BiggerPockets Real Estate Podcast - 742: How to Achieve Financial Freedom Through Real Estate in 4 Steps

Episode Date: March 21, 2023

Financial freedom is the goal we’re all after. Whether you want to replace your nine-to-five income, retire your spouse or family members, spend more time with your loved ones, or just have enough money to travel the world, reaching financial independence is truly the American dream. And the wisest, most stable way to find financial freedom? Real estate investing! For generations, rental property investing has been the foundation of many millionaires’ portfolios, and you can repeat their path with four simple steps. To give you the complete rundown on the four steps to financial freedom, we’ve got Dave Meyer, VP of Data and Analytics and host of On the Market, on the show. Dave embodies the financially-free life most people dream of. He lives abroad, chooses to work, and eats copious amounts of sandwiches every day. But what most people don’t see is the decade of hard work and dedication that Dave put in to get up to this point.  Dave will explain exactly how to calculate the passive income you need to find financial freedom, where to start investing in real estate, how to analyze a real estate deal from scratch, and the one tool that EVERY investor can use to build a rental property portfolio faster. If you want to become a real estate pro in 2023, sign up for BiggerPockets Pro and use code “ANALYSIS20” for a special discount.  In This Episode We Cover How to achieve financial freedom through real estate in 2023  Calculating your FI number and setting the RIGHT type of real estate goals Picking your real estate market and metrics you MUST use when researching  Finding real estate deals and the LAPS funnel professional investors use to find perfect properties How to analyze a real estate deal in minutes using the BiggerPockets rental property calculator  Cash flow vs. appreciation and which you should pick when deciding on your investment strategy  And So Much More! Click here to listen to the full episode: https://www.biggerpockets.com/blog/real-estate-742 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [e-mail]. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show 742. The four steps to financial freedom is about how you can still make positive, concrete, positive steps towards achieving pretty much any type of financial goal, even in today's market conditions. The content covers really practical information like how to pick a market to invest in. What's a good cash on cash return? What sort of ROI you should be looking for? We even go through individual metrics so that you can go and research specific markets

yourself. We're going to talk about how to find leads to build your deal pipeline. We'll obviously get into property analysis because that's sort of my thing. What's going on, everyone? This is Dave Meyer, your host for today's special, sort of different episode of the Bigger Pockets Real Estate podcast. If you listened a couple weeks ago, we released a bonus episode where I went through a webinar I did recently about investing during a correction. And it was really popular. We got really good feedback about it. So thank you all for listening to it. And we're going to go a webinar I put together just over the last couple days called Four Steps to Financial Freedom Through Real Estate. And what we're trying to do with these types of episodes is give you more

practical sort of step-by-step information about investing in current economic conditions. I think this is going to be really practical for you if you are interested in pursuing financial freedom, which I'm guessing you are because you are listening to this podcast. Today's quick tip is, I guess it's kind of a two-parter. The first one is if you've ever thought about becoming a bigger Pro and want to do it today, we have a 20% off discount code for you. Just use the code Analysis 20. That makes a already great deal and even better deal for Pro. And it really gives you basically all of the tools that you need to start scaling your

real estate portfolio. But we even have an extra bonus, which is the second quick tip, which is that if you go pro today using that code analysis 20, you get a free copy of the book I wrote with Jay Scott. It's called Real Estate by the Numbers, and it's designed to teach you how to analyze real estate deals like a pro. Normally, that costs $46. But if you go and become a Bigger Pockets Pro member today using the code analysis, 20, you'll get that completely for free. If you have any questions or thoughts for me about this episode, make sure to hit me up on Bigger Pockets. Did you know your house gets bored when you leave? I can't actually prove that, but it probably

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and even loss of rental income. Now is the perfect time to review your rates and coverage. Get a quote in minutes at biggerpockets.com slash landlord insurance. Steadily, landlord insurance designed for the modern investor. Settle in and focus because, the topics and tricks and tactics that I'm going to be talking about today, they're not hard, but they are incredibly powerful tools to help you achieve whatever financial goals you might have in mind and sort of the financial goals that got you to attend this webinar in the first place.

I'll give you first, before we jump into everything, I'll just give you a quick high-level overview of what we're going to talk about today. At the end of this webinar, you can expect to have learned how to set your goals, how to find the right market to invest in, find the right deals within that market, and to analyze those deals to determine which ones are actually worth pursuing. So as the topic and title of this webinar implicates, we're talking about four steps to financial freedom, and we're not going to make you wait for them. Those are the four steps. How to set your goals, pick the right market, find the right deals, and analyze those deals. And those four steps, I know it sounds really simple,

but it is true. Those things can help you, and they are really the essential things to getting you to financial freedom. And I'm actually just going to add a fifth thing that, yes, you can do this in today's market. And I know we are in a weird housing market, a weird economic climate, but let me just tell you something. I have bought deals in the last couple of weeks. I know every single, every single experienced investor that I know is still buying deals right now, because they know how to adapt their strategy and to find the right deals in really any type of economic climate. The steps that I am going to walk you through today, these four things, work in really any type of economic climate. And as we get through the webinar, I'm going to talk about some

tactics or things that you can change in your shiftings, particularly when you're analyzing deals and finding deals that can help you adjust and still make profitable, good long-term decisions about your finances, even during this type of economic climate that we're Man, let me just quickly introduce myself. If you don't know me already, my name is Dave Meyer. I'm the vice president of data and analytics at bigger pockets. That means I get to work at bigger pockets for full time, which is amazing. I've also been investing in real estate for more than 12 years.

Mostly in rental properties, I have one short-term rental. I live in Europe now in Amsterdam, and so I also do a lot of passive investing in syndications and in lending funds. I host the On the Market podcast, which if you like staying on top of the economy and the housing market news, you should check that out. It comes out every one day and Friday on either Spotify or Apple. I wrote a book with Jay Scott called Real Estate by the Numbers, which teaches you how to analyze deals like a pro. But most of all, what I want you to know is that just like all of you, I'm guessing a lot of you are probably relatively new to real estate. Maybe some of your experience. But just like all of you, I was once new to real estate too.

I really was unsure what I was doing for the first several years that I was investing in real estate. But ultimately, I came up with some simple frameworks that I used to pursue my long-term goal of financial freedom. And that has helped me through ups and downs, through bear markets, through bull markets. All of that is really manageable once you know some of the tactics and simple strategies that real estate investors have been using really for decades. Like, none of this stuff is really revolutionary. It's not new. It is proven. These are proven things that literally tens of thousands, hundreds of thousands of people have done before you.

You just need to do them for yourself. And that's what we're going to do. If you do have any questions about this, you can always find me on bigger pockets. You know, after the webinar, you can hit me up on bigger pockets or on Instagram where I am at the Data Deli. I post all sorts of news, data, e-con type stuff there. You should check it out. Okay. So we talked about four steps to financial freedom.

And we're just going to jump right into this right now. No more waiting. Let's get to the first step. The first step to financial freedom is knowing what you want. Like what does financial freedom mean to you? And I know when you think of this, sometimes people start thinking of financial freedom as being rich, right? Maybe you dream of buying a fancy car or going shopping or, you know, extravagant vacation.

