 2026 roadmap. Me, Henry and Garrett are going to be there giving you input directly on your strategy for 2026. It’s going to be great. Get all the details and reserve your tickets now at biggerpockets.com/texas. Hope to see you there.
Welcome back to the BiggerPockets podcast. I’m here with Ashley Care talking about the right way to calculate cashflow. Before the break, Ashley and I talked through how to do cashflow calculations properly using the BiggerPockets calculators. Now let’s see if this deal cash flows. So actually it’s not bad. It comes out at $388 a monthly cash flow, which amounts to, I’m rounding up a little bit, but basically a 4% cash on cash return. Is that a good enough deal for you?

Ashley Kehr:
No,

Dave Meyer:
Me neither. I’ve talked about this on the show. I would take a deal with the 4% cash on cash return using this kind of disciplined underwriting. If this was a neighborhood or an a plus neighborhood, this just isn’t. It’s a B minus neighborhood. I do think it’s in a good location for future growth, but that growth might be five years from now. It might be eight years from now. And so I would need to see a higher cash on cash return than this. But just given the spirit of this episode what we’re talking about, I do believe this property cash flows and I would feel comfortable that I would get this 4% return. And on top of that, you would also get amortization and all these other benefits. The BiggerPockets calculator tells us it’s about an 8% annualized return, which for me is too low.
When I look at deals generally, I say I need at least a 12% annualized return that’s handedly beating the average for the stock market, and I want to at least beat the stock market by a few percentage points. So this deal doesn’t work for me, but while we’re here, Ashley, should we just see what it would take to make this work? Because as we’ve talked about it before, this was buying at rental at full price and it’s assuming that I stay with the current rental model and don’t get increased rents because of improving the property. So let’s see what

Ashley Kehr:
Happens. This is my favorite part of it is decreasing the purchase price and seeing what I can offer.

Dave Meyer:
Exactly. And I know people get confused about this and they’re like, you can’t just lower the purchase price. No, you can’t, but you can offer whatever you want. That is entirely up to you. And this property has been sitting on for at least 70 days, maybe more. And so the negotiating leverage is there. What would you bring this down to? It was three 50 is what they’re asking right now. What would you test out?

Ashley Kehr:
Let’s test out 300. That may be too low, but let’s try that. And then that can give us if we can increase our offer a little or go down a little bit. But this is the easiest number to manipulate

Speaker 3:
Because

Ashley Kehr:
You could go and say, you know what? I think I could increase rents a little bit. Let’s change that. Or you know what? I actually think I can get the insurance cheaper on it or whatever. Those are the numbers you don’t want to mess with or manipulate. This is the one, the purchase price, what you’re going to offer.

Dave Meyer:
So if I drag this down to 300 grand, I would get a 7% cash on cash return significantly better. So that’s $630 a month, and the annualized return jumped from 8% to 16%. Wow, that is significantly better because if you think about this, yes, you’re coming out of pocket for less money, so your cash on cash return is going to get better and you’re taking out a lower mortgage, and so you’re going to have less interest to pay, especially over the lifetime of your loan. So actually to me, this is getting to a deal. I would buy a 7% cash on cash return to 16% annualized return. What do you think of this one?

Ashley Kehr:
How much are the fixed expenses a month?

Dave Meyer:
The total expenses are 3094, and of that the variable expenses are 1,266.

Ashley Kehr:
So that’s 1,266 of unknown example. That’s actually quite a bit of money that you are accounting for those other things too.

Dave Meyer:
So yeah, if you look at it when I’m taking vacancy maintenance CapEx, that’s 900 bucks a month essentially that I’m setting aside just gut check. I feel pretty good about that. That feels right. And to me, this is starting to feel like I feel confident if I could get this at 300 grand, I would get that 7% cash on cash return. And to me, that’s now an attractive cash on cash return. I don’t know if you have a rule of thumb you look for. Is yours higher or lower the same?

Ashley Kehr:
Actually, I would take a little less than this. This would be a good deal for me. I would take this. All right. The one thing that I would think about going back and changing after we’ve gone through all of this is instead of using the percentage of repairs and maintenance, I would add in, since this is in Western Michigan, snowplow removal as a fixed thing,

Speaker 3:
Because

Ashley Kehr:
That was a mistake I made on my very first deal in Buffalo, New York, not accounting for snowplowing. And it can be so

Dave Meyer:
Expensive, so expensive, it’s ridiculous

Ashley Kehr:
What they charge. The plow that killed my cashflow. I think we ended up cashflowing a hundred dollars on the first deal because I didn’t account for the snowplowing and how much that would be. So that’s something else to watch out for. What are those maintenance expenses you do know will happen that you need to maintain the property? Even landscaping too, maybe it’s a big lot and you’re not going to ask both of your tenants to share the lawn mowing responsibilities. So another one too is common areas. If there’s common areas, I have a five unit building and I have to pay a cleaner to go in and clean the common area. So I think once you get the basis of this, then that’s when you go and you start to nitpick the deal and break it down even more and see

Speaker 3:
Exactly

Ashley Kehr:
How accurate you can get it. But this gives you such a good basis. I can’t even tell you how many calculator reports I’ve saved in my portfolio. I think I became a member in 2017. I probably have a million of deal analysis

Dave Meyer:
Calculator reports, thousand deal

Ashley Kehr:
Analysis. And it’s so interesting to go back and to see those very first deals, how I’ve changed analyzing and gotten better at fine tuning than those first basically back of napkin math ones I

Dave Meyer:
Did. I think, yeah, I have gone from seeing everything with rose tinted glasses and being like, this is all going to work out to being completely the opposite. Everything’s going to be terrible. And if it’s still good on paper like this, then I’ll do it. That’s basically my criteria. So that’s helpful. I went back in and added another a hundred bucks a month in just general expenses for probably plowing something like that, still at six point a half percent ROI, which I like. And if you listen to the show, I’ve been talking a lot about this framework for upside era investing that I am a big fan of. And to me it’s like how do you underwrite super conservatively and then hopefully get better returns than even you’re analyzing? Because to me, the whole trick is like, okay, I feel confident I get at least a 6.5% cash on cash return.
That’s good, a 15.6% annualized return, that’s good. That is assuming no rent growth from this renovation. And so I would still underwrite this, but then what I would normally do is say, okay, what if I went up to 3,900? What if I could grow rent? Maybe not. But if I did, okay, then that gets me to an 8% cash on cash return and a 16.4% annualized return. I underwrote this deal with just 2% appreciation. This happens to be a B nine in this neighborhood, but in a very good growing market. And so maybe I get three or 4% appreciation, what happens then? I probably get a 20% annualized return. And so this is sort of the phase where I start to think about this is like, what is the minimum cashflow that I’m going to get? And then am I comfortable with the minimum? And then everything else on top of that is just a benefit that I hope I get, but I’m not counting on it mentally. So I’m not disappointed if this things don’t happen. I’m just delighted and happy if they do wind up coming about.

Ashley Kehr:
One thing that I had another realization as an investor over the years is that watching not only the cashflow increase over time because my expenses didn’t increase as much as the rental income did. One property I bought in 2017, I was cashflowing $300 a month when I bought it, and now I cashflow a thousand dollars per month on it, and it also has $150,000 in equity in it. And I think I put my down payment was maybe 35,000 on it, whatever. So now that I look back, I realize that’s the true value holding these rentals over long-term, getting them in a good area where they’re going to appreciate and you’ll be able to increase the rental income. So that makes me more excited than cashflow today, but especially as a new investor getting started, that little bit of cashflow is going to be so helpful with you in changing your life.
But when you are analyzing deals, you need to understand why you’re investing and what you’re investing for. Maybe cashflow isn’t really that important to you and you’re okay with a really small amount. You just want something that in 15 years has appreciated and so much and you’re just going to cash out and retire. Or maybe you want to quit your job now. So you want more cashflow than appreciation. Maybe you have a ton of time and you want those headache properties and class C areas like I did, I bought those $20,000 duplexes, great cashflow, but man, lots of turnover, lots of repairs, lots of headaches. So really think about that too as you’re figuring out what cashflow is good for you.

