BiggerPockets Money Podcast - 258: Finance Friday: Are “High Cash Flow” Rentals Still Realistic in 2022?

Episode Date: December 17, 2021

A common debate in real estate is cash flow vs. appreciation. While some investors rely on their rental property income to reach FI, others argue that appreciation will provide them the equity gain to truly build wealth. You’ll hear this discussion in-depth on today’s episode as guest Jackeline walks Mindy and Scott through her $20,000 rental property in Northern Illinois.  Jackeline is already doing well in other aspects of her life. She’s got a high net worth, with fully-funded retirement accounts and a big cash cushion, but she wants to reach FI by 45 so she has the option to retire. One of the best ways to do that? Cash flowing rentals! The only problem is that Jackeline is buying these rentals in a less-than-optimal area. With rentals in C or D-class neighborhoods, you can count on more tenant problems, repairs, and headaches. But, these downsides come with the big upside of higher cash flow. Scott and Mindy both help Jackeline balance the scales on what is most important to her: buying in an appreciating market but using more of her cash or continuing to purchase low-cost, riskier rental properties.  In This Episode We Cover Building multiple financial safety nets between retirement accounts, cash, and cash flow  Buying rentals in C to D-class neighborhoods and the pros/cons associated with them Properly screening tenants to minimize turnover and maximize ROI Experimenting with different rental property classes to find a strategy that works for you Finding your real estate tribe and networking with others who can help you grow 1031-ing a property to avoid a tax penalty and grow your real estate portfolio And So Much More! Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey there, as the Bigger Pockets podcast network grows, we're always on the lookout for talented people who think they have what it takes to co-host a show. Is that you? Do you want to be just like me? Well, you can make a submission to our system at biggerpockets.com slash talent so we can get to know you. That's biggerpockets.com slash talent. You'll see a few questions and a place to submit a video reel. Again, that's biggerpockets.com slash talent if you'd like to lend your voice to the great Growing Bigger Pockets Podcast Network. Welcome to the Bigger Pockets Money Podcasts Show number 258, Finance Friday edition, where we talk to Jacqueline about real estate investing in the right location.

I don't necessarily want to retire early, but I just want to be comfortable enough that if that's something that I wanted to do, that I could do it. I mean, I don't necessarily don't ever want to work again. I just don't want to feel like I'm tied to a job. I mean, I've been working since I was 17 full time and I just want to feel like like I could take a break. Like I don't need that nine to five. Hello, hello, hello.

My name is Mindy Jensen. And with me as always is my definitely surviving the zombie apocalypse co-host, Scott Trench. Oh, that is a killer introduction, Mindy. Thank you so much. Scott and I are here to make financial independence less scary, less just for somebody else. To introduce you to every money story because we truly believe. financial freedom is attainable for everyone, no matter when or where you're starting. That's right. Whether you want to retire early and travel the world, go on to make big-time

investments in assets like real estate, or just hone your real estate strategy, will help you reach your financial goals and get money out of the way so you can launch yourself towards those dreams. Scott, I am super excited to talk to Jacqueline today because we're talking about real estate. Jacqueline has a rental property in a city not close to her, but not that far away either, and she wants to know if it's a good investment. Yeah, I thought it was a good discussion. And, you know, I think that what you'll see is that we were able to, you know, identify that while she's experimenting with real estate right now, she does not really have a strategy that she's fully formed and confident in deploying a lot of capital against. And I think that there's probably

a lot of people who are in that same position. So hopefully the discussion will help you today if you're somebody who's considering real estate or has the first venture, but aren't sure if you really want to go all in yet and how to think through the impacts about what that has in the rest of your financial decisions, like contribute to retirement accounts versus saving up for the next real estate purchase. So I think it was a fun discussion and a great show. Yeah, I thought it was a really fun discussion. And, you know, it really kind of highlights the fact that just because a property is not an expensive property, it doesn't necessarily mean that it's going to be a good deal. And when you are running your numbers, you really need to run all of

the numbers and make sure that you're accounting for cap X, capital expenditures, vacancy, and things like that. And in a C neighborhood, you're going to have a little bit more repairs and more expenses than you would in an A, B neighborhood. Before we bring in Jacqueline, let's make my attorney happy and say the contents of this podcast are informational in nature and are not legal or tax advice and neither Scott nor I nor Bigger Pockets is engaged in the provision of legal, tax, or any other advice. You should seek your own advice for professional advisors, including lawyers and accountants regarding the legal tax and financial implications of any financial decision you contemplate. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more

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So every decision actually moves the needle. Achieve your financial goals for good with Monarch, the all-in-one tool that makes money management simple. Use the code Pockets at Monarch.com for half off your first year. That's 50% off at Monarch.com code Pockets. I love Matt, said no one ever. Nobody starts a business thinking, you know what would make this more fun? Calculating quarterly estimated taxes. But somehow every small business owner ends up doing it. Your dreams of creating, selling, and growing, get replaced by late nights chasing receipts, juggling invoices, and wondering if that bad sushi lunch with Scott counts as a write-off. Change all that with Found. Found is a business banking platform built to take the pain out of managing money. It automatically tracks expenses, organizes invoices, and even preps you for tax season without you doing the heavy lifting.

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Found is a financial technology company, not a bank. Bank. Banking services are provided by Lead Bank, member FDIC. Don't put this one off. Join thousands of small business owners who have streamlined their finances with Found. Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles.

Lately, I've been listening to Bigger Leaner Stronger for Fitness, the Anxious Generation for Parenting Perspective, and several Arthur Brooks' audiobooks that have been excellent for mental well-being. What makes Audible so powerful is its breadth. Beyond audiobooks, you also get Audible Originals, podcasts, and a massive back catalog across business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP money. Jacqueline is a part-time real estate agent and a full-time paralegal. She and her partner have a 23-year-old, a 2-year-old, and are adding another one into the mix in just about a month.

Congratulations, Jacqueline. She's also looking for some guidance on saving versus investing. Jacqueline, welcome to the Bigger Pockets Money podcast. Hi, how's everyone doing? We're good. We're so thankful you're on the show with us today. Yeah, thank you. I'm happy to be here.

Happy to be here. Congratulations on the new baby, the future baby. Thank you. Let's jump into your income statement. What does your salary look like and where are you sending it? So my net salary, I'm also including some income from my partner. We have separate finances. It just seems to work for us and it's just how we've been doing things.