But for most people, and at least for me, that is not what financial independence and financial freedom is about. And rather than finding these showy things, it's much more about being able to do the things that you want, when you want, and with who you want. And for some people like me, love traveling. That is something that is something that really motivates me in my own investing in pursuit of financial independence. For some people, that's, you know, taking time with their family or being able to start a family and not having to work all the time. And ultimately, I think the most common theme that I see among people who want to pursue financial independence is what they're really looking for is not money, but it's actually time. They want to have more freedom in their day to do what they want.

Some people like me still continue to work even once you've achieved financial freedom, but that's because we like to, not because we have to. I get to choose what I do with my time. And I think that is the most important thing about financial freedom is that time, unlike money, is a finite resource. You can't make more of it. And so that, to me, is the most precious thing you can have in this life. And so financial freedom, although it's focused on money, what it's really about is allowing you the time to do what you want. So I think the first step for people, and I found this very, very helpful, and I see people all the time benefit from this, is figuring out what that number is, like how much money. do you actually need? Because so many people come up to me and they're like, Dave, you know,

should I flip houses? Should I buy a rental property? Should I do a syndication? I'm like, well, what are you trying to get to? And most people, they don't actually know what they want. And that's super hard, right? How can you enact a plan? How can you get somewhere if you don't even know where you're trying to go? It's like, if you were asking someone, if you pulled over on the side of the road and you ask someone for directions and they're like, yeah, I'd love to give you directions, where do you want to go? you're like, well, I don't know. How can that person possibly give you directions, right? You need to have in your mind where you want to be going.

And for financial freedom, that is extremely important. And so as you're thinking about this, I recommend you make your goal. You make a financial freedom goal and you want to make it smart. Maybe you've heard of this before. I don't know. A lot of people use this. It's very common in business, something called a smart goal. And I find that making goals in this format helps you stick with them.

better than other types of goals. And so when I say a smart goal, what that means is that the goal is specific. So it has to be like a very specific number. So you don't want to just say like, I want to be financial free. Like that's not a smart goal. To make it smart, you need to be specific. So what is financial freedom to you? Maybe it's that you want $7,000 per month in cash flow or in passive income, right? So that's specific. It's also measurable, right? You can, you know, through accounting, you can figure out how much cash flow your portfolio is making you every month. So by saying I want $7,000 per month in cash flow, it is both specific and measurable. You also want to make it actionable, which you're doing right now. You are making a goal that is actionable because real estate is an

actionable way to pursue financial freedom. Relevant, you know, by saying cash flow, that is, by most people's metrics, cash flow is what you want if you're pursuing financial freedom. And so cash flow as long as your goal is about cash flow, it's probably relevant. And then the last one, don't forget about this, is timebound. So that means you have to put an end date to this goal, right? You can't just say, I want $7,000 per month in cash flow. That's pretty good goal. But if you say, I want $7,000 per month in cash flow within five years, now that is a powerful

goal. It has put the clock, it has started the clock in your head, which will start motivating you hopefully to start getting towards this goal. And so I really encourage you. You don't have to do it right this second, but you probably have a number in your head. I'm guessing all of you are sitting there. It's like, oh, mine's $6,000. Mine's $10,000.

I don't know. But after this webinar, you know, take some notes, write this down. If you don't have something in your mind right now, write it down. Go after this webinar. Go think about what it is that you want out of pursuing real estate because I promise you, getting a crystal clear idea of what actually matters to you is going to be motivating. It's going to help you stay on pace. on track, it's going to help you through the difficult times. There are difficult times in real

estate investing. It's not hard, but there's going to be challenges. And having that crystal clear goal is going to be really helpful to you. So ask yourself, are you ready to achieve that goal? I mean, once you have written that down on paper, once you know in your mind what it's going to be, are you actually ready to put in the time and the effort to do this? It's not hard, like I said, but it does take action. It does take you actually doing something. Real estate, they say, is passive, and it is much more passive than a normal job. But it's not like you can do nothing.

You actually have to get up and take action to start pursuing that goal that you have. So let's do that. That is the goal number one, guys. Sorry, that is step number one is to set your goal and come up with that intention that you have that's going to guide you through the rest of your real estate investing. All right. Step number two is picking the right market, right? Once you know what your goals are, you have to start backing into how you're actually going to pursue that.

And the number one thing I'd recommend you do next is picking the right market. When I say market, I'm talking about like a location. So you could say California, you could say Los Angeles, or maybe you know like the specific neighborhood within your metro area that you want to invest it. But maybe you don't know. So there are two key questions that I think you need to ask yourself when you're just, determining what kind of market you want to invest in. So number one question, is your goal related to net worth or cash flow? So as I said, if you are pursuing financial freedom, most people want their goal to be about

cash flow because cash flow, unlike building equity, which is sort of the other way you earn a return as a real estate investor, unlike building equity, cash flow can easily replace your 9 to 5 income or your W2 income or whatever your income is, right? So you know that is really important. So I'm going to assume most people are talking about cash flow here. Personally, sometimes I look at both. Sometimes I invest for cash flow. Sometimes I invest for net worth.

That is really up to you. But I think the important thing here is that historically, there is a tradeoff in certain markets between cash flow and appreciation. So there are certain markets that just appreciate the, and when I say appreciation, I just mean like the value of the homes go up. So some markets appreciate far more than other ones. So some that come to mind are like San Francisco or Seattle or Boise over the last couple of years. These cities have exploded in popularity and property prices have followed suit.

The thing is, though, when properties appreciate like that, it makes cash flow harder to find, right? Because rent doesn't usually grow as quickly as home prices. And so when home prices grow faster than rent, it makes cash flow hard to find. So that means that the cities that appreciate a lot are typically harder to find cash flow. It doesn't mean it's impossible, but it's just harder. The other thing that you should consider is that some markets are better for cash flow. So when you look at a city like Philadelphia or Baltimore or Birmingham, Alabama, for example, these cities are, the property prices are not as expensive and so they actually cash flow better. So I'm one of the

end of the spectrum, you can look at a market that really cash flows well. On the other end of the spectrum, you might have one that really appreciates well. Or you could pick one that's right in between. These are cities like Tampa Bay or Tampa in Florida or Atlanta or Nashville. These are good sort of hybrid markets that you'll want to, that you can consider. The second question that you need to ask is, do you want to invest close by? So some people are really just sleeping. better at night knowing that they could drive to their investments if they want to and they can go take care of problems themselves. Other people don't really care and are willing to invest wherever, you know, the best deals are. And so ask yourself that question. There's really no right or

wrong answer, but you know, you should know for yourself, like, are you the kind of person that wants to see your property physically on a regular basis? Like, then you should invest close by and you should just find the best market, the best neighborhood within, let's say, an hour or two-hour drive of your primary residence. If you are willing to invest long distance, which is what I do now that I live in Europe, I only invest long distance, it sort of opens up almost any market to you and you can start to examine markets for different qualities, different characteristics. For example, I like to look at a couple of different criteria for evaluating markets. And this works for long-distance investing. So if you're going to invest somewhere far away, these work.

But also, it also works even if you want to invest close by because, you know, I, you know, I used to invest in Denver primarily. I still own a bunch of property there. And even within Denver, you know, certain areas had good cash flow. Even though Denver as a whole, not a great cash flow city, there were still zip codes. There were areas that had good cash flow. There are other ones that were just exploding in property price. So these metrics that I'm about to show you work well, both for long distance and local investing.