Dave Meyer:
I couldn’t agree more people always ask for a rule of thumb for cashflow. I always say to me it’s like they got to break even. I don’t personally buy properties that don’t break even. I know some people do. I don’t think that makes a lot of sense, particularly in the kind of market we’re in where appreciation might not happen for the next year or two. We might be in a flat market. You need to have some cashflow to be prepared and to cover any expenses that you have and to be able to hold on. But once I’ve reached that threshold, you got to look at it holistically. You can’t just say, I need 10% on every cash on cash return. Because the reality is ones where you get 10% are, as Ashley said, either big headache properties or in areas that are less likely to appreciate.
And so it really comes down to what your goals are as an individual. And personally, like I said before, I would buy a three 4% cash on cash return deal if it’s in an A or a plus neighborhood because I’m going to get other benefits if I’m in this beep minus neighborhood, 6, 7, 8 is probably the minimum that I would take on that kind of deal. And if I was in an area that I didn’t think would appreciate at all, I’d probably want 10 plus. So those are just rough rules of thumb, but unfortunately you can’t just say there’s this one hard and fast rule. You kind of have to look at the whole big picture of returns that you’re going to get and think about it as just a piece of that puzzle. Alright, well thank you Ashley. This is a great conversation. Anything else you think the audience should know before we get out of here?

Ashley Kehr:
Don’t forget your snowplow removal and your bags of salt and your shovels.

Dave Meyer:
I know half the country’s like, what are you talking about? Why would you even count snowplowing? But if you know, it’s so expensive. All right. Well thank you Ashley. We appreciate your time.

Ashley Kehr:
Yeah, thanks so much for having me.

Dave Meyer:
And thank you all so much for listening to this episode of the BiggerPockets Podcast. We’ll see you next time.

Ashley:
What if the only thing keeping you from your first deal is not knowing what a good deal actually looks like,

Tony:
Or maybe you’ve got your first flip lined up, but you can’t decide if you really need a general contractor or if you can manage it yourself.

Ashley:
And finally, the million dollar question every rookie is asking is now the right time to buy. We’re answering all three of those questions and helping you make smarter moves in any market. This is the Real Estate Rookie podcast. I’m Ashley Kehr.

Tony:
And I’m Tony j Robinson. And with that, let’s get into today’s first question. Now this question comes from Eric in the BiggerPockets forms, and his question is, I’m new to real estate investing and just finished reading Brandon Turner’s book on investing with no Money Down. I found myself particularly interested in multifamily properties, but I’m struggling to grasp what exactly defines a quote. Good deal when evaluating listing. Should I primarily focus on properties that seem undervalued? Are there specific market indicators or property traits that I should be paying attention to? I feel like I’m missing the bigger picture of what makes a property a great investment. If anyone could share some pointers or insights on how to identify a good deal, I would appreciate it. This is a really good question, right? Just how do we know if a deal is a good deal? And he asked a few different data points that he should be considering property traits or the value of the property.
And I think the first thing that I’ll say is that a good deal to me could be a bad deal to you and vice versa. And what Ashley looks at as a good deal could be a bad deal to me. And part of that is because we all invest for different reasons. We all invest with different inherent skills and we all invest with different amounts of time, effort, and energy that we’re willing to put into real estate. So for someone who is a busy corporate executive that works 80 hours a week and makes half a million dollars a year, a turnkey property at 20% down at a 6% cash on cash return could potentially be a good deal for them because they don’t have the time, energy, or desire to do anything more than that. And that could be a great deal to the person who asked this question 20% down on a turnkey short-term rental that’s cash flowing at 6% could be a terrible deal because you just talked about, hey, you’re looking for no and low money down strategy, so that doesn’t work. So I think the first thing to ask yourself is what am I looking for when it comes to real estate investing? What are the things that I need to understand before you even get into good deal versus bad deal as guess? I’m just curious, is there anything else just like strategically or from a theory perspective that we should be focusing on before we get into the details of the answer?

Ashley:
I think maybe just what is, like you said, your why for getting started, but define what actually gets you to that point. So if your goal is to build legacy and build wealth, well, do you want to put a ton of time and effort into doing that or do you want to maximize passive income to be able to generate that wealth? So I think the time and money commitment are two big pieces to the puzzle that you need to be really heavy on either one of them or have a mix and balance of the bolt so that one doesn’t outweigh the other six, seven. If you’re watching this on YouTube,

Tony:
If you don’t have a kid that’s maybe my son’s 17, so 17 or younger, you probably don’t get that reference, but six seven’s been everywhere, but I couldn’t help myself. I just saw you doing this. I was like, we got to get

Ashley:
That in, I’m proud of you. Yeah,

Tony:
My son’s going to be proud of me too when I tell him this story. So I think let’s talk a little bit about what actually makes a good deal. So when we talk about real estate, we talk about a specific property as an investment. There’s the cashflow that it produces, right? Like the actual cold hard money that comes off of the deal on an annual basis. There’s the cash on cash return, which is a measure of how good of an investment it is because maybe I’m getting a hundred dollars a month in cashflow, but if I invested nothing into that deal, technically I’m getting an infinite return if I get $1,000 from month in cashflow, but I’ve got a million dollars of cash sitting in the deal, more cashflow, but it’s actually a really bad return on my investment. So we look at the actual cash flow, we look at the cash on cash return.
The other piece that we can take into account is the appreciation. If I hold this property over the life of the loan 30 years, is it reasonable to believe that this property is going to appreciate a significant amount over that timeframe? Some markets appreciate faster, some markets appreciate slower nationally post COVID. I think we’ve seen a lot of appreciation across most of the United States, but some markets do it faster than others. So I think those are really the two big things that most investors today. There’s also the tax benefits and maybe that’s an entirely different story, but I think based on how this person asked the question, they’re probably not too concerned with tax sheltering at this point. So cashflow, cash on cash return and equity growth or appreciation I think are the big things to focus on. Am I missing anything there?

Ashley:
No, and I just thought of this, and we don’t ever really talk about this as one of the pieces of a good deal, but also I would say regulation security as in there’s been towns near me where people have short-term rentals and all of a sudden the towns say, you know what? Unless this is your primary residence, you can’t do short-term rentals anymore. And all of a sudden people are like, what am I going to do with this house? I can’t rent it out. It doesn’t make enough money as a long-term rental. So I think it would be a good deal if you can actually do that strategy. So just another little aspect and there’s I think a lot of those little nuances we could probably do a whole episode on, but thinking a little outside the box too.

Tony:
Yeah, real estate nuances as our next episodes. If you guys want to see that, let us know. Let us know in the comments. Then I think that the next piece here too is just defining your buy box. And I think that’ll also help you identify whether or not what you’re looking at is a good deal for you specifically. And I’ll give you a recent example. When we were shopping for our first hotel, we had a very specific buy box. We had a buy box of, we wanted a purchase price between one and $3 million. We wanted a value add opportunity. We wanted to be in either an urban or a vacation market, and we wanted, I think there are 10 to 30 rooms. So those were all the things we were looking for. And once we had that buy box built out, it became significantly easier for us to say yes or no to certain deals because now it’s just like, does it match our buy box or does it not?
So I would encourage you to, and this is for everyone that’s listening, to think about building your own buy box and how that can make it easier to identify the right deal. And then just there’s some basic rules of thumb as well when it comes to buying rental properties that don’t necessarily give you the cold hard to the penny return, but directionally, I think they can kind of point you in the right direction. But there’s the 1% rule that says your revenue or your rent in this case should be 1% of the purchase price. So if I have a house that is $100,000, if I can rent that property out for $1,000 per month, that would be meeting the 1% rule. The other is the 50% rule where 50% of your revenue, or sorry, lemme say that again, then there’s a 50% rule that says your expenses shouldn’t exceed 50% of what that revenue is. So using that same example, if I’ve got a $1,000 a month in rent, my expenses hopefully shouldn’t exceed 500 bucks on that, right? So there’s different rules of thumb that you can use to help guide you in the right direction to quickly either say yes or say no to these deals aside from fully underwriting them.

Ashley:
And just to remember that a good deal doesn’t mean it has to be the greatest deal of all, or you have to get the best benefit. You have this money because we see a lot of times like I have $50,000. What’s the best way that I can use this money? Even if it doesn’t turn out to be the best way there Ended up you could have got a 2% more return or something doing something a little different or buying a different property. As long as it ends up being a good deal, it is going to make you so much more money because that first deal propels you it, you took action and it’s going to start your investing journey. So don’t get too caught up in analysis paralysis thinking you need to find the perfect deal.