So my net salary with some income that he, you know, that he contributes is five. $5,200. Okay, awesome. And then what do you have any additional income coming from beyond that? So I am a part-time real estate agent. I didn't include the income that I received from this part-time job because it fluctuates. It ranges. I've been doing this for about two to three years consistently.

So it ranges between about 10 to, you know, as high as. is 20K a year after, you know, expenses. So what I've been doing with that income is I've been saving that and just kind of keeping it on the sidelines for any type of investment that we look, you know, we're looking for in the future. Awesome. And where does that money go? What are your expenses like?

So with this net income that I gave you, I have been contributing certain percentages to my Roths. So that adds up to about. $1,300 a month. And then as far as expenses, I have a mortgage that's $1,200, property tax bill, that's $450, utilities and cable, $300, home and car insurance, $150, miscellaneous, $200, $200, $200, $200, $200, $200, $200, $0,000. to my savings monthly. That adds up to about 3150. Okay.

So we're, so you already answered the next question I always have, which is what, how much cash is that putting into your savings account? That's $400 a month. And you're building $1,300 a month in retirement savings. And on top of that, we have maybe a maybe of additional income coming in from the part-time real estate agent job. Is that right? Yeah.

Yes. That's correct. So I have about 800 to 850 left over a month, and that kind of gets put away either some in like an emergency fund or like a real estate property that we're kind of fixing up and rehabbing at the moment. It just kind of goes towards those expenses right now. Okay, great. And what are your assets and liabilities? So my mortgage is really pretty much. much the only debt that I have right now. As far as assets, you mean my investment accounts.

Is that correct? Yes. Okay. So as far as investments, like do you mean like total balances? Do you want percentages? Yeah. I want to get a picture of your net worth and where that net worth is, is. Okay. So my 401k, I have an estimated balance of like 275K. My Roth, I have 23K. I have an after tax brokerage account of 10K. Savings, a travel savings, that's about $2,500, an emergency fund. That's $6,000. And then that other savings account, I have about $25,000.

Wow. Awesome. And then you said you had another piece of real estate? Yes. So we bought a rental about a year. year ago. At the time, I purchased it on a heat lock that I had like a 2.5% on. And as soon as like, it was like an introductory for like six, maybe six to 12 months. And as soon as that interest rate went up to like over four, I paid it off. So its value is about 40,000. Okay. So where is this

property located? In northern Illinois. Okay. Awesome. Well, great. And so what would you kind of peg your total net worth on at after just after kind of going through all those items so um the total if you're including my my you know my home equity would be about 540,000 awesome and then what um what's the best way we can help you how what are your goals and what would you like to achieve here well um so for me personally i have been wanting to um you know reach FI by the time that I'm somewhere like 45, maybe 50, you know, hopefully before 50. I don't necessarily want to retire early,

but I just want to be comfortable enough that if that's something that I wanted to do, that I could do it. I mean, I don't necessarily don't ever want to work again. I just don't want to feel like I'm tied to a job. I mean, I've been working since I was 17, full time and I just want to feel like like I could take a break. Like I don't need that nine to five. Awesome. Well, I think that first of all, you're doing, you're doing great. You've got a half a million

dollar net worth. You've got really solid reserves. You've got only, the only debt you have is your, your mortgage. You've got a great investment approach with all this kind of stuff. So the game now is how do we accelerate that? What are some things that we can, you know, are there ways to make more money? are there ways to generate higher returns with your investments with this? So you've got a really clean position, I think, which is really good with that. What are some of your instincts in where you'd like us to look? Are you thinking real estate? Are you thinking side hustles or agent business?

Are you thinking something else? What are your instincts on you? So, I mean, I've been wanting to do rentals. Like, we haven't started, we haven't rented out this property. yet. It's like in the works. It should probably get rented out early next year. But I want to build something. Like I want to acquire more properties, but I don't want the portfolio to get like huge, like some of these other investors. I just want to generate enough income to sustain what my expenses kind of are right now. And then on the side note of that is that I kind of see that all of my

income or not income and like all my money is tied into this 401k and it's tied into the equity in this home. I just kind of want to have like build something else out like as you know as a safety net. Okay, great. So we want to divert money away from the retirement accounts and get a little bit more cash or passive cash flow that you can access now rather than stuff that's tied up in those accounts in perpetuity or until the next until they hit traditional retirement age. Well, great. Walk me through this current rental property. What do you, you know, you said it was purchased for $40,000.

You own it outright. What are you expecting it to rent for and what kind of cash flow are you expecting to achieve? So when I purchased it, we actually bought it for $20,000. And then we have been, we put in, so far we've put in about six or $7,000. in maybe a little more in remodeling it and doing all the work. So then my partner, he's been doing all the work kind of himself. So it's taken a little longer than we kind of expected to get it going. But we're already pretty much almost there.

We're really there. We just need to like list it. But then, you know, we're just kind of giving ourselves a few extra months to make sure that we get like a solid quality tenant in that single family home. So we're thinking of renting. I mean, our rent, the rent looks like $750, $800 a month. So when, you know, I do all of the expenses, I'm only really making about $400 a month cash flow.

I mean, I don't know if that's worth it. It turned into like, okay, so my, I mean, my partner has other properties in Wisconsin. And he has kind of the mindset of, even if it doesn't bring a whole lot of cash flow, if you own it, you kind of have this cash flow always coming in and it just kind of, it's there in the background, right? So he doesn't really, he's not really risk-averse. And in some ways, neither am I, because I don't want to have this huge liability and then not

be able to pay, obviously with my income, pay, you know, this huge mortgage and not be able to cash flow. And that happens a lot like in the city. Like, that's why we've never bought like a multi-unit in the city. city because you can't like cash flow um you know you can't like live in one and like cash flow with another like you have to um it's just not worth it the prices are just really high here so we've been looking outside of the city when did you buy this um first rental property my own um about October November of 2020 okay great and do you have property management in place

No. So we've been doing that ourselves. Okay. Awesome. My instinct on a purchase like this, when you see that kind of price point, it says that there's something undesirable about the location to a certain extent with a $20,000 price point, even if in a $40,000 after a pair value with that. How would you describe the neighborhood that this is in? Yeah. The neighborhood is definitely like a C maybe. I mean, you know, like a CC minus type neighborhood. Yeah, I mean, I kind of, that's another concern of mine. I've even contemplated just selling it and just starting over somewhere else.