The first one I love is called the rent to income ratio. And this is super easy to calculate. All you have to do is take the annual rent for a given area. You can find this. I published spreadsheets on Bigger Pockets that you can check out. It's called the Fileplace on BiggerPockets.com. You can find these spreadsheets that I published there. but you just take the annual rent.

So take the monthly rent, multiply it by 12, that's annual rent, and divided by the average household income for the area. You can find this by Googling it. So again, you do have to take some action on your own. So just go Google it and figure this out for yourself. Most finance experts, personal finance experts, budgeting people say that you don't want to spend much more than 30% of your income on shelter. And so when you evaluate rent to income ratio, if you see that the rent to income is about 30%, that's pretty good. That means that the market is pretty well balanced. If you see that it's well above 30%, that to me is a little bit of a red flag because it means that that area is quote unquote rent burdened,

which means that people, you know, are probably stretched a little bit thin for rent as it is currently. And hopefully that means tenants can still pay their rent. but it does increase the risk that they can't if they're paying a large share of their income for rent. That's a little bit of a red flag. And it also probably hampers future rent growth because there's just a limit to how much people can realistically pay for rent. And so if the rent to income ratio is really high, that, you know, if it's 33, 34%, it's not a huge deal, but if it gets to 40%, that is a red flag for me. On the other hand, if the rent income ratio is well below 30%, let's say it's 22%.

that's to me something looks really good. Tenants are probably very easily able to pay as agreed on their leases, and it bodes well for future rent growth. So rent to income ratio, great way to evaluate markets. The second one is called the rent to price ratio. And this one's also super easy to calculate. All you got to do is divide the rent at the monthly rent by the average purchase price. Sorry, on this deck it says annual rent, but that was a mistake.

my bad guys, it is monthly rent divided by the average purchase price for the rent to price ratio. And rent to price ratio is awesome because it's a proxy for cash flow, right? So when you do this, you're basically saying, how much income are you getting? That's the monthly rent and comparing it to your biggest expense, which is the purchase price. And that ratio helps you understand how much cash flow you're likely to get in. You're probably going to get a number when you evaluate this somewhere between 1% and 0.5%. And the higher the better, right? So the higher the number, if it's around 1%, it's probably going to be a market that has abundant deals with cash flow.

If you get something below 0.5%, it's probably a market that doesn't have a lot of cash flowing deals. Again, that doesn't mean it doesn't exist. it just means that it's going to be harder to find them because generally speaking on average, when the rent to price ratio is below, let's say, 0.6% is probably going to be tough to find those deals. But because we're talking about averages, that means that even in a market with a rent to price ratio of, let's say, 0.7, it means there's going to be deals better than that, maybe 0.8, 0.9, even 1%. Or there's going to be deals worse than that. But as an investor, it's your job to find the deals that are better than that average and pursue

them, which we're going to talk about in just a minute in steps three and four. So that's the rent to price ratio. Great proxy for cash flow. When I'm looking at markets where I want to buy is one of the first things I look at. Again, it's kind of a crude metric. So you still want to evaluate deals and analyze each and every one of them, which we'll talk about. But it is a good way to screen markets if you're considering a bunch of different markets. A third one is population growth. When it comes to rent and home and home appreciations, everything, really, it comes down to supply and demand, right? The more demand there is relative supply, the higher prices are going to go. And as investors, once you buy an asset, you want the price

to go up and you want your rent to grow up. And population growth is one of the best predictors of future rent growth and property appreciation because it just means there's more demand. So check out population growth. There's tons of free websites where you can find this. The Fred website, the Federal Reserve Bank of St. Louis, they offer a lot of data for free. You can go check that out there. The last one is economic growth. Again, another Fred website is another good place to do that. But basically, when you want to predict appreciation and rent growth, you need people who

can pay the higher rates, right? The whole economy in the area in the market need to get better. And so tracking economic growth, like job growth, the unemployment rate and GDP, which stands for gross domestic product, it's basically just like an aggregate number that measures all the economic output for a given area. If you look at any of those things, you want to find markets that they're going well, right? You want to see an area with good, high paying jobs. You want to see relatively low unemployment rates and you want to see strong GDP growth.

So when you're looking for markets, these are my top four things that I recommend you look at. Again, it's the rent to income ratio, the rent to price ratio, population growth and economic growth. So check those things out. So that's step number two, guys. So as you can see so far, these are not super hard things that were. talking about. Talked about setting a goal. That's just looking inward and deciding what you want, what you need to achieve financial freedom. Step number two is selecting your market and figuring out where you physically want to buy an asset. And the next step, step three, and again, we only

have four steps. So we're moving along here. Step three is finding a property. Okay, this gets a little bit harder, but it's not hard. This is really about developing a system where you can look at a lot of properties. So the number one thing I want you to know about finding a property is that most of the properties, almost all of them, are going to be bad. That's okay. So don't get discouraged. I talk to so many people who are like, oh, I've looked at five deals and none of them work. It's like, yeah, exactly. If they were all super easy, people would all be going out and doing that. Ninety nine percent of the properties, maybe 98 percent of the properties that you look at are not going to be right for your goals, right? Maybe they offer strong appreciation, but you're looking for cash flow. Or maybe

the seller is delusional and is trying to sell it for a price that is not reasonable in any universe. Or maybe it has a lot of deferred maintenance and you don't want to pay for pay to fix up the property. There's a million different properties out there. There's actually 140 million different properties in the United States out there. All you need to do is find the right one for you, or at least the next one. If you're just getting started, you need to find the first one, but you always need to find sort of the next one that is good for you. And so the way that I recommend that you look for deals is by using a system at Bigger Pockets, we call the LAPS LAPS system.

And basically, the lapse system is designed as a funnel, right? If you're into marketing or knowing anything about sales, this is all, this is similar, right? It's all about a funnel where at the top of the funnel, you need a broad, as broad of an exposure as possible. And that in real estate investing is leads, right? You need as many leads as you can possibly get. So let's say we're trying to buy just one deal. What you need to do is find a way to get 100 leads, right? A hundred leads are going to help you get to that one deal. So that and a lead is basically just like a property that you're kind of interested. You don't have to run the numbers yet. It's just something you see. You're like, oh, that's in the right market. You know, it's a duplex. I'm

looking for a duplex. The price point is about what I'm looking for. So that that would be a lead. You don't have to even see it yet. You just need to know that it like has sort of the right basic ingredients for the kind of deal that you're looking for. Then step two of the funnel in the lap system is analysis. So once you've got a hundred deals, it's time to actually analyze those deals and see which one of ones make sense for you on paper. Like which one offer the right cash on cash return, offer the right potential for appreciation, offer the right, you know, economics for you serve you to actually pursue that deal. And so you need to go out and analyze all those deals. Maybe not a hundred of them. Maybe some of them, you know, you look at them and you decide that,

you know what, of these hundreds, I'm going to analyze 40 of them. And if that sounds daunting, don't worry. I'm going to show you how to analyze deals quickly in just a second. But just stick with me on the lap system right now. So you get 100 leads. Then you need. to analyze 40 of them. And then you need to start pursuing them. So of those 40, maybe there's 10 that are really, really good. So right, we've gone from 100 to 40 now to 10. And those 10, you actually go out and start making offers on them. And you know what? Some of the offers are going to get rejected. And again, that is okay because you just need that one. And so this is the system, right? It's about going and looking at tons of deals and being okay with the fact that a lot of them

are not going to work out for you. As long as you find that one, that meets the criteria that you are going to support your long-term financial freedom goals. So that's the LAPS system. So let me just walk you through and help you a little bit with each of these things. So again, LAT system is leads. Let's say you need 100 for your first deal. Where can you find them?