Tony:
Ash. That is a great point. The last thing I’ll add to that is we need to give ourselves more permission to learn when it comes to real estate investing. And I’ve given the analogy of if you have a child or if there’s a child that you’ve ever met in your life, chances are that child did not come out of the womb walking. And there was at some point in their early life, somewhere between eight to 12 or maybe sometime shortly after months where they started to learn how to walk. And I haven’t met anyone yet, though I could be wrong, but I haven’t met anyone yet who at 12 months old when they fell down for the first time after walking, their parents just kind of scooped them up and said, you know what? Walking’s just not for you. Usually the kid falls down, parent picks them back up, and then they keep that process going until they finally find the strength to sound on their own.
And I think real estate investing, and really this is for learning anything new, it’s the same process. The goal is that we can lay a foundation with that first deals not to be perfect. And sometimes that means stumbling. Sometimes that means everything doesn’t go according to plan. Both in my portfolio and Ashley’s experienced that and many of the guests that we’ve interviewed on this podcast have experienced that as well. So if we give ourselves more permission to learn on that first deal, we can take off some of that pressure of it being perfect and position it as an opportunity to get better for the second deal and the fifth deal and the 10th deal

Ashley:
Coming up. When you’re tackling your first flip, should you really pay for a general contractor or is that just wasted money? We’ll break it down right after this quick word from our sponsors. Okay, welcome back. Today’s second question is, my partner and I have started a house flipping business and plan to use local workers whom we trust and who we have done remodels on investment properties for us before. However, these workers are not licensed, but they work hard and efficiently. Most of the rehabbing we are planning for these flips is cosmetic. The most recent house we offered needs a complete remodel inside, but the structure is sound. For example, we need new kitchen cabinet, sink paint, flooring and drywall in certain areas of the house that have been damaged as well as new light fixtures and interior and exterior paint. The work is mainly cosmetic except for the drywall repairs.
We are concerned about hard money lenders requiring licensed professionals to do the work or requiring licensing later on, having a scramble to find a general contractor. Fortunately, one of our hard money lenders said they will not ask to see any licensing as long as we are not doing anything structural to the house. Another one of our hard money lenders has stated that they want to see licensing anytime we were going to have any work done to pull permits. We are brand new to this, as you can tell. So the first thing that kind of stands out to me is the hard money lender that’s saying they’ll want to see any licensing when they pull permits. In my experience, I mean I live in very rural areas where a lot of my projects are like no permit or very get a permit this morning, start the roof that evening. But the flip I did last year was in more of a village within the city and there was a lot more stricter permit requirements, but I had to show, for example, the plumber was a licensed contractor just to get the permit on the property too. So I think that no matter what, depending on your city’s regulations, you might have to show that it’s somebody licensed doing the work like electrician and plumber. Two big things that usually you would have to show.

Tony:
And I also, if your lender is requiring that you have a GC to do it, then I mean that kind of answers the question for you, right? I wouldn’t tell my lender that ham, I’m going to use a licensed contractor and then I don’t because that could create its own world of issues. But I think maybe the bigger question here is why are you opposed to using the general contractor? Is it the idea of cost savings? Because if so, unless you’ve got a lot of experience managing these types of projects before because you didn’t say nothing, right? It wasn’t like you were just doing paint or you were adding some turf or replacing some hardware. We need new kitchen cabinets, sinks, paint, flooring, basically an entire new kitchen drywall where there’s been damage.
It does seem like a decent amount of work for someone who’s doing this for the first time. And even though you’re not changing the layout as a rookie investor, sometimes there is value in having an experienced general contractor guide you through on this first project and the amount of insights you can pick up and gain from that person, they’ll stick with you for the rest of your life. One of the first rehab projects that we did, we had a juicy walk through it. He ended up not taking the job because he was too busy, but I remember he gave us a layout suggestion we had never even thought about before. He was like, Hey, you should actually close this wall off that way we can make your master bedroom bigger and we can do this and do that. And we’re like, man, I walked right through this a thousand times. I never even thought of that. And he was in there for 20 minutes and was like, yeah, you need to do this, you need to do this, he needs to do this. So there’s value I think in just learning from a good general contractor, especially if this is your first time out, obviously you want to make sure that they earn their keep and hopefully a good GCL do that. But I dunno, I think there’s value Ashton and rookie investors when they’re first getting started having a good GC to lean on.

Ashley:
Yeah, two of my easiest projects, I had really great GCs that actually did a lot of the work themselves too. When I built my personal residence, my GC pretty much built the house himself. He was a licensed electrician, a licensed plumber. He was a jack of all trades. And if I could have him do every house that I ever touch, I would 100% consistently use him. No matter how much he paid, I’d work it into the numbers because that was just the easiest most passive thing I ever did was build that house. And he did one rehab for me for a house that was flipping. He came in after it became too much for just me and my partner to try to handle ourselves. And he came in and finished the whole thing with very little oversight. And that I think is just tremendously valuable.
Having somebody you don’t have to micromanage that can make basic decisions without ever having to bother you or tell you decisions you should be making in your point Tony, as to put a door here or something like that, that’s going to maximize your space. Or I had a GC that did put a slider door here, don’t, you’re limiting the bathroom by putting the same door back in. Do this and it will be cheaper and had all these great ideas. So I think a GC is worth it for the project, especially if you don’t have experience yourself. But also another thing they could do is they could go and one of them could get licensed to be a gc. I have no idea what the process is, but I’m assuming it’s achievable and doable to go and get your GC license.

Tony:
I think just one thing to call out, we’ve all heard the horror stories of general contractors or even just tradespeople in general disappearing into the middle of the night. So my strong recommendation, whether you hire a GC or a sub yourself, is to make sure that the payment structure protects you in the event that the work isn’t done correctly. So do not give them a super large deposit upfront, right? So say that the labor for this job, maybe the total bid for this house is like 60 grand. Don’t give them $30,000 upfront to go start their work. It does not cost that much to go buy whatever materials they need to go buy to get this job started, break it out into very clear milestones, and then only issue those payments once you validated that those milestones are done like demo. Once they finish demo, then you can release another payment.
Once they’ve done the rough plumbing and electrical, you can issue another payment. Once the flooring is in, you can do another one. So identify what those milestones are based on the scope of the job and that’ll save you in the event that these contractors don’t work out. We actually had a rehab once where we withheld the final payment because the general contractor just wasn’t great and we had a lot of issues throughout the life of the project and I ended up managing the subs myself because GC wasn’t doing a good job. So when it came time for the final payment, and Sarah, my wife still recall this, one of her crst moments with me, but we’re in the house arguing with each other and I’m like, dude, I’m not paying you. I’ve done more work on this project than you have. So anyway, you can save yourself, I think from some of those bad experiences if you make sure the payment structure is set up in a way that protects you.
Alright, we’re going to answer our final question right after we’re from today’s show sponsors while we’re gone. If you haven’t yet, be sure to subscribe to our channel on YouTube. You can find us at realestate Ricky. Alright guys, we’re back with our final question. So let’s see what we’ve got today. The third question comes from Grant in the BiggerPockets forums. And Grant says, is there ever a right time to buy a house? A lot of people around me keep saying, wait until the market crashes, because right now it’s high, but it always seems like it’s going to keep going up. So I know that there were times or moments when it goes down a little bit, but it’s always going to go up, isn’t it? This is a great question. And we just recently interviewed Thatin and James Dard about a topic very similar to this because they both invested through 2008.
Thatch was even investing in the nineties during the dot-com crash. Now, that impacted the markets, and I think they both echoed the same message. Ups and downs will always happen in real estate, but it’s the people who continue to invest through those downturns that make the most money when the market starts to swing back up. So is there a right time to invest in real estate? Yes. And that time is today, right? Very simple answer. There is a right time, and it’s right, actually it’s yesterday. Yesterday was the best time to invest in real estate and today’s the second best day. I think where people get into trouble is trying to time the market, but no one has a crystal ball. No one has a crystal ball. And I would venture to say, grant, that the majority of the people who are telling you to wait for the market to come down or wait for the market to crash, probably haven’t invested in a lot of real estate themselves because I only hear that advice from people who haven’t done it.
And I almost never hear that advice from people who are doing this actively every single day as their main way of making a living. So we’ve got to be able to filter out the advice that we get from very well-intentioned friends and family and be able to say, Hey, look, I appreciate that you’re looking out for me, but I’ve got to take advice on wealth building from the people who’ve actually done it and not necessarily from my friends and family who have only seen the headlines or maybe heard stories from a friend of a friend of a friend about why real estate investing is the wrong thing to do. So it’s all about time in the market, not timing the market.