But I kind of want to see what it feels like to filter out and take some applications and what kind of tenants we get, you know. I want to at least give it a shot to see. But, I mean, I'm not going to rent it out. it doesn't make sense. Absolutely. And kind of what where I'm going with that is your goal is in the next five years to produce enough cash flow to retire, right, from this, or at least have real estate become a more meaningful part of the portfolio. It sounds like five, ten years with that. That, a property at this price point, that's a 2% rule property. And so that says either you've got

an incredible market or you've got potentially a bad one with that. And if you're not careful, what I'm kind of worried about is whether you're going to actually see the occupancy rates and collect on the rent and keep maintenance and CAPEX low enough to actually produce that $400 per month in cash flow. What is your model telling you? What are you assuming for vacancy and CAPEX and taxes and insurance and all those types of expenses for this property? Well, I mean, I have like notes on like utilities.

I'm, you know, thinking of the water bill, insurance, like 100 a month, 100 a month. And then property taxes are, you know, about 100 a month. And then maintenance and vacancy, I have it at another 100 a month. The maintenance, it's kind of, you know, like the big items that we've seen, obviously the furnace, the new windows, they have new windows. it just needed to get rehab. But obviously we don't know what could go wrong with it. Like something could break. And the good thing is that my partner, I mean, he's been doing property maintenance,

property, yeah, property maintenance since he was about 18. So he knows how to really fix and work and do anything himself. But that doesn't mean that we, you know, I mean, I, I'm a little nervous about it too. And it's been a little, you know, kind of I've been wanting to see it rented to see what it would be like. And I think that was kind of our goal was we wanted to see like if you want to be a landlord. Is this really what you want to do? Like he wants me to see if that's something I really want to do before like we make this huge commitment of buying some property that's like $250K.

And then we have a mortgage. And then, you know, we need that income to kind of pay. it off. So I'm not sure if I answered your question. I'm sorry. Well, you sort of are. You're saying this is an experiment and all that kind of stuff. I would say my instincts are shouting that this is going to be a tough landlording experience based on that price point and what you're describing about the neighborhood and those types of things with that. And I would, I would, have you talked to other landlords in that area that own property, that are, that are, that are, peers. Yes. So I have, I've been that where I've been trying to network on like the Facebook

rental groups in that area. And, um, you know, I've been hearing so many like mixed things, obviously. I hear some landlords that have positive experiences that they get a tenant in there that wants to stay like forever. And then I have like on the flip side, I have the horror stories that, you know, that you can, as you can imagine, especially with like everything going on with COVID and everything that they don't pay or, you know, can't get them out, that kind of thing. But I really don't know. And so, like I said, my partners had this experience before where the neighborhoods are not, like, that great. But he always finds, like, these long-term tenants that want to stay forever, you know.

And as long as you're there taking care of what needs to be taken care of, they have no problem, you know, staying and paying the rent. As long as it's not like some extreme amount of money, you know? Yeah, okay. So it sounds like the key to success in this particular area is to really dial in your tenant screening process and find long-term tenants and treat them the right way and make sure that they stay for a very long period of time. And that's how you make this type of investment work with a lot of this. So if that's the case, and how do you feel about your plan and your processes to

screen and place tenants that meet those criteria in your property? I mean, I have been following and I've been, you know, obviously with doing some real estate in the city and working with clients that are looking, you know, I help people find tenants for their rentals. I feel pretty confident that I can screen. But obviously, I feel like if I'll know after screening for at least a month or maybe. hopefully less. But after screening a month or so, I feel like I'll be sure, like, if this is going to work or not. Like, if I'm not finding them, you know, tenants that meet my criteria, then then I need to switch gears and maybe think about just, you know, listing the house and

selling it. And 40's kind of like a little, like a real conservative number. I'm just being like, I mean, I feel like the house is in really good shape, but, but again, I'm being realistic. Like, when you take, when you, when you consider all the costs that, you know, come out when you sell house. That's what I'd make. I think we're overlooking your ace in the hole in that your partner has been doing this for a long time and has been maybe he has a knack for screening tenants. Maybe he's been very lucky screening tenants or maybe he's really got his processes dialed in. But I would definitely consult him with your tenant screening and let him talk to them as well simply because he has the experience of placing long-term tenants.

When it comes down to it, this is a $25,000 experiment, $26,000 experiment. And it would be great if it worked out. If it doesn't work out, you can sell it and make a profit. I want to remind you that this will be taxed as short-term capital gains, which is taxed as regular income if you sell it before you've owned it for 365 days. So if you, it sounds like you bought it in November, October or November, so we're real close. You just want to make sure, because if you miss it by a day, it doesn't matter. Long-term capital gains are taxed more like 15 or 20%.

I thought it was a straight 15, but then somebody said, no, it wasn't. So I think that's depending on your income. Yeah, I've been kind of following that. I've been listening to the show. And I heard that subject come up about 365 days, which is another reason why we kind of are waiting a little bit to get it rented in case we need to sell it. But yeah, thank you. That's, that's where we're at with that. So, I mean, it sounds like the approach that in the next couple of months, you're going to have a baby and you're going to place a tenant in this property or attempt to place a tenant

in this property and see how things go from there. And then from there, it seems like you're going to then determine your next move, whether it's additional property in this location or if it's going to be expanding your portfolio in another location. Is that essentially the plan with that kind of stuff? Yes. Yes. So that brings us to what you're going to, what you need to do with your cash. And right now you have 25,000 saved up. It seems like specifically for the purpose of buying another property. Is that, is that right? Yes. Yes. Okay. And I mean, go ahead. I'm not sure. what to do with the money exactly. I'm keeping it for that reason and building it out,

trying to build it out. Like I said, when I have any, I've been really putting any additional income that I get from the real estate into that so that I can use it to invest, yes. Yeah. So, well, I mean, it sounds like you don't know what you're doing because you haven't figured out, you know what you're doing at the 25,000 because you haven't figured out, you still have to test your fundamental strategic hypothesis here, which is, Is this a good location? Does this strategy going to work? Am I convinced that I can begin scaling this approach in that location with those types

of properties or do I have to pivot somewhere else? So to me, that's a totally fine position to be in with this. You've got a great retirement situation with that. You're moving those things forward. You're spending much less than you bring in and your wealth is growing regardless of what you do over the next couple of months. And you're testing a strategy. If it works, you've got a great ROI with that.