Well, number one is MLS and agents. So one of the great things about the economic climate we're in right now, and there's not too many great things. There's a lot of confusing, frustrating things about it. But one good thing that's happened to the housing market is that there are way more deals right now. This is because we've gone from a seller's market to a buyer's market, which means there's much more inventory. And it means that sellers are much more likely to negotiate. I participated in a deal recently where we bought a multifamily unit for 30% lower than it was last summer.

30% lower. And that's not what they listed it for, but after a lot of negotiation, that's what we were able to get it for because sellers know that housing prices are rocky right now and they're willing to accept deals under list press. And so it used to be, you know, over the last couple of years, like during the pandemic, you really sort of had to find off-market deals, or at least that was the most reliable way to find good deals was off-market. That is not true anymore.

You can now find very good deals on the MLS, on Zillow, whatever, you know, website you want to use. there are a lot of good deals. So that's the number one way to do it. If you don't have an agent, I'm sure an agent can help you find out. If you don't have an agent, you should check out BiggerPockets.com slash agent. You can get matched with a investor-friendly agent for free there. So that's a good way to do it. Online, obviously, you can do your own searching either on Bigger Pockets.

We have a listing platform where you can find some on and off-market deals. Or you can do off-market deals as well, which is sort of like private marketing, right? you're looking to identify someone who would be willing to sell a property before they actually list it for sale. You might have heard of the term driving for dollars. This is an off market strategy. You might have heard of yellow letters or mailing postcards. These are all similar strategies to get off market deals. But basically what it is is like you go out and find a property that you want to buy and you make an offer before they go and put it on Zillow. And there's a lot of other people who have the opportunity to make bids on that property. I do this. I've done this. I'm, you know,

found an area where I want to buy and just called some sellers negotiated with them and I've been able to successfully do that. It does work and you can find great deals like that, but it does take a little bit more effort just so you know. Like you have to, you know, actually go out and make a lot of phone calls. You usually have to spend a little bit of money on marketing for off market deals. But it does work. But again, one of the benefits of the housing market that we're in today is that you can find good deals on the MLS, on Zillow, and so that's probably the easiest way to do it if you're new to this. The second thing of the LAP system, so that's how to get leads, right? The second thing is analysis, right? And let me just

tell you the three things about analysis. So analysis is a little bit more complicated. With deals, you know, with leads, you can find an agent going Zillow. You can do that. But in the deal analysis actually has three components to it. The first one is the crystal clear criteria. Again, this is sort of similar to our first step in the webinar today when we're talking about coming up with a goal. The same exact premise is true when you're analyzing deals. You have to know what you're looking for, right? If you start analyzing deals and you don't know what a good cash on cash return is or what a good, you know, ROI is, then you're never going to be able to actually pull the trigger. You're going to be stuck in analysis paralysis.

You're going to be like, is this a good deal? I have no idea. The trick is to set your criteria before you start analyzing deals. If you already know, like, hey, if I find a deal with a 7% or an 8% cash on cash return, I'm pulling the trigger, then you are less likely to get stuck in that analysis paralysis loophole. Instead, you can start actually going out and buying deals instead. So when it comes to crystal clear criteria, I think there are five things that you should really be thinking about.

So think about this. After this webinar, you can start writing this stuff down. But basically, one is property type. Like, do you want to buy a duplex? Do you want to buy a single family? Do you not care? If you don't care, that's also okay. Just write down, like, when you're writing down your criteria, be like, I'm open to anything under four units. Like, you know, like, personally, that's me. Like, I'll buy a single family if it's right or a duplex or a triplex. Some people, like, if you're house hacking, you might only want a duplex, right? Or a triplex.

So write down the property type. The second is location, which we've already talked about in finding your market. But the more specific you can get, the better. So maybe, you know, when you think about the market and go through those steps, look at those metrics that I told you about, you decide that you want to invest in, no, no, Jacksonville, Florida. Maybe once you know Jacksonville, go one step further and find a great location that you're super excited about. Talk to your real estate agent, talk to other investors about where they want to buy and then put that in your criteria. It doesn't have to be one zip code. It could be like, I want anywhere in North Jacksonville or anywhere west of the downtown area. I've never been in Jacksonville.

I don't know anything about it. But yeah, so just like write down some criteria that in your head you'll know if you find that property, you're going to like it. Price range should be pretty obvious, but, you know, given how much money you have, once you talk to your lender and determine how much you can qualify for for a loan, figure out what your price range is and write that down as well. Condition is really important. I think this is one that people really miss.

And that is, you know, do you want something that is, quote unquote, turnkey or stabilized, which means like it's in really good shape. And renters are going to like it right off the bat. They're going to want to move in. It's going to be super nice. That's great. I mean, everyone kind of wants that, but they're more expensive and they tend to offer lower cash and cash returns out of the box if they're really in good shape already. On the other hand, you can buy something that needs a little work, but those are usually cheaper, but you have to put money into it to rehabilitate it, but they tend to offer higher upside. So if you do some, this is called value add, right? Like if you buy something that needs some paint and it needs a new kitchen and it

needs new carpet and you're willing to do that work, you can usually earn a better cash on cash return because of it. And so that's something you should think about. And then the last one is profitability, which I sort of alluded to a minute ago when I was saying like, oh, I'll know if I get a 7% cash on cash return, that's when you should get this good deal. And so profitability, let's just talk about that for a second because I think this is a common question here. Ask yourself, like, what is a reasonable rate of return? We're going to talk about the metrics in just a minute in just a minute. But think to yourself, like, what do you want? Like, some people come out and say, I want a 15% cash on cash return. Okay, that is possible. But risk and return are sort of counterbalances

to each other, right? So any deal that has an amazing reward, there's going to be associated risk with that is just how investing works, right? So, for example, you can buy a U.S. Treasury bond. You get three or four percent right now. That's super low risk, but a three to four percent return is not very good. If you want an eight percent return, you can probably do something that's still relatively low risk, but it's not going to be a crazy amount of risk. It's not going to be no risk like a bond or a savings account. And as you go up in the amount of return that you're targeting, you have to understand that there's more risk. So like flipping, for example, you can earn a 30% ROI on a flip.