Ashley:
And one thing that thatch and James said too was making sure you have exit strategies as in, especially if you’re doing a long-term play on a property, you can ride out the cycles, get that 30 year fixed rate loan, your mortgage payment is going to stay steady and you can hold that property long term and let it appreciate and your mortgage pay down happen. But if you’re on a shorter term project such as you’re doing a flip, what is your exit strategy to get out of that deal? If the market does take a big downturn, right? When you list it, is it, can you turn it into a rental? Can you furnish it, turn it into a short-term rental? If you unload it, how much of a loss can you actually take? And they both told how they’ve had bad years, they’ve taken losses, but they keep going because the winds during the great years outweigh those bad years.
So you have to be prepared to ride the rollercoaster and be in this for the long term. For the long play. This really isn’t a get rich quick scheme. Yeah, maybe a couple years ago you could get rich real quick off of a couple deals, but that was not sustainable. You can’t consistently do that every single year and make those great returns that everyone talks about a couple years ago with your 2% interest rate. So having those exit strategies and also having a long-term game plan and growing consistently, but not growing and scaling too fast too. Well, thank you guys so much for listening to this episode of Ricky Reply. I’m Ashley Hughes, Tony, and we’ll see you guys on the next episode.

This article is presented by RentRedi.

There’s a big difference between working in and on your business. When you bought your first rental property, doing everything yourself probably felt right. You knew the tenants, collected rent, patched the drywall, and scheduled the pest control. 

Being a self-managing landlord is no joke, and it’s definitely not for everyone. If you’re constantly texting tenants, manually tracking rent payments, and spending your weekends fixing leaky toilets, you start feeling like you’re being spread too thin.

Instead of growing your cash flow, you might be just trying to survive the week. If you’re losing sleep, time with your loved ones, or even struggling to keep up with repairs, that’s when it’s time to fire yourself. But don’t worry, you’re still the boss—only instead of doing the work yourself, you can adopt smarter systems and workflows that make it simple for you to scale confidently and successfully. Here’s how to get a complete overview of your business and develop deeper insights that you can focus on growing your portfolio.

Are You Working Smarter or Harder?

Working smarter on your business means building systems, automating tasks, and making decisions that allow you to grow. It means treating your rental portfolio like a company, rather than a never-ending to-do list. Too many landlords get stuck doing everything themselves—and wonder why their growth plateaus.

The truth is, you simply can’t scale chaos. But you can scale success. 

Your Growth Will Only Go as Far as Your Systems

Every successful real estate investor eventually realizes that growth requires some type of infrastructure. 

You wouldn’t try to build a house without a foundation. So why are you managing a five-, 10-, or 20-unit portfolio with a stack of receipts, a personal Gmail account, and a dozen spreadsheets? This system may have worked for you initially, but it is also difficult to manage long-term. For a more sustainable process, pulling all your investment properties and organizing them into one system will save you so much time and stress. You might not even realize how much inherent stress you’ve been feeling until the sigh of relief when you see your entire rental operation organized in a smart system designed to simplify your property management workload. 

A strong, scalable system should allow you to:

• Accept rent online and track payments in real time
• Automate late fees and rent reminders.
• Screen tenants consistently, with applications and background checks.
• Log and organize maintenance requests, with status updates and photos.
• Keep digital copies of leases, inspections, and notices.
• Collaborate with your team or contractors securely and efficiently.

These key systems are must-haves for anyone who wants to grow beyond just being a landlord and for folks who want to work on their business.

How Property Management Systems Work For You

Hiring a third-party property manager can cost 8% to 12% of your gross rent, and there may be additional costs for leasing or repairs. This can be a worthwhile investment to alleviate your workload, but setting up a property management software that can organize your business and articulate rental data back to you is an essential tool for scalability and cash flow growth. 

Using a smart property management software like RentRedi gives you the power of a professional system without the overhead of outsourcing everything. You can:

• Log in to one dashboard to see how your portfolio is performing.
• Get alerts when rent is paid or late.
• Generate reports for tax time.
• Store all your documents and communication in one place.
• Let tenants submit requests without calling your personal phone.
• Stay organized without hiring a team.

A manual system can impede your growth as a real estate investor. Not only is it taxing on your time, but your energy as well. Imagine if you could reallocate the investment of your resources…back into investing? That’s working smarter, not harder.

The Hidden Costs of DIY Landlording

Let’s talk about what you’re actually losing when you try to do it all yourself.

1. Time

Every minute spent on administrative tasks is one you’re not underwriting new deals, building relationships with brokers, or thinking strategically about your business.

2. Tenant satisfaction

Delayed responses, inconsistent communication, and poor maintenance follow-up make tenants unhappy. That could mean more turnover and longer vacancy periods.

3. Financial accuracy

If you’re not tracking expenses properly or logging deductions, you’re leaving money on the table every year at tax time.

4. Burnout

This is real. The back-and-forth phone calls, a mountain of maintenance tasks, and overlooking late or missed payments all add up. For you and your business. A primary reason for utilizing real estate investing to achieve financial freedom is to generate revenue without strain on your finances, time, and wellness. So if your future is looking forward to financial freedom, finding sustainable, customizable, automated workflows is #1 on your priority list.

How I Knew It Was Time to Fire Myself

There was a point in my journey where I looked around and realized my portfolio was growing—and with it, my workload. 

I had more properties, tenants, and rent coming in. This was exciting, but I was more stressed than ever. I wasn’t spending my time doing the things that mattered. I was putting out fires, logging into my bank account to check if rent came in, and calling vendors to schedule minor repairs. Basically, I was babysitting my business instead of scaling it thoughtfully.

Making the decision to implement systems like automated rent collection, streamlined maintenance, and consistent tenant screening with software like RentRedi had several benefits beyond saving time. This was a turning point in my investor journey, as I finally had the breathing room to grow.

How to Know It’s Time

Here are a few signs you’ve outgrown the DIY property management stage:

• You’re managing more than two properties.
• You’re repeating the same tasks every month.
• You spend more time being reactive than proactive.
• You can’t remember which tenant has a pet, or whose lease is up next.
• You feel overwhelmed during tax season.
• You dread tenant calls or emails because you’re already behind.

If any of that sounds familiar, you’re not alone—and you’re not failing. You’ve just hit the ceiling of what can be done manually. Now it’s time to build the business.

Owning the Role of CEO

Stepping into the role of CEO means you recognize not only the worth and value of your rental business as a cash flow, but also your time as well. Each property has the potential to bring you one step closer to a future that feels more like freedom. Adapting smart property management systems like RentRedi saved my sanity, my time, my energy, and my resources. So if your goal is to grow financial sustainability, own your role as a business owner. 

The most successful investors are those who learn how to delegate, automate, and systemize their portfolio. Firing yourself doesn’t mean you stop caring about your tenants or the properties you’ve invested in. It means you’re ready to build a business with smart systems in place that not only help you streamline what you already have, and scale to something bigger.

For the last few years, the narrative about the U.S. real estate market has been that homeowners are not moving. They are rate-locked and staying put. 

That is no longer the case. The latest numbers from a Realtor.com analysis reveal that Americans are, in fact, moving in large numbers, possibly upending the playbook for real estate investors. 

More homes mean more moves, and that is especially true in the Sunbelt, where the U.S. metros with the highest listing activity are in Texas, including Dallas, San Antonio, Austin, and Houston.

The full list of metros with the highest turnover between September 2024 and August 2025 is:

1. Kansas City, Missouri
2. San Antonio, Texas
3. Indianapolis, Indiana
4. Las Vegas, Nevada
5. Dallas, Texas
6. Nashville, Tennessee
7. Austin, Texas
8. Charlotte, North Carolina
9. Houston, Texas
10. St. Louis, Missouri

While each city has its own unique circumstances, certain patterns have emerged, particularly regarding the Texas metros. This aligns with the outlet’s November housing report, which shows that Southern markets are close to their pre-pandemic norms. The increase in inventory has led to greater buyer choice. 