I mean, that's going to be, what, 5,000 in cash flow per year. And your goal was to get to from this particular property, if you can get a long-term tenant in there at that 400 a month cash flow rate that you're hoping for. If it doesn't work, then you can pivot to the next strategy and you're not out that much. You're making a bet with about 10% of your net worth in this particular place. So you have to, I think, if you want to get to your goal, of getting to financial freedom in the next five years, purchase five to ten of these types of properties

in order to start hitting that cash flow number or pivot to some other place, some other approach, which it sounds like will be in real estate, but maybe in a different location. So to me, I think that you're sitting in a really, really comfortable place from where I'm standing with that.

I like the hesitancy of not knowing what to do with the 25K because that says I'm not 100% convinced in the strategy, which I'm not either. on it based on the high level numbers I've got there. But if you place that tenant, then you'll know, great. Now I need another, I need another 15 to 20 grand because I want to purchase this property without much debt or I'm going to take 20 of that and get a little bit of short term financing. And I'm going to buy the second property sometime, probably middle to late next year and then begin snowballing it from there with that. And from there, and I'm just

kind of getting several steps ahead now. So let me know if this transfer if that is helpful or not. But from there, you might have $5,000, $10,000 per year coming from each of these properties plus whatever cash you're saving from your job and your agent license. So that gets you probably one property per year, maybe two, over the next two to three years to kind of get you into that, that towards that goal. How does that sound? Is that kind of what you're thinking? or have you kind of? Yeah, I mean, that is kind of where I'm thinking. And then as far as my partner, we've been thinking.

Because on the other side of it, without getting too into detail, I mean, he's kind of like has a very similar financial position as well. And we have like-minded goals. And we kind of, you know, we're on the same page when it comes to things like this. And so, I mean, I'm just keeping. keeping my stuff separate right now. But yeah, that's kind of where I see it going. And I'm kind of what we've discussed and where we see it going.

I just want to be, make sure that I'm doing the right things as far as like, should I be saving more in my savings account for, you know, a down payment expenses or like emergency expenses related to this property or anything else? And then, yeah, that I have. have other funds besides the real estate stuff. Yeah. Yeah. Well, I think you're, you're, you have $25,000 right now outside of your emergency

reserve and travel savings, right? So that, that to me, feels like more than enough, way more than you need for the one rental at this point. Maybe 10,000, would be a comfortable level for that one rental with that. that would be that would be pretty solid i think for for something of that size you could always there's always things that can come up but that seems like a reasonably healthy amount for many with that but i think you know are you doing are you doing it right with in terms of where the the cash is going i think that that question is really difficult to answer right now

you're diverting 1 300 a month to your Roth 401k it sounds like yeah that's kind of i've kind recently changed that. We're listening to like the show and doing, you know, doing some calculations on my income and where I fall like with my tax brackets and projections and stuff for like this year. So, I mean, before I was putting all my money in a regular 401k or not all my money, but a good 12 to 15% in my 401k. And then, you know, for the pre-tax savings and now and the match and now I'm switching it up and putting it in like I'd say 12% in the Roth 401k and then I'm doing you know like the whole max on the Roth diary and I've been doing that for at least two to three years well I I like the the personally I think that I like the Roth a lot for

reasons that we've discussed on prior shows, that sounds like you're aligned with to a large extent. I think that's a great move. I think the fundamental question that at the strategic level that comes next is, should you be putting the money into the Roth 401K, or should you by diverting it to your cash position so you can buy more real estate? Right. That's that's the question we're grappling with here. Go ahead, Mindy. I have a comment. Okay, there is this thing called the rule of 72, which essentially says that given an eight to 10 percent return, your money will double approximately every seven and a half to eight years. You have $275,000 in your 401k, which is awesome.

We need to celebrate this more. Yay, Jacqueline, that's a fantastic number. Congratulations, you're doing awesome there. In eight years, that's going to be $550,000. In 16 years, that's going to be $1.1 million. And again, this is not guaranteed. This is based on the rule of 72 and past performance is not indicative of future gains and blah, blah, blah. But that's going to continue to grow, even if you don't put anything else into it.

You are most likely going to be a 401k millionaire in 16 years, which can be kind of overwhelming when you look at, you're like, well, it's only 275 now. It's going to continue to grow. So maybe you have enough in your 401k right now, if that's not where you are. like where you want to focus on because you want to start investing in real estate, or you want to continue investing in real estate. I have another comment back to the property in Northern Illinois. We're looking at approximately a $2,100 tax bill if you sell it now for $40,000

because you've got your $20,000 initial payment, your $6,000 in repairs. That's $2,600. So if you sell it for $40, that's going to be a, approximately $14,000 in profit. You have the potential to do a 1031 exchange, which is where you take all of the profit from the, you take the money that you have into the property and you put it into another property.

You kind of kick the tax can down the road. So the $2,100 tax bill is not due. You just delay it. And there's a lot more involved in that. I'm not sure that this can be a 1031 because it was a flip, it's your intent at purchase if it is 1031 eligible or not. So your intent was to rent it out. You never rented it out.

That doesn't mean that your intent wasn't to rent it out. You just chose not to rent it out after weighing the options and now you're going to 1031 into another property. That's a conversation for a CPA or, you know, a research opportunity for you. But that's something to think about if you start getting these applications and you're like, know what, I just don't want to rent this property out or I'm just not feeling it. Maybe your partner has a really great screening technique that we haven't talked about yet. And, you know, he can find a really great tenant and that would work for a while. But you're throwing another baby into the mix.

I don't know if you know this, but babies are a lot of work. Yeah, definitely know that I'm going through this effect, my two-year-old. Yeah. So babies and new rental property. and, you know, teaching your tenants how to connect with you and how to report, you know, when things are an issue, you know, maybe the timing doesn't work out so well. And maybe it does. But that's just, you know, something to think about as well is the potential for the 1031 exchange. Well, yeah, I think that that could be a great option if you want to avoid the tax bill on that property with that. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments,

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We'd love to talk. Business. circling back just a few moments to the central discussion of should you be investing in the retirement accounts or diverting that money to your cash position. I think I think that the challenge where I'm not sure, frankly, on your situation, what is right. The challenge is you right now have a strategic hypothesis that needs to be tested. with this and you need to feel confident in that approach before you put more money into that neighborhood. Is that right? Right. And so, so right now, probably why it's easy to just divert the money to their office, because that's a really easy strategy. Like, okay, great, I just dump it into

the retirement account. I get it to grow tax advantage. We're good, we're good to go there. It's not going to get you to your five-year goal of having enough money outside the retirement accounts to do what you want. And to Mindy's point, you may already have, you may be approaching CoastFi to a certain extent here with your current retirement account holdings. So I think, I think the, the answer to your question has to do with, how confident am I in this real estate investing approach? Or my plan B, real estate investing approach at another area. And depending on that level of certainty, that's when you know you can begin diverting all that cash to your savings account rather than your Roth to buy so you can buy more real estate. Is that helpful?