But flipping houses is relatively risky in terms of the spectrum of real estate investing. Buying a rental property, you can easily expect to get an 8, 10, 12, even a 15% total return on your property with relatively low risk. So I think that is a great rate of return that you should target. Some of that could be cash flow. Some of that could be through amortization or appreciation. but that's something for you to think about what level of risk and return you're comfortable with and then you need to think about like what's a good deal in your area right

you pick a market and find out what a good deal is like are you looking at deals and all of them you know like all of your friends who are investors or every deal that you look at is a 7% cash on cash return then all of a sudden you're analyzing your 40 deals like we talked about and you see one that's a 9% cash on cash return that's when you know it's time to pull the trigger, right? Like, that's how you know what deal is the right one for you to pursue, is once you establish what's a reasonable rate of return

and what's a good deal in your area. And if you're saying, oh, I don't know, I don't have friends. I don't know what a good deal in my area is. We'll get to that because that will come from analyzing a lot of deals, right? If you analyze 40 deals, you'll know what the average cash on cash return is for this 40 deals, right? Because you've just done it. We're going to show you, I'm going to show you how to do that in just a minute. But, you know, that's a great way to do it.

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That's hostfinancial.com where your property's potential meets unlimited financing. All right. So what, you know, once you know these criteria, like what makes, metrics should you be looking at? And I'll show you how to calculate these in just a minute. But number one, as we talked about for financial freedom is cash flow, right? And if you probably heard this term, I'd imagine, but if you don't know what it actually means, basically cash flow is if you take all the income from a property, for a rental property, that's, you know, rent, for a short-term rental, that's, you know, you're also income coming

from your guests. So you take your total income, and then you take all of your expenses, that's your insurance, your mortgage, your, we'll get an insurance. of all this, but all of your expenses, you just subtract it, that's your cash flow. Super easy, right? So we're going to talk about how we're going to calculate that just a minute, but that's what cash flow means. I just want to understand what it means. We'll do the math in an easier way in a minute. Second one is cash on cash return. And so we just talked about cash flow. But, you know, if I told you, you know, I earned $300 a month in cash flow and asked you if that was good, what would you say? Well, if I spent, you know, $10,000 to earn,

300 bucks a month in cash flow, that would be great. That would be fantastic. But what if I spent a million dollars on my investment in order to earn 300 bucks a month in cash flow? That's not so good. So you need to measure the cash flow as a percentage of your total investment. And so that's what you do. At cash on cash return, basically you take your annual cash flow, you divide it by the amount of money, your cash that you invest, and you get a percentage, right? And so one of the most common questions is I'm going to cheat. I don't usually do this. I don't usually tell people what like a good cash on cash return is, but I'm going to give you some rules of thumb that I use for myself. So I would say that a base hit, you know, like a decent deal was a 5% cash on cash return. Now,

I wouldn't do a deal with a 5% cash on cash return unless there's some upside as well. So maybe I'm doing a value ad. Maybe it's in a really good look like a really good location that's likely to appreciate. Maybe I know something about the zoning where I'm going to be able to add another bedroom or an ADU in the future. That's when I would consider a 5% cash on cash return. If I'm just looking at a deal for pure cash flow, I usually look for something at least seven or eight percent. If you can hit 10%, I think that's a fantastic cash on cash return. And if you get 15%, that is a grand slam. You've found a great deal. But like I said, make sure that you're not taking on an excess amount of risk to get that cash on cash return. It might be in a bad

neighborhood. It might be a property with structural problems or something like that in order to get that 15% cash on cash return. So when you see a great deal that is way better than every other deal, you want to be interested and jump on it. But also be a little skeptical. Make sure you say, like to yourself, is this real? Is it too good to be true? Because again, risk and reward, they are counterbalances to each other. And where there's one, there is usually, the other. So that's two metrics. We have cash loan, cash and cash return. We also have equity. I talked about building your net worth earlier. And equity is the amount of money that you have sitting in your deal. Right. So if you take the property value, which hopefully is going up over time, and then you

subtract all of your liabilities, which is basically like your mortgage, like the amount of money that you owe the bank and, you know, any other debts that you have to pay off when you go to sell the property, that's how you get equity and that grows over time through different different ways that'll show you. But basically, you know, your property value going up, paying down your loan helps that. If you do any value add and improve the property at all, you can build equity. And that's another way in addition to cash flow that you earn a great return as a real estate investor. The last one is total profit, which is basically combining the two things I just talked about, which is equity and cash flow.

So if you add your equity and cash flow together, you get your total profit, which is at the end of the day, you know, sort of like the highest, most important number for a lot of investors is like, how much are you making on this deal total? All right. So enough talking. Let's actually do this. We're going to run the numbers together. That's the third step. So now we know the criteria. We know what metrics we're going to look at. And now let's do it. We're going to run the numbers. I'm going to show you how to do this. So we're going to actually just do this together. We are going to analyze a real live real estate deal. And I'm going to show you how easy this is, right? I remember I said during the lap system that you need to be able to, you know, look at a lot of deals. You need to analyze a lot of deals. I'm going to show you how to do it quickly using the Bigger Pockets calculator. So I'm just going to jump over here and just show this to you. So I'm just going to jump over here at BiggerPockets.com.

You can find this. If you go to the tools area, there's all these calculators here. I just hit rental property. So I'm going to just hit view my reports just to show you that I really do use these calculators all the time. I have a master's degree in business analytics. and I still use these calculators all the time because they allow me to run deals really quickly, which as we've talked about is sort of the essential component to the lap system. You need to look at those 100 leads.

You need to analyze, let's say 40 of them. And doing a spreadsheet for every one of those 40 is going to take a long time. So I use these calculators. So I'm going to show you how to use this. We just hit start a new report. And I'll just show you that I found a property here on the Bigger Pockets deal finder. So if you just go over here to tools and hit real estate listings, you can find deals. I was talking to an agent in Tulsa the other day.

So I wanted to look for properties in Tulsa. And I picked this one right here. It is an occupied duplex that's selling for $165,000. Each side is two bed, one bath. And this, again, is in Tulsa, Oklahoma. So this is what we're going to look. We're going to analyze this deal. I have not analyzed this before.

I did find the listing before. but I don't know what's going on. Dahlia is the agent I was talking to. She's a great agent if you are looking to invest in Tulsa. Okay, so let's just go back to the property calculator. I'm just going to paste in the address here, and it should auto-fine that and fill that in for us, which is great. And I'm also going to add a photo.

And you don't have to do this, but because the lap system, you know, sort of necessitates that you are looking at a lot of deals, you probably might forget the address, at least I do. Like, I will never remember 1050 North Irvington Avenue, but I will remember this photo. I guess that's just like the way I remember stuff. So I add photos to it because I think it's helpful. And then next, we're moving on to purchase. So what was it for? It was going for 165. So I'm just going to assume at the beginning and we'll talk about this because I do want to talk about offering under list price,

especially in this kind of environment, economic environment. But for now, I'm just going to put it in that list price and say that we're going to buy this for 165. thousand dollars and closing costs are going to be around four grand and if you're wondering how i know that number of four grand while i've been investing for a long time so i have a pretty good idea but if you don't you could just check out these help things over here so just click on calculate closing costs and you can see for example typical closing costs are around one to two percent in the purchase price of the property but it can differ i'm going to assume it's actually above two because for lower price properties, I actually think it's above 2%. But check that out. So I'm going to assume then we need to discuss are we rehabbing the property? I don't really know anything about this