Reasons for Moving

Unlike the popular post-pandemic narrative, life issues such as retirement, job relocation, downsizing, and equity appreciation have overcome fears of being rate-locked. In many cases, where the equity is significant enough, forgoing a low interest rate has been a non-issue.

“People in San Antonio are monetizing appreciation and resetting life logistics, not panic selling,” Daniel Cabrera, owner and founder of Sell My House Fast SA TX, told Realtor.com. “They are selling to repay debts, relocate for their relatives, and escape the commute for more space.”

Downsizing is also playing a part, according to the report, which, coupled with rising insurance costs, means that in many instances, it’s cheaper to rent than to live in a large house that also needs maintenance.

Former Growth Markets Are Now Negotiation Markets

An increase in supply has helped lower prices and encouraged more people to move.

“For buyers, there are deals to be made,” Jason Gale, a Redfin Premier agent in New Orleans, told Real Estate News in October. “People who need to move are still out there house hunting, and they’re finding that it’s a good time to negotiate with sellers, especially for homes that have been on the market for longer than a few weeks. Most buyers are able to get a discount on the price or significant help with their closing costs.”

More Inventory Has Led to More Options

According to the National Association of Realtors (NAR), existing-home sales increased 1.2% in October, with month-over-month sales up specifically in the Midwest and South.

NAR chief economist Lawrence Yun said:

“Home sales increased in October even with the government shutdown due to homebuyers taking advantage of lower mortgage rates. First-time homebuyers are facing headwinds in the Northeast due to a lack of supply, and in the West because of high home prices. First-time buyers fared better in the Midwest because of the plentiful supply of affordable houses, and in the South because there is sufficient inventory.”

Specifically in the South, sales are up 2.8% year over year, with the median price up 0.3% from the same time last year.

Slower Price Growth Equals More Buyer Power

Rampant post-pandemic price growth, coupled with low inventory, froze the housing market, which appears to have thawed. Although sales have hardly been remarkable, stability is often an investor’s friend. In October, just 14 of the 50 most populous U.S. metros saw price drops, according to Redfin data, down from 37 metros dropping prices in July.

“Many would-be homebuyers and sellers are paralyzed by high prices and economic uncertainty,” said Redfin senior economist Asad Khan in a press release. “Homebuying activity has stabilized at below-normal levels, and while selling activity has also slowed, there are still a lot more sellers in the market than buyers. That’s allowing the people who are moving ahead with home purchases to score discounts and other concessions from sellers.”

Redfin’s report estimates there are about 500,000 more home sellers than buyers in the market as of mid-November, tilting the market toward buyer discounts.

Smaller and Midwestern/Northeastern Metros Gaining Ground

As supply and demand dynamics shift, some smaller or midsized metros in the Midwest and Northeast are increasingly attracting buyers and investors, according to Realtor.com’s findings. Modest prices and stable demand are making them more attractive than overheated metros.

These so-called “refuge markets” include:

• Grand Rapids, Michigan 
• St. Louis, Missouri
• Cleveland, Ohio
• Milwaukee, Wisconsin
• Pittsburgh, Pennsylvania

Additionally, 11 of the outlet’s hottest 25 markets identified in an October report were located in the Midwest, with six in Wisconsin, four in Illinois, and one in Ohio.

“Wisconsin, Ohio, and Illinois continue to stand out as affordable housing markets with strong local economies, drawing home shoppers who are seeking both opportunity and value,” Hannah Jones, senior economic research analyst at Realtor.com, said. “Markets where home prices sit below the national median, or below those of nearby major metros, have gained notable traction in recent years as affordability constraints weigh heavily on buyer demand.”

Listings in these markets sold 27 days faster on average than typical U.S. listings in October.

Final Thoughts: Strategic Moves for Investors in a Changing Market

Rather than a dramatic sea change, the current real estate market suggests a subtle shift in dynamics—more of a pat than a punch. 

Consequently, investors don’t suddenly need to adopt risky strategies to free up cash; they should be liquid, nimble, and able to respond to greater market fluidity. When people move, opportunities arise, and for the first time in a while, people are moving. 

Here are some levelheaded moves investors should make as the market changes course:

• Underwrite based on flat or modest price growth (instead of optimistic appreciation). Focus on long-term stability rather than short-term price swings.
• Negotiate seller credits or other concessions to improve cash flow or financing.
• Avoid thin-margin flips or BRRRRs. It’s not worth the risk.
• Target workforce housing. As back-to-office mandates come into effect, people will need to live closer to larger cities in supply-constrained neighborhoods.

The current real estate market is like a long-distance race: liable to change with fluctuating interest rates, inventory, and other economic factors. Placing yourself away from the pack, near the front, ready to make a move, is always a good strategy.

Foreclosure auctions rose while buyer demand and pricing cooled in Q3 2025. Below, we’ll take a look at six key charts and buyer quotes to get a sense of today’s foreclosure market, what’s going on at auction, and extra tidbits to help guide your next bid.

Foreclosure auction volume increased while pricing softened in Q3 2025, according to the latest Auction Market Dispatch, published by Auction.com. That combo is creating more chances to buy—if you underwrite conservatively and stay selective. Here are six must-see charts and auction buyer insights.

What Changed For Investors This Quarter?

Distressed supply continued to climb, led by foreclosure completions and scheduled auctions, while demand metrics (sales rates and bidders per asset) cooled. Investors report shifting to lower bids and longer hold timelines as costs and uncertainty rise.

“The primary concern is the growing number of houses for sale … This creates a buyers’ market; therefore, you can expect to sell a property for less than you would have a year ago.” — Arkansas buyer

Takeaway

More foreclosure inventory with more conservative bidding favors disciplined offers.

Where Demand Cooled—and Why That Helps Disciplined Buyers

Sales-rate pressure and fewer bidders per asset mean less competition at the margin. Many buyers cite falling prices and policy uncertainty, so they’re trimming offers to protect their margin.

“Overall, expectation [is that] housing prices are falling and will continue to fall.” — Indiana buyer

Takeaway

If you keep comps current and cap rehab risk, you can win without overpaying.

What Buyers Actually Paid vs. Value (by Market)

Price-to-after-repair value (ARV) ratios moved lower in several metros, reflecting tighter underwriting and higher perceived risk. That creates pockets where spreads are opening for buy-and-hold and value-add investors.

“I am buying more to hold and rent than I was before (when) I was buying to flip and sell.” — Minnesota buyer

Takeaway

Favor metros where price-to-ARV is trending down and rents still pencil.

Where Supply Is Building (by State)

Foreclosure auction volume rose across several large states. A bigger pipeline means more looks each week and less pressure to chase borderline deals.

Takeaway

Work statewide lists; set saved searches for areas showing the biggest year-over-year gains.

Vacant REO Is Back in Play—Why Occupancy Status Matters

The number of vacant REO auctions is at a multiyear high. Investors often prefer vacant assets to avoid eviction delays and carrying costs. And vacant REOs represent a largely untapped affordable housing opportunity for owner-occupant buyers.

“Occupied versus vacant properties is a big one for me… It’s been extremely hard…to evict.” — California buyer

Takeaway

Prioritize vacant REOs when speed to possession matters; price occupancy risk in.

Bid-Ask Spread Rises at Foreclosure Auctions

Seller “ask” moved down, but buyers also pushed bids lower, keeping a noticeable spread. That’s a sign to keep offers tight, not chase.

“[I’m] bidding lower prices to hedge for declining prices and climbing inventories.” — Texas buyer

Takeaway

Use your max-offer formula (ARV × target discount – rehab – fees – margin), and stick to it.

Auction Market Dispatch FAQ

What is price demand?

It’s the winning bid as a percent of after-repair value (ARV). Lower = bigger gross discount.

Is it still worth bidding right now?

Yes—rising supply plus cooler demand creates opportunities, especially for buy-and-hold investors. The key is conservative underwriting and solid rehab plans.

Flip or rent?

With spreads tighter and rates elevated, some investors are leaning toward rent-and-hold to let time de-risk the trade.