Yeah. I mean, my logic right now in diverting the money to the Roth is that if I needed to tap into it, it's available, you know, if some opportunity came up. But, you know, I found out recently that with my job, the, you know, the Roth 401K, you can only really tap into those funds if you leave the, if you leave the employer. So you'd have to, you know, roll it over into a, into a Roth IRA. And, you know, so I'm not even sure what my timeline is, like, as far as like, you know, how long am I going to be with my current employer could be, you know, five, ten years, you know, or it could be, you know, just wake up tomorrow and say, hey. This isn't working out.

But so I guess, yeah, that is the dilemma where, you know, where should I kind of put this money right now until I figure out the next move as far as location? I've tried networking with other agents and other like real estate groups, investor groups, to try to figure out better location and that sort of thing. I just haven't like found the right people to like network with. I was part of, I mean, and without giving too much information, I was reaching out to some of these state investment groups, but then it turns kind of into a thing where they wanted, you know, you to sign up for their master course and all this stuff. And I just don't really want to spend, you know,

what they're asking, 20, 30,000 to become a part of this group, you know. So I just, and so I guess I find more like-minded people, you know, I really don't know where, what areas to tap into. Biggerpockets.com slash events shows, uh, some Wisconsin and Northern Illinois, Southern Wisconsin and Northern Illinois meetup groups. Uh, some of these are still online and some of them are, uh, taking place in person, but if you have the opportunity to go to an online networking event, if you don't find

one, you could always start your own, post it on the BiggerPockets forums at biggerpockets.com slash events. And there are other people in the same area that you're in who are real estate investors who are looking to network with other investors. I think it's great that you're looking for other investors. I think there might also be Facebook groups specific to the city that you're in. or the general area, if you search on Facebook. I don't know of any right off the top of my head.

And I know there's some investment groups further south, like out in Kane County. I know there's one in Madison, if that's close before. I know there's a bunch of the city. Yeah, I think continuing to try with those meetups. I mean, it's like anything else that's going to take a few tries before you find the, the folks that you kind of will best get along with or feel like is the right fit with that. Yeah, there's a lot of that salesy stuff at some of these meetups with that, something that we at bigger pockets try to prevent or help people avoid with all that kind of stuff.

It doesn't mean that the events you find on because those are just people posting their events on bigger pockets. We'd remove them and say you can't do that if we find out about ongoing spam and solicitation and all that kind of stuff at those events, but we do not kind of of like guarantee that you're going to avoid that. But that's at least a place to begin looking, I think, similar with Meetup and just keep trying a few. Another good potential place to go for networking. Well, second, you can post it in the forums or the BP Money Facebook group.

And if you're looking for folks there to network with like investors in Chicago or one of these other areas. And then third, I think agents, if you, you know, that's always a reasonable place to start. So on Bigger Pockets, we have, you know, find an agent, bigger pockets.com slash agents and it's in our nav bar at find an agent. That would be another place to potentially reach out is go meet an agent, grab coffee, talk about your goals and those kinds of things, and perhaps they can divert you to a few

areas that they think will be potentially valuable for you and help you set up a search. So those would probably be three ways to begin that networking to kind of to find those locations with that if you decide that this this particular location is is not the right approach with that or you want to just hedge your betch that's while you're waiting for it to you know to place your tenant okay yeah I think there's other regions in this area that might have been a better fit and at the time when we went to go see some of these you some of these places we were just kind of we were like oh we're getting a better deal obviously with this little price point and you know it's

just the neighborhood and then you kind of have to factor that in. At the time, I wasn't that scared of the neighborhood, like not scared, but worried about it. You know, I grew up in the city and I just doesn't feel like wrong to me, you know, but then as I started listening and talking, you know, like listening to other investors in their comments, it did become a concern as, you know, the turnover or the likely that you get a tenant in there that's going to like seriously damaged and then you got to start all over and then you know that kind of yeah when i think about my my investing personally i'm looking for a place that's going to appreciate that's desirable that's going to attract um good long-term tenants um that's going to see strong rent and appreciation

growth over a 10 15 20 30 year period with that and and that's my approach right and i use leverage and i borrow um money to enhance those returns across those things and i'm mostly focused here in Denver with that. I don't know as much about this type of approach. It could be a very, very good approach with it. The reason why I think we're focusing in so much on it is because you seem unsure about the approach with that. And I think that's where you need to really kind of just keep diving in with that. It could be perfectly viable. I imagine many people are profitably investing in areas like that and getting great returns and providing a valuable service for the community with that.

You know, having looked around and poked around in forum posts for years in bigger pockets, things like really quality tenant screening processes, be ready for cash for keys, being ready for the occasional problem like that, and having enough properties to spread those across and policies and procedures to do with that. That's not an event. It's just something that's part of the deal if you're going to have a number of units. All those things make sense. So I think you could get a great return in this area, but you just need to be clear on your strategy and what you're doing and why you're doing it that way and what's good value and what's not.

I think before you can continue to commit capital confidently into that area. So that that's my my spiel on your approach with that. Not that it's bad, just that it's untested and your uncertainty makes me a little apprehensive about the approach. No, I understand. Yeah, I just kind of have to see it. a little more to see where it goes. And I think that if things don't work out, then I need an exit strategy or, you know, plan B and then kind of move it, you know, pivot from there.

And I think, I think, you know, based on that discussion, I think, you know, when you have clarity on your real estate investment strategy, you know, that's when you, and you don't have to actually invest at that point, but that's when I think you'd start diverting the cash from the Roth to your savings account with that. I don't think you do it until you feel like, no, here's my formula. I'm going to go here. I'm going to buy two properties a year or I'm going to buy one property a year and this location. I'm going to buy with this approach. I'm going to buy this type of property. I'm going to try to attract this type of tenant. All of those different types of things. Once you're super clear on that approach, then and you're like, that's going to be

a better return or it's going to get me toward my goal fast. faster than the Roth, that's when I think you make the switch and start diverting all or most of that cash to that savings account because it'll be better than what you can be able to do in the Roth and you're going to need access to the cash. What do you think, Vindy? I think that's a really good point. Yeah, until you are clear on what you want to do, maybe continue to put it into the 401K. I like that idea a lot.