property, but let's just assume that we're going to put some money into it, right? That's one of the best ways to make money as a real estate investor. So let's assume, and I'm making this up, guys, I just want to show you how to use these calculators, how to run a lot of deals. I don't know if these are accurate. When you're running your own deals, you're going to want to think through each of these pretty carefully. I run a lot of deals so I could do these pretty quickly, but you'll get there. So after repair value, let's say that we get up to 200 that let we think we can make the value of this property, 200 grand by putting in, let's say, $15,000, right? So now we know what a lot of our costs are and we're ready to move on. There's something here that you should look at, which is this

property value growth here. So we at Bigger Pockets and we built these calculers put an assumption at 2% property value growth. And as you probably know, over the last couple of years, property values were growing insane, right? Sometimes we saw 10% year-over-year growth, 20% year-over-year growth. But the reality is that for most markets, properties appreciate about the pace of inflation, which I know inflation's really high right now, but normally, inflation averages about 2% to 3% a year. And so what I recommend for people right now is to estimate low on the property value growth to mitigate the risk of housing is going down. And, you know, we just saw so much price appreciation. I don't think we're going to see a lot of that in the next year or two. So I would say two percent is fine. You can even put one, let's just put

one percent in there just to be super cautious. All right. Next, loan details. Because I'm an investor, I have to put 25 percent down. But if you want a house hack or you're going to owner occupy a property, you can usually put 20 percent down. And again, if you need help on any of these inputs into the calculator when you're first getting started, analyzing deals, just click on the stuff. It will help you fill this up. Next, we're going to do interest rate. They're about six and a half percent. I'm just going to put that in there. Points charged. Again, I don't think I'm going to get charged points, but if you put less than 20 percent down, like on a house hat, sometimes you get charged a little bit of extra money. And then I'm going to do a 30-year fixed rate loan. I love a fixed rate loan.

I'm going to do it for 30 years and hit next. So as you can see over here, we're already doing pretty well on this property. We've done property info, we've gotten the purchase price. Now I've done loan details. Now it's time for rent. This is one of the, you know, questions I get the most is like, how do you figure out rent? Well, the thing about the Bigger Pockets calculator is it's already telling us that for each of these units, it's $795 per month. But let me show you how Bigger Pockets actually comes up with that. We have this other tool called the Rent Estimator over here. It's actually a tool I helped build, which I'm pretty proud of. So if you check this out, I could just type in. I'm just copying and paste on the address.

I'm going to do this and hit search address, right? So what this does is it pulls comps for rents near this property. So we can see that in this area, there are a bunch of different comps. You know, this one's a one bed, one bath for $6.50 nearby. But this is a two-bed-one bath. And so it's going to average, there's an algorithm that's going to look into it and tell us, like, here's probably the best comp right here. Two-bed, one bath, similar size for $800.

So we can look at each individual thing. We can learn some stuff about the property, like that the property taxes are $2,000 a year. We can learn all this great stuff about it. The cool thing about the calculator that I really like is that this says the confidence level, and it's telling you that the confidence level is love, which is not ideal. But as an investor, I appreciate the fact that this is saying, like, we think it's $2.95, but we're not super sure. So the best way to use this tool, in my opinion, is use it when you're analyzing those 40 deals.

Like, this is genuinely what I use when I'm doing 40 deals. When I get to that pursue level of laps, right? Remember, leads analyze pursue. When I'm making offers, I will do a much deeper dive into the rents to make sure that I'm accurate because that's a super important component of analysis. And the way I do that is when I'll look at Zillow and see what other things are renting for. But I'll also call property managers or other investors. that I know in the area and sort of get their read on what it will rent for to make sure that I'm accurate. So the good thing about the calculators, it told us this at 795, but the important thing is that this is a duplex.

So that's 795 per unit. So that would be 1590 total for gross income. So that's what I'm going to put in there. Again, here, we're going to put in income growth, annual income growth. I actually think it's going to be low the next year. So I'm going to say 1%. That is very conservative because when I buy it. buy a rental property, I plan to hold it for five to 10 years. And I do think that income will average more than 5 to 10 per 1% per year over 5 to 10 years. But like we've been talking about,

I want to be conservative in this type of economic climate. And so I'm just going to put 1% annual growth just to be safe. Then going on to the last section. As you could see, we already, you know, the calculator knows all this public information. It knows what your property taxes are. I'm going to estimate insurance around 1,200 bucks. I just have a good. sense for these kinds of things, but you can just Google this. So just like Google Tulsa, Oklahoma average insurance and you'll be able to find this, I'm going to put $1,200 a year for this. And then it's time to do some of the variable expenses. So I think, you know, right here repairs and maintenance, I'm going to put, you know, let's say 5%. You know, if I was, you can, it depends on the property

condition, but the reason I'm saying 5% is because I just said at the top of this calculator that I was going to put 15 grand into this property. That's 10% on the property price, right? I'm going to put 15 grand into it to upgrade it. And so I don't think my repairs and maintenance are going to be as high as they might be had I not put that initial investment in, right? Vacancy, I like to put 5%. And capital expenditures, I'll also put 5%. Capital expenditures are similar to repairs and maintenance, but they're for the big stuff, right? So it's like for your roof or the HVAC system or the foundation, whatever. You want to make an improvement to the property. That's a capital expenditure. But again, because I'm investing, you know, 10% of the purchase price back into this property, I think that

the capics isn't going to be low. I live in Europe. So I'm not self-managing this thing. So I'm going to say 8% as a management fees. And then that is it for me. I personally like to let my tenants just pay utilities directly. Like if they have electricity, they should pay what they owe. I don't need to get involved in that nonsense. So I put 0% here. If you get a duplex that's not metered separately, again, I just recommend Googling it. Just say, like, what is the Google, like, median or average electricity costs for a two-bedroom apartment.

You'll be able to find it in your area. Specify the area. And you'll be able to see that. Water and sewer is usually like $10 a month. Garbage, I usually pay this stuff, $10 a month. And that's it, guys. That is it. That is analyzing a property.

I've been, you know, blabbering on here, and this took me like five minutes. So if I wasn't talking to you, I could probably do this in two or three minutes. And, you know, when you first get started, this is going to take you 10 or 15 minutes. But I promise you, after you do like three, five, 10 of these things, you're going to be able to do them really quickly. And all you got to do is hit finish analysis here. So that's it. Now we can see that was all it took just that little effort. And now we can get all the numbers for analyzing a deal.

And remember what I said, 99% of properties you analyze are probably not going to be the right ones. Actually, what I said was 10, you know, you're going to want to pursue 10 properties. So let's say 90%, you probably won't want to go past the analysis stage. Let's see if this is one that we think that we would pursue. So at first glance, this is probably not up to the standard I personally would invest in because even though there's $151 a month in cash flow, not bad, the cash on cash return is a little light. It's in 3%, which is not great.

But the annualized return, remember we talked about total profit? that's at 11%, which is good. Just for reference, the average stock market is 8 or 9%. So even though this is below my standard, it's still better than what most people get investing in index funds in the stock market. So if you're thinking, oh, that's too bad. It's not a great deal. Don't think that just yet.

Because while a lot of people think you can just go out there and find deals, and sometimes you can, sometimes you need to make your deal. And so when we were looking at this deal, I assumed at first, that I would just pay full asking price. But I think the cool thing about the bigger pockets calculator is I can actually say, like, all right, 3% isn't good enough for me. What happens if I offer, I don't know, 155 instead?