Dave:
True or false, you need to quit your day job to scale a real estate portfolio. A lot of people will tell you that you have to quit your job and go all in on real estate if you want to reach financial freedom, but I’m telling you that’s wrong. I believe it’s not just possible to invest in real estate with a day job, but keeping your W2 is maybe the secret to building a portfolio as fast as possible. Hey, what’s up everyone? I’m Dave Meyer. I’m the host of this podcast plus the head of real estate investing at BiggerPockets. That’s my day job. I’ve been working here at BiggerPockets for almost 10 years, even though I’ve been investing in real estate for even longer and I’ve kept my job even as I’ve grown a real estate portfolio because I believe that’s the best path to building wealth.
This can be a contrarian opinion in the real estate space. So today I’m going to break down why I think having a nine to five can make you a better investor over the long term and to help me do that on the show today is Paul Novak. Paul is an investor with a full-time job from Sheboygan, Wisconsin, and you could hear his full story from his previous appearance on the show. Episode 1123 from May 19th. Paul and I are going to talk about the hidden benefits of keeping a W2 job while investing some of the under-discussed downsides of going all in on real estate and even share a few tricks like 401k loans that are only available to people with full-time jobs. Let’s bring on Paul. Paul, welcome back to the BiggerPockets podcast. Thanks for being here again.

Paul:
Yeah, super excited to be on.

Dave:
You have been on before we talked a lot about your investing journey. Today we’re going to talk more about the decision you’ve made to stay as a W2 employee because I think this is a huge decision for most people. But before we get into that, maybe for people who didn’t catch your first episode, just give us a quick background, who you are, how you’re involved in the real estate investing world.

Paul:
Yeah, my name’s Paul Novak, live in Sheboygan, Wisconsin. Kind of how I got started is got introduced to fire, really started off by paying off a lot of debt. Once the debt got paid off, it was like okay, we were kind of in that habit of all of our money’s going to debt, there’s no debt left time to start investing, pivoted into stocks and started doing that and really just wasn’t seeing the returns on the dividends that I was hoping in the beginning. And during COVID, I got introduced to real estate through reading books, watching BiggerPockets, and when I was looking at the returns that we were getting in cashflow from the money that we had invested in real estate, it was kind of a no brainer. So we jumped in then around COVID and really we haven’t stopped. We’ve just continued with real estate.

Dave:
And what does your portfolio look like today?

Paul:
Yeah, so today we’re up to six properties, eight doors. We’ve got two multifamily, small multifamily duplexes, and the rest are single family homes.

Dave:
So you’ve been doing this for a couple of years, you got six properties, could you retire if you wanted to leave your W2 job? Is that an option for you at this point?

Paul:
Yeah, I don’t think it’s an option yet. I mean maybe if we lived a very minimalistic lifestyle, but we’ve got to keep going in order to hit our goals and get to where we want to

Dave:
Be. And what are your goals?

Paul:
Yeah, so I think for us we want to get to about 11,000 a month in cashflow coming off the rentals. And if I look at what we have with the six properties, we could get to that goal I think with just regular rent increases over the next couple of years if we paid off the portfolio. So we’re kind of pivoting right now in our strategy from just acquisition mode into kind of paying off some of that debt to increase the cashflow.

Dave:
You have decided, from what I understand to keep working at your W2 and I’m curious first maybe just tell us a little bit about what you do for work and why you’re taking that approach instead of going all in full-time real estate investor.

Paul:
So what I do, I’ve been at my employer for 20 years, customer satisfaction manager for a local manufacturing company. And honestly, my wife too has been at her career now for seven years before she worked where I did for 13. It provides us a lot of stability and the other thing is I don’t think there’s any way around it. If you want to be in this real estate game, you have to have money coming in. So what that would do if we didn’t work our W twos, it would significantly stunt our abilities to grow, our abilities to pay off these properties. So I think it really lowers the stress level for where we’re going. And our game plan isn’t to live off the cashflow now anyways, so whether we’re buying new properties or paying properties off, I still look at we’re in the growth phase and having that additional income. I mean that makes a big difference for us scaling.

Dave:
I want to reiterate and stress what Paul just said, that in order to grow a portfolio you need cash coming in. This is just the reality. Real estate is a capital intensive business. You can’t just go out and start with a couple of bucks and even if you start with a decent amount of money after you acquire a couple of properties, you’re going to run out. And although some people dream of taking the cashflow from their first couple of rentals and using that to reinvest into new rentals, it takes a long time. The math of that is not the best. If you’re making a couple hundred bucks every month off of a rental property, it could take years between acquisitions, which is why for pretty much every person in their first, I don’t know, five or 10 years of investing, you got to focus on how to bring in income. Now, there are different ways to do that, Paul, right. Curious, did you ever consider bringing in money through real estate? Because a common option that people in the BP community pursue is maybe they become a flipper. That’s a way that you can generate income or you become a real estate agent or you become a property manager. Has it ever appealed to you to get your active income from a real estate type job?

Paul:
So let’s say hypothetically that our household income from our W twos is 200,000 a year using a hypothetical number, if I jumped in and became a real estate agent, I’m not going to start off with the same level of income I’m at today. And I do think that I’ve got the personality, I’ve got the mentality with us being in real estate and liking it. I think I could get back to that, but I don’t know if I want to take those two or three years to catch back up to where I’m already at.

Dave:
Yeah, that makes sense to me. I mean, you’ve put in, you said 20 years into this career, even if you’re good at it, going into a new career, you’re going to take a pay cut in almost every single instance. And there’s a learning curve too, I would imagine, where you’re going to have to spend a lot of time getting good at that where I don’t know the details of your existing job. I’m sure you work hard, but you know what you’re doing. You understand that industry, you probably very good at it already, and so you don’t have to invest that extra mental energy and you could probably use that mental energy to invest into your real estate portfolio. You’re not trying to learn a new scale of being a real estate agent.

Paul:
Yeah, I agree with that a hundred percent. And with us doing, we do everything ourselves, and I like that we do our own bookkeeping because we’ve only got eight doors. We manage all of our own properties. So there is time. I mean, just the other week, small thing, but we had a slow leaking faucet that we had to go replace at one of the rentals. So my wife and I go over there, it took us maybe two hours to rip the old one out, put the new one in. But all of those things that cuts into time. So if you’re trying to learn a new skill in a new industry and then also layer on those things, it just adds complications with two small kids at home that we haven’t wanted to take on right now. Making that pivot.

Dave:
People ask this question a lot. I think it’s a really good question for real estate investors to ask themselves, should I stay in the job that I like or should I consider making active income through real estate? Because as Paul said, you have to have that active income to be able to get passive income in the long run. You need to have money coming in. The way I think about it, Paul, I’m curious your opinion. The way I’ve thought about it in the past is you have to look at two different dimensions. One is, do you like it because certain people maybe they don’t even earn that much, but they just love their job. There are people who are super passionate about it, they’re just very connected to their work. And if you’re in that, honestly, that’s a gift. Not a lot of people have that.
And so if you do that, I would stay with that job. The other thing though, I think is where it gets a little bit trickier is where people who don’t like their jobs are thinking, should I just grind it out in my existing career or do I make the switch? Because not only could I potentially make the same amount or maybe even more money, but then I get more personal fulfillment out of that. I think that’s what a lot of people are attracted to is they just find real estate fun. I do. I think it sounds like you do too. And so I’m curious if you think about that in a similar way or how you would counsel our audience if they’re facing a similar question.

Paul:
The other thing that I’d look at is how old are you and where are you in life? If I would’ve learned all this being honest with you at a very young age when I started at my company, even though I liked my company and everything about it, the risk wasn’t as high to pivot into something else because my income wasn’t as high. The benefits weren’t there. I didn’t have the kids and other people relying on us. So I think two other things that I just add to what you said is understanding what your goals are, and I think they’ll change over time, but trying to find a way to define what is enough, where is my end point? I think if you know what that is, it’s easier to make that decision. And like I said, I know that’s going to change as you get into it and learn more about the business. Those goals will change with time, but I think that’s a big one. And then just where you are in life and how much risk you’re willing to take on from a employment standpoint.