Another tack to look at is the Section 8 program, which can get a bad wrap. But Joe Osamoa was on the Bigger Pockets, Real Estate Podcast, episode 356, talking about how he does Section 8, and he gets really great tenants who stay super long term. And there's the phrase that the tenant turnover will kill you, will kill your profits. He gets people that are staying for 10 and 12 years at his properties. and they don't want to leave. The rent is guaranteed by the government. So all of the Section 8 tenants that were in place during the pandemic were having their rent paid.

The government didn't stop paying rent. So that's another way to look at it if it is. And I don't know the parameters for Section 8. I don't have any Section 8 housing right now. But that's something to think about as well. And then another thing that I like is potentially. you know, looking into the 1031 exchange and going up where your partner has his properties. He seems to be able to find great tenants. He knows the area. He's already going to be up there

where his properties are. Maybe this city just isn't going to work out and the other city would be better. I think you said that his properties are in Wisconsin. One thing to note is that Wisconsin loves property taxes. They really love to tax your property. So make sure you run. you run the numbers almost as much as Illinois or twice as much depending on what county you're in. Yeah. What were you going to say, Scott? Here's an example of what would make me feel really confident about your strategy, right?

I'm looking in the next five to ten years to become financially independent outside of my retirement accounts or at least give me the option to leave work five to ten years in advance of traditional retirement age, maybe 15 years in advance of that. To do that, I'm not really comfortable taking on a lot of debt. I don't want to go to Denver and buy a $500,000 duplex that I hope will appreciate. I want to buy much cheaper paid off cash flowing rental properties, probably in the $50,000 to $100,000 price point with that. Or get to that point with that. I'm going to pick a town that has reasonable prospects, but I know that I'm not going to be buying in an A-plus neighborhood at that price point.

I'm probably going to be in an area with a-plus neighborhood. area with a lot more blue-collar workers and that type of folks and that type of situation, I'm going to make sure I get a really good real estate agent that knows the area really well that I feel confident in and trust completely with that. I'm going to find a really good property manager. I'm going to use my partner's advantages, the fact that he is handy and can fix some of these things up to my advantage as part of that. And that's going to help buy some properties that need certain types of work,

which is going to really enhance my returns or our returns if we invest together at some point in the future with that. And I'm going to concentrate in that area based on that network, that type of the type of neighborhood that I've identified and those other factors with that that I've outlined specific types of properties, specific areas in that region or that part of town. If you can come in with that, and by doing that, I'm going to commit 25 to, to $100,000 to $200,000 in cash that I'm going to save up gradually over the course of the next five years to these types of investments and either quickly pay off the properties, buy them in cash, or use very light leverage in some cases. You know, in three to five years, that could produce easily $25 to $30 to maybe, maybe $40,000, $45,000 in free cash flow for you, if done correctly.

But I would say, what is it going to take to get to that point? I'm going to have to do a lot of work to meet the right agent. I'm going to have to do a lot of work to identify the right property manager. I'm going to have to know going in what good property management looks like for those different types of areas by networking with a lot of real estate investors in those areas and learning all the ins and outs. They really get sophisticated with the numbers in those different types of markets and particularly around the Mindy's great point around property taxes, especially in the regions you've identified with that where that is going to be a huge factor. But if you can start articulating your strategy to that extent and you feel really confident, especially in that team, the location and the strategy and the returns of those types of things, then I think commit the capital all day to it and start diverting from that.

But that would be an example of, I think, what good looks like in terms of clarity of strategy for your rentals. Is that helpful? Yes, yes. It definitely is. you know, about maybe a year and a half ago, we started looking up in that area where he's at. And we were looking for duplex or a single family home. And then I, you know, I got scared. Every time we would get into like this offer situation, I wanted to get like the best deal.

And then, you know, I'd lose it by like $3,000, you know. And there's a few of those deals that I, you know, I feel like they would have been great rentals. and, you know, I missed those opportunities at that time. And then since then, like, the prices of the homes have gotten so expensive that now I'm kind of, I have like this fear to jump in because I see these prices and I'm like, this isn't where I was a year and a half ago. This wasn't the price a year and a half ago. And so that's where my fear comes in as far as like continuing to look in those areas. Because otherwise, I think we would have gone forward with another place. No, I love.

So that also is just a great point with all this kind of stuff is there's a lot of focus about getting great deals. And there's a good reason to get great deals of that kind of stuff. But if you're going to hold on to the property for 10, 15 years, buying that, paying that extra $3,000, you know, that extra, I don't know, 5% of whatever it is, a few thousand bucks is not meaningful to the overall outcome. I know I'm going to get crushed in the comments on that big with that. But, you know, finding great deals isn't that important to my strategy as a real estate investor.

I try to find good deals. It doesn't mean I'm not trying to find good deals or I'm going to go and be outlandish with that. But once you feel confident, like, no, no, I need to buy five to 10 of these properties in this range. And if I overpay by like two, three thousand bucks on the property, that's not going to impact where I'm at in five years in any meaningful way with that kind of stuff. I'm buying to produce that cash flow. I'm going to hold on. I'm going to put a great 10. in for the long term. And if I do that right, then I'm going to get my, I'm going to move towards

my goal. And my ROI is going to be tweaked by like, I don't know, a 2%. My IRA maybe over the, over that five-year hold period based on that change in initial purchase price. It's just not as meaningful as the fundamental assumptions around what is my cash flow, cash on cash, ROI going to be when the property is stabilized and I'm sitting on it for a long period of time. What's the appreciation rate going to be and a lot of those other factors. How much cash am I going to have to put into rehab it, right? Or how complex is that? What's that risk profile? So it doesn't mean you should rush and make a rush decision or way overpay or chase something into into crazy land. But I think it does mean that if you identify your strategy, you can relax and feel confident that anything inside of a

reasonable range is probably going to work for that. What do you think, Mindy, am I going too far by saying having a line in the sand on the deal and not going over it is, I don't know. The deal is not really that important, the purchase price in many cases. I'm going to invite everybody to send Scott an email at Scott at Thiggerpockets.com to talk to him about that. But I hear what you're saying. And the difference in a long-term deal between $120 and $123,000 is pretty much nothing. If you run the calculations on a mortgage calculator, the difference of those $3,000 over 30 years is like an extra $1.50 on your mortgage payment.