I can drag this here, and now I can say, all right, now it's at a 4% cash on cash return. That's not bad. What if I could offer, let's just say I can get it down to 152. What are we at here? All right, 4.5% cash on cash return. probably still too low for me, but now we're getting closer. So in my mind, I'm thinking, all right, maybe I can pursue this deal if I can get the seller

to accept whatever I'd put in here, 151,700. How about this? During today's current market conditions, this is a trick for you all. Because we are in a buyer's market, a lot of sellers are willing to buy down the interest rates of their buyers. That means they pay like $3,000 or $5,000 so that the buyer gets a lower interest rate. It's really cool. Ask your real estate agent about it. A lot of sellers are willing to do this right now. So let's just say, okay, let's say our seller will buy down our rate to 6%. All right, now we're talking. Now we're getting a 5.3% and cash on cash return.

Maybe they'll do a 2-1 buy-down where I actually get my rate bought down by 2%. So let's say it goes down to 4.6%. Now, these are temporary. You would only get that rate buy-down for a couple of years, not permanently, but a lot of people think interest rates will go down in the next couple of years and then you could refinance. So now we're looking at a deal that I would consider, right? So these are big assumptions, but let's just say I can get it for 150 and I could get that seller to do a two point buy down where I can get 4.5%. Now we're talking about, first of all, an 18% annualized return. That's almost double the stock market, a cash on cash return of over 7%. and you're making $360 a month.

That, to me, is a deal that is very much worth pursuing. Will the seller accept this? I have no idea, right? But this is what it's about that lap system, right? You need to analyze these deals so that you know what you're willing to accept. This is all about that criteria, right? I knew. I said to you before that I would accept something around 7% or 8% cash on cash return.

And I'm going to stick to that. And I'm going to go to the seller and say, I will offer you, you know, 151 and I need a two point pie down for the next two years. If the seller says, yes, great. But that might only happen one out of ten times. You might have to pursue, remember the LOP system, you might have to pursue 10 deals before one seller accepts it. And, you know, when the seller, if a seller nine sellers reject it, that's okay. Because you have your crystal career criteria and you need to stick to that.

Absolutely, need to stick to it. So that's what you got here. So that's the power of these calculators. It's super helpful. You can not just analyze deals quickly, but you can play with them to see what you should actually be offering sellers right now. If you scroll down, you can see some of those other metrics that I was talking about, like how much cash flow you'll be earning per year, the profit if you sold. So if you held this property for five years, you would earn $73,000, which is amazing because you're not really investing that much into it. Remember, you're putting 25% down on a $155,000 property.

So you're probably putting 40, 50 grand into this. And you would more than double your money in five years, which is phenomenal. And you can see your analyzed return after five years is almost 18%, which is incredible. So that's the, oh, I have one more thing to show you. So one other thing here is this share button. And this is super important when you're going to negotiate with a seller or you want to find private money to help you or bringing your spouse on board. But if you hit enable share reporting and then hit download PDF, you can get this. If you click on that button, you get a super nice looking PDF that shows you all of the numbers.

And I think this is super important because when you go to a seller, right? And you're like, this is what I can pay you. They might, you know, take offense to that and say like, oh, you're just trying to, you know, like work me over. You're not willing to pay what it's worth. And you can show that, listen, I expect a 7% cash on cash return. And these are the numbers that make it work. You can convince people. You can show them that you're not just making this number up.

You are actually putting together a thoughtful offer. And you are offering them what you think the value is worth. And so I think that is super important. It's just the last thing I want to show you here. Again, if you, you know, talking to a lender, you can bring these reports or anything like that. So that's analyzing deals, guys. This is the lap system. I'm going to get back to our PowerPoint here.

But as you can see, if you use the bigger pockets calculator, it is not really that hard. You can do all the analysis that you know. need to do. So again, this is the last system just as a summary. You got to get all those leads, analyze as many of them as makes sense to you. Pursue the ones where you think there is a realistic path to a good deal for you. And then all you need is one. Every time you run the system, you just need one. So now that we've talked about you, I just wanted to talk to you a little bit more about buying in this type of market that, you know, it's super hard to time the market. I spend my whole life basically analyzing the housing market and I don't try and do it.

it because it's super hard. I will try and offer below asking right now. You know, if someone says, you know, if I'm buying out looking at a property that's 200 grand, I'm not going to offer 200 grand right away. I'm going to offer below asking to provide myself a little bit of a cushion. But what I know and other experts know is that time in the market is nearly impossible, but time in the market is what really matters, right? So over time, if you get that amortization, that cash flow, that is what leads to financial freedom. And this is, you know, real estate is not. a get rich quick scheme. It is about, you know, building property and portfolio over time. And when I, you know, when I encounter people and I guide people and coach people on investing right now,

a lot of people say, you know, what's happening next year? You know, what's going to happen six or something now? I don't know. No one knows. But that is okay because real estate is a long-term game. It's about where your property values and where your portfolio is going to be five years from now, seven years from now, 10 years from now, 20 years from now. And so, if you can find deals that you think are going to help you over that life period, that lifespan, that 10 years, then it's not as important what happens next year. Again, don't go out and buy anything. If you think the property value is going to go down 5%, offer 5% below asking. I'm not saying to just go spend willy-nilly, but I'm telling you to just focus on the things that are, you know, focus on the

long term because that's what financial freedom is all about. You're not going to get there in a year or two, unless you have several million dollars already. But if you concentrate on the systems that I've talked to you about today, you can get there in the next couple of years. So let's just quickly review. One, do you have a goal in mind? Do you have a crystal clear idea of what you want and why you're pursuing financial freedom in the first place? Number two, do you know some strategies for evaluating real estate markets? There are four metrics. Hopefully you wrote them down, but you can go check those out or you can watch this webinar again to get those again. Do you know how to begin analyzing your next deal? Hopefully that demonstration I just did shows you that this is not

hard and you can do that you can run dozens of deals in a single day if you just put commit yourself to it. Well, I hope all those things are true and that you know how to do those things. But unfortunately, knowing those three things is it's just not enough. It's super important, but you have one more thing you need to do because if information, information was the answer. We would all be rich, right? We would all be billionaires with perfect abs, as Derek Siverr says. But that's not the reality. Instead, you actually have to start going out and doing stuff. You need to guess. It's important to learn the four steps that I just give you, but you actually have to start taking action. So for some people, the right next step to start taking action is Bigger Pockets Pro. Bigger Pockets Pro is a set of tools and services that we have created. And it really provides,

do everything you need to succeed in real estate investing. We have tools, we have premium content, we have access to our community and services. It is all part of Bigger Pockets Pro. It's really just like when we design these tools and I've helped design these tools over the last seven years, what we focus on is creating a one-stop shop where you have basically everything you need to start and scale and manage your portfolio over the long term. Up until that point, you hit financial of freedom and beyond. So if you are wondering how one subscription can really provide you with all the tools that you need for everything, let me just quickly explain some of the features and values that it has. So the first thing is that those calculators, you can go try them for free, and I recommend that

you do that you do that. But after you use them five times, you do need to pay for them. But as we talked about with the LAPS system, you need to analyze a lot of deals. And that's what these calculators are built for. And so if you are interested in getting your first deal and you want to have analyze a lot of deals. Calculators are super helpful. We also have the rent estimator tool, which I walked you through as well. That is hard information to find, but BiggerPockets makes it super easy. We also have premium content. BiggerPockets puts out a lot of content, but for our pro members, we have curated videos, we have courses, we have webinar replays that really help you get to that next step, get to your first deal and build that financial freedom. We also have

a couple workshops that you can attend. So David Green, and Brandon Turner put together an investing with no or low money down workshop. It's worth $200, but if you go pro, that's completely free. We also have a Finding Great Deals Masterclass. As we talked about in the LOP system, finding deals, finding leads is super important. We have a master class for you that, you know, has been sold in the past for $1,000. That is part of the pro subscription. So you can check that out.