Dave:
Alright, guys, we got to take a quick break, but Paul and I will be back right after this break. So I found this thing called the Lennar Investor Marketplace, and honestly, it’s kind of genius. It’s built by Lennar who is one of the top home builders in the country, and they have this new platform built for investors who want turnkey new construction homes. These are professionally built pres inspected and rent ready. From day one, you can browse properties across more than 90 markets. You can see verified rental comps, neighborhood data, and even handle financing, title and insurance all through NARS in-house network. It’s everything you need to make data-driven investment decisions in one place. Go to biggerpockets.com/nar and explore the homes available right now.
Welcome back to the BiggerPockets podcast. I’m back with investor Paul Novak talking about the benefits and trade-offs of working a W2 job. I think the benefits to going into real estate investing full-time are pretty apparent to people. You have some level of independence. Most of these jobs are independent. If you’re an agent, you work a lot, but you have a little bit of control over your schedule, you can hopefully master that skill, make a lot of money, same things if you become a loan officer or whatever. And I think the benefit that a lot of real estate investors look at and say, I can learn the industry super well, and that’s true if you become an agent, you are going to accelerate your learning, your ability to underwrite deals, your deal flow, you’re going to be able to network in a way that most W2 employees can’t do it. Those are real benefits, but I think the benefits of staying in a W2 job are less known or less talked about. So can we talk about some of those things?

Paul:
Yeah, so I guess some of the stuff that I look at is from a positive standpoint is you have that reliable income. And one thing that I’ve learned in doing this is when you’re going to the bank trying to get mortgages to continue to scale, they like reliable income.
So I’ve even reached out to some people and talking about paying off my portfolio on the BiggerPockets forums, and some people have said, Hey, the cashflow is great. All the tax advantages on my cashflow with depreciation and all that stuff are great, but now on paper, my income is so low that I’m really struggling to continue to scale to buy my next property, not as lendable to the bank. So even though my money looks good, my situation, a lot of it’s just deferred through taxes and I’m not showing that I’m making that much money. So I think that’s something that people need to keep in the back of their mind. It’s not just having the money. Most people when they scale aren’t going to buy all these properties in cash. You’re trying to use leverage when you’re scaling. So the reliable income part is a big, I think win. And I also think for me, another big benefit through working how I’m able to manage all these properties and run a real estate business given it’s small, all those skills I built up through work,
Understanding KPIs, drafting work instructions, having tough conversations with people, project management. I think people, if you’re going to do this business, it’s not just buying a house and I collect a rent check. You want to make sure that you’re upkeeping the properties and taking care of the tenants and handling things in a professional manner. I couldn’t have done that at 18 years old, and I think maybe I could have learned some of that from the real estate business too, but I feel like specifically supervision and leadership and manufacturing has really set me up to be able to do a lot of those things.

Dave:
That’s a great point. I haven’t really thought of it that way because when I started and I bought my first property, I was 22 and I was terrible at running my business. It was just so bad and I’ve gotten so much better and I’ve often credited that to just being a real estate investor longer. But I think you’re right that at least half, maybe even more of me being a better real estate investor is that I’ve worked in a career, I’ve worked in an office, I’ve had employees that I manage. I’ve had different bosses who manage me, and you learn to deal with different personalities. You learn new software, you learn new skills, you are constantly learning and performing and challenging yourself, and those are really valuable skills as a real estate investor, even though it doesn’t seem so obvious. What I do day to day outside of hosting this podcast at BiggerPockets is more like a traditional corporate job, but the stuff you learn in a corporate job is actually applicable to real estate.

Paul:
Another thing that just kind of popped into my head is having the cash flow. So I think a lot of people, they think about, oh, I run the numbers on a deal and while you’re running the numbers, everything is linear. Even if you factor in capital expenditures and all those things, you’re assuming a certain percentage each month, which means you are going to get this cashflow and make money every single month. It doesn’t work that way when the hot water heater goes out and it’s 1500 bucks, it’s not, well, here’s one 12 of what the hot water heater’s going to cost, and the rest of it you’ll pay over time. Like no, these expenses hit you when they hit you. And I think now that we’ve scaled up to having the eight doors, all that really happens is instead of your cashflow being 5,000 a month, maybe it’s 2000 a month, and it’s like, well, I wish it was higher, but it’s kind of an inconvenience.
If you have one property and something breaks, you’re going to feel that. And if you don’t have a job, you are really going to feel that. And I’m only talking about stuff breaking. You’ll have vacancy in there. Well, if you only have a single family home and you don’t have a multifamily, it’s one door and that’s your only property. I’m still telling you get in. It’s a good thing to do, but you’re going to feel that if you don’t have the job. And I think having cash reserves is good. I’m probably not the best person to speak of there because I don’t have a lot of cash reserves for the rentals, but that’s because our savings rate’s so high from everything in the W2 that if anything happens, we can cover it. It’s more of an inconvenience than this is going to break us and we have to sell.

Dave:
That’s a very good way of thinking of it, and it makes a lot of sense. I feel as someone who also works at W2 job, a lot of calm, it’s honestly just a mental thing that I want cashflow, I’ll take it all day, but I don’t need it. I don’t live off of it. I live off of my income from BiggerPockets and then some. I don’t spend all of that either. And so this is an amazing benefit as a real estate investor, and I’ll just give you two examples that I’m going through right now. My best cashflowing property, it throws off 20 $503,000 in cashflow a month. It’s amazing. And I’ve had repairs so bad over the last one month that it’s going to eat all of that cashflow for a year. So I have 20 grand in reserves on that property. I’m facing costs of 50, $60,000, but this amazing property, I want to hold onto it, I’m going to keep it forever.
I actually had to come out of pocket and spend about five grand on that property just because this was more than even my cash reserves, which was 20 grand, which was a lot. And honestly, it’s frustrating. It’s annoying, but like you said, it’s not breaking me because this isn’t the income I need every month. And then I could just sort of mentally categorize this not as like, oh, my investment’s not doing well, or I am upset about this cash, and I’m like, oh, business expense. This is a business expense. I’m reinvesting into my property. It’s not really impacting me on a day-to-day basis, and I just only get that because I have a W2 job and live within the means of that W2 job. Another example is I have another property that tenant just moved out and I want to do a renovation and it’s going to take two or three months and I’m not going to have the income from the property for two or three months and it’s fine.
That’s another just example. I’m able to invest in my property. I’m able to make the upgrades that the property needs that will generate me more rent in the long run because I don’t need, it’s going to be probably 4,500 bucks, maybe more in vacancy costs, but that’s worth it to me. I can do the math and plot that out, but if you’re relying on that income too early in your investing career, that’s where you can really get in trouble. So I think what Paul’s saying about this consistency and income actually gives you a tremendous amount of flexibility and peace of mind as a real estate investor that I personally find very valuable,

Paul:
And I don’t know how to quantify this, but I’ve got some other friends that are in the game too doing real estate and they are very hungry for cashflow. They’re more reliant upon the money. And honestly, some of the repairs and upgrades that they do, they’re just lower in quality because, Hey, why buy the better faucet when I could get one that works for cheaper? You start nickel and dimming some of those things just because you don’t have the cash or you’re focused on that. And I will tell you, and I think they would tell you too, the quality of tenants that I have and the amount of people that stay in my properties versus they turnover is night and day different. Now, how to put an exact dollar figure on that, I don’t know. But again, it’s like you said, if you’re not relying on that money, you can stick better things in because you’re not just focused on that cashflow. And I do think one of the biggest things in this is having good tenants, having somebody that’s going to partner up, that’s going to take care of your property, that’s going to pay every month. And when you can get that, that makes this whole thing so much easier to do.

Dave:
I’ve actually talked about this with my property manager too. He said to me at first, he was emailing me, I hired a new property manager in the Midwest. He’s emailing me, he’s like, oh, do you want to put in this faucet or this faucet or we’re going to redo the floors. Should we do this one? It’s the cheapest one and the next one, I’m like, dude, you don’t need to ask me these $200 questions. It’s like, buy something that’s going to be really good quality and it’s going to last forever. And he was like, most people don’t think like that. They want to maximize. They beat ’em up. The property manager about spending $400 in repairs. For me, because I have a job that I plan to keep working in for another decade, I think about my investments on that 10 year time horizon. I’m not like, oh, am I going to get 200 bucks this month?
It doesn’t matter to me. I’m like, how do I make this house rock solid so that when I stop working, I’m not going to be hit with a bunch of repairs because I put in the right flooring, I bought the right appliances, I did the rewiring of the electrical the right way, I did the replumbing the right way, and so that this is going to last me to 20 years, 30 years instead of just until the next thing breaks, and then I just slap some cheap thing on it. Again, I think it just allows you to sort of take a different mindset.