So the current market we're in, though, can be so frustrating because you think that the property is priced well at $120. You are $1.15. You want to make a great offer. You make an offer at $120. You're outbid by $3,000. I have a client right now that I keep getting outbid by just a couple of thousand dollars. And we think we're reaching with our offers. And there's just somebody who's willing to go higher.

It's not normally like this. It's been a really frustrating market this whole year. But yeah, I think that Scott's underlying comment of, you know, a couple of thousand dollars on a long-term investment is not going to be, shouldn't be a deal killer. Yeah, I'd rather overpay by 5 to 10% in a location that I'm convinced is going to be the right one 30 years from now than go a little under on a location I'm much more iffy about. 5% to 10% may be too much with that. But I'm willing to go a little over on a property that's in a great spot that I think is going to be perfect for the long-term strategy versus get the great cash flow. on paper deal that's got that's got some issues with that anyways um hopefully that context helps a little bit with that where you're like look you're you're making a bet here but you're making a bet

with 10% of your net worth right less than 10% of your net worth with it so it's not that huge a bet you're going to need you're going to make many of them and on average across those you're going to get average deals and if your strategy doesn't work with average deals um you are a full-time worker and you're about to have two very young kids, right? Like if your strategy depends on you getting phenomenal deals, I don't think that's a good strategy for you with that. You're not going to be doing, you're not going to be searching for those properties full-time.

Doesn't mean you shouldn't chase good deals. I'm just saying if it depends on you getting, you're getting deals that are outliers, that's going to be, that's a bad strategy, I think. Yeah, I think we've spent a lot of time looking at chasing goods. great deals. I mean, I think we're both like that and we're we were doing that. That's what's been going on, at least early on when we first started looking for, excuse me, a rental is chasing that good deal. And again, not saying you shouldn't get a good deal or try to do that or buy a bad deal with all that kind of stuff. I'm just saying that once your strategy is clear,

you may find it does not matter as much for your strategy to do that. But your strategy is unclear right now And that's why I think you're just looking at lots of properties and looking for what's the, what's a winner deal with that. That probably is hurting or spending a lot of time there, perhaps. Yes, yes, I agree. I would also start looking at properties that have been sitting on the market for a while. If your partner's very handy and can help fix up a property, something that's been sitting there for a while in this market, it looks like there's something wrong with the property.

There could be something wrong with the property. But there could just be like it fell at a concept. I've been looking at a house. It's fallen out of contract four times. This seller, if they're telling the truth, and I really have no reason to believe otherwise, they have had the worst luck with their buyers. It's been a multiple offer situation every single time, and it's just sitting there. And I went up there to look at it, and then she said, oh, we got another offer. I'm like, fine, whatever. But there are properties that are sitting there that are less desirable because they back up to a busy road. You're not going to live there. So maybe that's not such a big deal to you.

Maybe that's not such a big deal to tenants. Or maybe it's less desirable because it's just plain ugly. You can fix ugly with a can of paint and new floors. Like ugly is super easy to fix. So yeah, I think Scott's given you some good advice to think about. And, you know, but also define where you want to be and really define if the current property is the one that you want. another thing to think about is that if Scott can so easily talk you out of this, and he's pretty good at talking people out of things, maybe this isn't where your heart is now. You mean as far as that property up north? Yeah, the Northern Illinois property.

I don't, I'm not sure if I'm like talked out of it. Okay. Well, that's good too. I just more, I'm, I'm stoking it in because obviously I appreciate the advice and I definitely need advice from someone on the outside, you know, looking in because we've obviously been kind of doing, you know, invested in it for so long already. It feels like luck. So I'm not completely like I'm going to try to see it out. And I feel like my gut will tell me what to do once we start looking for applicants and seeing what kind of applicants I get. And if that doesn't work out, then I'm definitely going to

pivot. I mean, it's just I was already feeling that way, which is why. when we, when we, you know, remodeled it, I wanted to have that option. I didn't just do the basic, you know, like the little itty-bitty. You know what I'm saying? I tried to keep that in mind. I wanted the kitchen to look a certain way. You know, I was keeping that open for listing it. Perfect.

Yeah. And that's great. If we can't easily talk you out of it, then maybe this is where you're hearted. Yeah. And again, I don't think we're trying to talk you out of the investment. I'm trying to talk you into putting together a crystallized, scalable strategy. because your fundamental question is one layer deeper than that. It's where do I start diverting all of the excess cash that I'm generating?

Do I keep it in the 401K or do I keep committing it to real estate? And I don't think you can commit it to real estate fully until you are clear on what you want to do and how you're going to do it over the next couple of years. And you are still several months away from that. If this works out, then you've got an answer to that question. If it doesn't, then you need to kind of go back and try to get something somewhere where we were previously. In the meantime, you have plenty of cash with all this. So I don't see a reason to stop the Roth contributions until you feel like, nope,

I'm getting really clear. I'm not 100% clear, but I'm very certain now that I'm going to be keeping, I'm going to continue putting this into real estate in one of these locations with that. That's the time, you know, it's probably time to move that money from the Roth to the savings account. Yeah, no, I definitely agree that I'm not clear where my next step is. And until I figure that out in the next couple months, I don't know where I want to go next or what I want to do next. I mean, I think I have like some kind of a strategy in my mind and what I would commit to, but I don't know the location. And I feel like I do need to spend more time networking with other agents in some of these particular areas and maybe other investors or other people in general.

I need a better network. That's for sure. I need a better network of people to network with that have similar or like-minded goals outside of my partner. Awesome. Well, I think that would be a good first step here. It would be to figure out how you can at least make digital, if not physical connections, with some of these local investors of the next couple months. It's really hard for me to network sometimes with people, especially like in a digital sense.

I mean, I've reached out to people, but some people don't respond. Or, you know, when I had an agent working out there in Wisconsin, you know, she was really friendly at first. And then she saw my price point and where we were at and what we were trying to do. And she's just kind of, when one offered it and go through because we missed it by a couple thousand, she just kind of backed off and I never really heard from her. And I don't want to be chasing people who don't want to help me. That makes sense. Yeah.