You also get to show the community you need being business with your pro badge. And I think this is super important because personally, I get asked for investing advice all the time by people. And I never know if they're really serious. Like, are they just tire kickers? Are they entrepreneurs? Or are they actually people who are going to take action and start investing in real estate? And the pro badge is one way I know when I'm interacting with people on bigger pockets that they're serious, that they are willing to put some skin in the game and start working on their financial freedom. And so that's, I think, a really overlooked value of the bigger.

Puggets Pro membership. Next, we have lawyer-approved lease documents. So if you need a lease, if you need a break-lease form, a pedidem-dem-dom, whatever it is. Every state in the country, we have up-to-date legal forms for anything you need as a landlord. So that's super valuable. We also have tools and services, which are incredible. This is new stuff. It's so valuable.

It's like kind of crazy that we include this in the pro membership. But you get free property management software for rent-ready, which is one of the most reputable best property management software. You get that completely for free. You get discounts on AirDNA, which will help you if you want to be a short-term renter. You get discounts for CPA courses. And you even get access to Invelo, which is a tool for finding off-market deals, which is really incredible. All these things cost honestly hundreds of dollars, but you get them for free.

The last thing I'll mention about our Bigger Pockets Poo is boot camps. So you can learn from some of the most experienced investors in the world. These are only open to pro members, but if you want to learn from Ashley Care or Tyler Madden or Avery Carr or Craig Curlop or Matt Faircloth, any of these experienced investors that you hear and see on the Bigger Pockets platforms, they teach courses that are only available to pro and you can do that if you join pro. But all these features, all the things that I'm talking about, they're great. But the number one reason to consider pro after all this, the number one reason is just simply because it works. Guys, I have worked at Bigger Pockets for more than seven years now, and I genuinely mean that I have seen tens of thousands, probably 30, 40, 50,000 people pursue and get close and achieve financial freedom through Bigger Pockets Pro because it works. Let me just read you a testimonial from Aaron C who said that the Bigger Pockets calculators are my go-to for analyzing potential properties. There's no way I can analyze the volume of properties I do without being a pro member.

I locked up my first three unit almost a year ago, and I'm now selling for almost a 70k profit that will go towards something larger. The Bigger Pockets calculators were a huge factor in making sure my numbers were right. I also got a note from Patrick M who said back in June, I attended one of your webinars right afterwards. I signed up for Pro. In the next couple of weeks, I analyzed a bunch of deals. Note that guys, right? Remember, analyzing a bunch of deals is important. Eventually, I found a 4plex I got under contract three weeks later.

after signing up for pro and a week later closed on another property that was six units. Big thank you to you and the entire team. Final quick tip, sign up for pro annual. I made my money back at the closing table. So as you can see, this is a system that really works and I do believe that it can work for you. If you're curious how much it costs, you know, you probably are used to seeing real estate coaching and mentorships that are in the thousands of dollars. Bigger Pockets Pro, because of what we believe at Bigger Pockets is only 300.

$9.90. And that might be shocking. It's honestly an incredible value because at Bigger Pockets, our whole mission is to help anyone achieve real estate investing. We don't believe that you need to have thousands of dollars to get started. We believe that if you can afford $390 that, you know, a very reasonable amount for the amount of value that pro offers you, you can pursue financial freedom. That said, just for attending this webinar, we're going to actually even make it cheaper for you. We're going to give you 20% off. and you're going to get it for $312 if you go pro right now. So you can save 20% off Bigger Pockets Pro by just using the code Analysis 20.

That's Analysis 20, A-N-A-L-Y, S-I-S-E-S-20. Just use that and get 20% off. If this isn't convincing enough, I have one more thing for you guys. I have one more bonus for you. And it's my book. I wrote a book, Real Estate by the Numbers, with the Incredible J. Scott, and it's all about deal analysis. That's what this whole book is about.

And as we've talked about, financial freedom is about being able to run the numbers and identify which deals are right for you. This book has everything you need for it. It's normally a $46 value because you get the audiobook, you get the Kindle book, you get the physical copy. That's all for free as if you go pro today because of this webinar using that code analysis 20. So I hope you guys will consider it. It is an incredible deal that we're offering you. Just use, if you want to do it, just go to biggerpockets.com slash pro. So that's where you can go and get all these bonuses is that we're offering to you on top of the normal pro value.

So biggerpockets.com slash pro, enter the code analysis 20. If you are already pro and you want some bonuses, go to biggerpockets.com slash pro slash videos, where you can look for boot camps or get some of the other content there. The last thing I'll just say, guys, is, you know, we at Bigger Pockets want to stand behind the pro membership. We truly believe that it is the key to following the four steps to financial freedom that I've walked you through today. And so if you go pro and you don't love it, we will give you all of your money back. We don't care.

We'll give you 100% of your money back. If you're not using it, if you're not actively working towards financial freedom, we don't want your money. We don't want you to be pros. You can try it for free for 30 days. We are very confident that you're going to see the value in all the things that we've created for you in the pro membership. and think that you'll love it. So I'll leave you with some parting words from the very wise Jim Rome. He said, if you really want to do something, you'll find a way.

If you don't, you'll find an excuse. So I encourage you, whether it's going pro or some other way, to start taking action, to take the knowledge that you've learned here today in this webinar and start applying it in your life every single day. If you do consistent actions every single day, I promise you, you will get on that path towards financial freedom and you will get there faster than you think. That's it for me today, guys. Thank you so much for joining.

I hope you learned a lot. If you have any questions for me, you can always find me on Bigger Pockets or on Instagram where I'm at the Data Deli. I appreciate you all, and I'll see you again soon. All right, thanks everyone for listening. I really hope you enjoyed the webinar. Again, if you do want to go pro today,

it is a great time to do that. You can use the code Analysis 20. And in addition to all the benefits of pro we just talked about, you will also get a free copy of the book I wrote with Jay Scott, Real Estate, By the Numbers. Thanks again for listening. I really hope that you've learned something about pursuing your financial freedom, your financial independence, whatever those financial goals are for you. I hope you learned and have some ideas on how to take some practical action towards those goals. If you have any questions for me, again, you can always find me on Bigger Pockets, either in the forums or you can just send me a direct message or you can find me on Instagram where I'm at the Data Deli. Thanks again for listening. We'll see you next time. estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday.

I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calicoe content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.com. The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. Bigger Pocket's LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a

reliance on information presented in this podcast.