Paul:
Yeah, we want to be known in the community. I want to get, I’m not going to say that we have the highest rents,
But I want to be able to get decent rents and pass along rent increases. And I think being known as a landlord in the area that goes above and beyond helps. One very quick example, I’ve got a set of tenants now, we haven’t owned it for that long, but they’ve lived in this unit for 17 years. Wow. Oh my God. Their fridge went out. I told them they don’t plan to leave. I don’t want ’em to leave. But we also passed along rent increases. I said, go to Home Depot. Pick whatever fridge you want within reason, right? I’m not buying, not

Dave:
The one with the TV screen. Yeah, that’s it. Yeah,

Paul:
Just go pick whatever you want and then we’ll go buy it. And they’re like, oh, if we could get curtains, these are kind of dated. Okay, go to the store. Don’t even look at the price tag. Pick whatever curtains you want from Menards and then we’ll come over and put that stuff up. So doing little things like that, higher end things, and to be honest with you, what they’re picking, it’s not like it’s super high end, but

Speaker 3:
Then

Paul:
They talk to other people and write that word spreads and we’ve got openings. It makes it a lot easier for us to fill.

Dave:
It’s so funny, I’ve done that in the past, not with a fridge, but yes, people are like, oh, the blinds are broken, whatever. I’m like, pick what you want. Not because I’m asking ’em to do the work, but it allows people to feel like it’s their home. They get a sense of ownership of it. And again, might it cost $50 more? Yes, it probably will, but that’s going to prevent a vacancy, which is going to save you way more than 50 bucks. It’s that kind of mindset. And I don’t mean to say by the way that people who work full-time in real estate can’t do this also,
But W2 jobs are inherently, I think a little bit more predictable than even being a real estate agent. Even if you’re experienced agent, I have many friends who are very, very successful agents. Some months they sell four houses, some months they sell no houses. There is some element of predictability that personally I like. I do want to go back to something you said earlier though, Paul, about lending because I think that is something that a lot of folks might not know, but being a real estate agent or sometimes a loan officer, I think it depends. You’re often a 10 99 contractor and for whatever, frankly, I think dumb reasons, the rules exist in lending in the United States. It is way easier to get a loan when you have a W2 job than when you are a contractor. Again, I think that’s pretty dumb. I don’t really understand why that is, but it does matter a lot.
And if you are trying to scale a portfolio, conventional mortgages are the cheapest way to do it, and it’s way easier to get conventional mortgages if you have a W2 income. Just to recap here, some of the benefits that Paul and I have talked about for having and maintaining a W2 job is just having cashflow on a basis that allows you to take more risks. It allows you to weather unexpected repairs or vacancies. We talked about lability and being able to get loans a little bit easier from a W2 job. And also just allowing yourself sort of the mindset to think long term when you don’t need the cashflow immediately, that can be really beneficial too. But of course there are trade-offs like everything. I’m not saying everyone should be a W2 employee. There are definitely some downsides to it and we’re going to cover that right after this quick break.
The Cashflow Roadshow is back. BiggerPockets is coming to Texas, January 13th to 17th, 2026. Me, Henry Washington and Garrett Brown will be hosting real estate investor meetups in Houston in Austin and Dallas along with a couple other special guests. And we’re also going to have a live small group workshop to answer your exact investing questions and help you plan your 2026 roadmap. Me, Henry and Garrett are going to be there giving you input directly on your strategy for 2026. It’s going to be great. Get all the details and reserve your tickets now at biggerpockets.com/texas. Hope to see you there. Welcome back to the BiggerPockets podcast. I’m here with investor Paul Novak talking about why he’s decided to stay with a W2 job before the break. We talked about all the fun stuff, all the good benefits of staying with a W2 job, but Paul, do you ever get jealous of people working full, full-time in real estate or what do you see the trade-offs being as staying in a W2 job?

Paul:
Well, I’ll say yes, right, just because I’m so into real estate. I think if I could have got into that earlier on, that would’ve been exciting. As far as trade-offs go, my wife and I are lucky, but you need to have jobs with a lot of flexibility. So now I look at, when we got started was like 2021 and the first, I’d say couple houses, we bought ’em on the MLS. We weren’t doing off market deals for the most part, when that house hit the MLS, you better be ready to get into it that day and have an offer ready to go that day or you’re probably losing out on the deal. And we even did that on some and we made offers 5%, 10% over ask early on and still lost out on ’em. So I just remember like, hey, having to go to these in-between meetings at work and having to run through this stuff. And that’s difficult because not a lot of W2 jobs are just going to let you leave midday to go do showings at houses or bank appointments or talk to contractors.

Dave:
That’s such a good point. What about flow? Do you feel like, I hear a lot of people, I want to be an agent, I can get into properties myself and without an agent, or you get access to off market deals or pocket listings. Do you think about that at all?

Paul:
Yeah, I definitely do. Especially I think our real estate agent is awesome. We’ve had him for this primary residency is the head of his brokerage, so the relationship’s been good and we have gotten deals, but I think a lot of people that are probably following BiggerPockets, they don’t have hundreds and thousands of properties where for these agents, they’re the top person that’s getting called, right? So if I’m somebody that has six properties, I’ve never had an issue reaching out or contacting my agent, but probably the best multifamily deals are probably at least being offered up first to bigger investors than what we would get. And I think if we were agents, we’d get to see more of that stuff on the front end.

Dave:
Yeah, exactly. That is definitely a trade off. I think about that a lot. You just network. So many times I talk to my friends who are agents and they’re just friends with the title company, they’re friends with the lender. They just hear about stuff that I don’t hear about as much. And so that’s definitely a significant trade off. Can I mention what I think is the biggest trade off? The thing I get jealous about,

Paul:
Go for it.

Dave:
I want to be a real estate professional in a tax status. Real estate professional tax status is incredible and you cannot get it as a W2 employee. You probably know about depreciation, right? If you own a rental property and you make some money in cashflow on it, a lot of times the income that you get is offset by depreciation, or at least it’s deferred because of depreciation, meaning that you get to enjoy a lot of that cashflow tax free. What you cannot do though is take the depreciation or the loss that you’re taking on a rental property and apply it to your active income. So even though in a given year, let’s just say all of my rental properties get all my income, I depreciate all of them. Let’s just say I’ve lost $30,000 in the eyes of the IRS. Not saying I actually lost that, but after the depreciation, I’ve lost $30,000.
I can’t take that $30,000 and apply it to my W2 income. But if you are a real estate professional, you can do that. And so if you own rental properties and say you’re a real estate agent, a lot of times you can offset all or most of your active income as well. So you wind up having a very, very low income tax liability, which is incredible and has a huge, huge benefit that W2 employees just don’t get to take advantage of. So that’s mine. One day I’ll probably do it whenever I decide to retire because I’ll never really retire. I’ll probably become an agent or a lender or property manager or something. Then I will get to enjoy the sweet, sweet benefits of real estate tax professional status. Alright, well Paul, thanks for being here. This was a lot of fun. As we’ve discussed, there are always trade-offs to it.
I think there are benefits to both, as we’ve talked about, benefits of being a W2 employee, having that predictable cadence, the lend ability, the staying power, being able to borrow against your 401k. All of that can be super beneficial, but it means you aren’t as flexible. You don’t get access to the same amount of deals. The networks is a little bit harder and you don’t get that real estate professional tax status that is so coveted. But it really comes down to each person’s individual goals, whether you like your job, how much income you make, whether you can make more money as a real estate professional, the decision is up to you. But thank you, Paul, for sharing your insights about the benefits of a W2 job, because I think it’ll be really helpful for our audience in making that decision for themselves.

Paul:
So I think at least with my journey, I just wouldn’t rush so quickly to get out of the W2 job. And I think if you want to become involved in real estate, but you’ve got a good W2 gig, keep investing. Let that portfolio grow to where you have that stable base and then make the pivot. There’s nothing that says you can’t do it further down the line.

Dave:
Yeah, exactly. I think that’s exactly right. Just keep thinking about it and make decisions as they come and optimize for what your goals are, your life circumstances, and the best opportunities that are there for you. So thanks again, Paul. We really appreciate you being here.

Paul:
Yeah, thanks for having me on the show.

Dave:
And thank you all for listening to this episode of the BiggerPockets podcast. I’m Dave Meyer. We’ll see you next time.