There's, there is an agent out there that will help you. But I know exactly what you're saying. It gets really frustrating. Yeah. But I mean, you know, I'm still going to keep trying and still do what I'm doing. Well, yeah, I think you have no choice but to continue with that networking with that. I know that can be frustrating. But again, I'll just plug the bigger pockets, find an agent feature with that.

We click there. That's a good place to start. So, um, and full disclosure, some of, a lot of those agents are paying bigger pockets to connect with folks. So they're hopefully going to respond if they're, if they're, if they're, if they're, they're looking for your business with that. These are so that that's one one thing that we're, we're trying to solve for with that. It's a good business opportunity for us, of course, but that may be a good place to check, check out. Right. I think, I think with agents, I mean, the agents that I've worked with, right, I can't speak for everyone. but I feel like when they see that we're trying to get into this, you know, smaller price point,

they just don't want to deal with it, you know. They want those buyers that are going to, you know, buy quick and jump in. And I'm more reserved and analyzing the deal and, you know. Anyway, so that's why I feel like I need to find more investors that do this frequent, more frequently. Yeah, I think that's right. I think you have to find that agent that's going to help you with that. or you have to say, okay, my strategy says I'm going to buy these properties and I have tested this and there are not a lot of agents that are willing to represent B on these types of small transactions.

Therefore, I'm going to get my agent license and learn how to represent myself in these types of transactions so I can do that I can do that thorough job and feel confident in purchasing these types of properties with that. So again, that comes back down to crystallizing that strategy. If that's the case, you may find that after you network enough, but that is. is true and therefore you're going to have to self-manage, put that, put that together and all those types of things. And that could be a really good business. It's just going to have to modify how you approach things. Maybe it is less of a networking thing and much more of a DIY thing. Okay.

Well, also, what else would you like us to talk about today before we kind of conclude? Well, I mean, as far as like everything that I mentioned, is there anything else that jumps out at you that I'm not particularly that I'm missing. No, I think what jumps out to me in looking at this is you're doing phenomenally well. You've got a great set of retirement savings. You've got a really strong cash position with this. You've got a rental property. You have a side business that has potential to bring in more as you are an agent.

So what am I talking about with that? We already talked about that at the beginning. I just came. So you know, you may. be able to represent yourself on some of these, to a certain extent. Or there might be cross overlap if you're going to Wisconsin for some of those. Or it might be a small stretch to get the license in that state in addition to Illinois with that. Anyways, but I think you're doing phenomenally well with a lot of these types of things.

And you're going to, I think, continue to build wealth, whichever path you choose here. So the question is, what is that real estate or other approach that you're going to take to build that wealth outside of your home equity and retirement accounts so you can access it inside of the next five, 10 years instead of in the next 20 years? So I think you're doing really well and asking the right questions with this. And I think you're going to win one way or the other with it. So how's that for what else am I, what else am I seeing when I serve the position? No, that's great to hear.

I guess I sometimes need that reassurance that I'm. making some good choices. It wasn't, you know, I worked hard to get myself out of some debt that I had in the past. I was always good with, like, I always felt like I was good with money because I had really good credit and this and that. But then when I started really honing in on my finances and realizing that I wasn't able to save other than the retirement outside of, you know, outside of the retirement is when I started to think about other ways.

to like increase my income because that's one thing that's kind of bothered me and which is why I've always why I want to have that security to you know financial independence is because um I've been at my job for a really long time and I haven't had those increases in income um and I've kind of like capped out for my job so now it's like do I start something all over again which I'm not sure that's the right answer for me right now in this point in time. But it's more of having that financial security through other means like real estate and just having that passive income like coming in. That's what's important to me right now. Awesome. Yeah. I mean, that's such a healthy place to be in and you're doing you're doing such a good job with this. So I'm sure you'll be successful

with it. You just have to keep honing that strategy and you'll figure that one out too. So I have no out. So I, yeah, again, I'm, I think you're doing great with all this stuff. Thanks. I appreciate it. When you say you kept out at your job, does that mean as a paralegal in general or at your current employer? With my current employer. I think like going forward, I mean, at least it's been like this for a long, several years where I feel like I'm going to be getting the minimal raises, like the very cost of living minimal raises. and they've kind of warned me that at some certain point, I would cap out and I'm kind of close to that salary. Okay.

So this moment in time when you're about to have a baby is not the time to start looking for a new job. But when you're back from maternity leave, maybe it's time to look and see what other paralegals are making at different companies. And maybe it's time to make the jump. And that stinks because it can be really nice. nice to be comfortable in a position, but if you can make significantly more money, just jumping to another company to do basically the same thing, maybe it's worth the peak.

Yeah, you know, I've thought about this a lot, especially like listening to other money shows and some of the advice that you've given past guests. And I just, I have looked at other jobs and other, like at least to look what they make, what they offer me. that kind of thing. And I'm not really making, like, I wouldn't be making a lot more going somewhere else.

Like, I should have made this jump, you know, five, ten years ago, not right now. Hmm. Then I would have been in a better position to, like, have, like, really impact my, my salary.

Um, so that's something that. Well, we can't go back and change it. So, right. So, um, Yeah, I mean, that's it. Well, I think this has been a lot of fun.

I really enjoyed talking about the real estate today and the different options available to you. And I'm excited for what you choose in the next six months to 12 months. And I'd love to check back in with you after you've decided what to do with this property. Sounds good. Okay, awesome. Well, thank you for your time and we'll talk to you soon. Yeah, thank you so much. All right.

Thank you. Thank you so much, guys. Okay, that was Jacqueline, and that was a lot of fun talking about real estate today. Scott, what did you think? Yeah, I thought it was a fun discussion. She's doing phenomenal. I think that she's got a couple of things left to figure out on that real estate investing strategy. And that, you know, in that period of uncertainty, she's going to figure out whether she wants to keep stockpiling cash or throw it into the retirement accounts. My vote would be for the retirement accounts in her specific situation. But I thought it was a great discussion and a great show. Yeah, the retirement account, until she has a firm idea of where she wants to go, I thought that was a really great piece of advice from you, Scott. So good job.

Well, thank you, Mindy. I thought you gave a lot of great advice today as well. Well, of course, that's always the case. Should we get out of here? Let's do it. From episode 258 of the Bigger Pockets Money podcast, he is Scott Trench, and I am Mindy Jensen saying, Get in line, Porcupine.