BiggerPockets Real Estate Podcast - 887: Seeing Greene: Your Last Chance Before the House-Buying “Tsunami” Hits?

Starting point is 00:00:00 This is the Bigger Pockets Podcast Show 887. What's going on, everyone? This is David Green, your host of the Bigger Pockets Real Estate podcast. Today we've got a Seeing Green episode. If you haven't been here for one of these, you're in for a treat. We take questions from you, our community, and our listener base, and we put them out there for everyone to hear as I do my best to answer them. Based on the information, the knowledge, and the experience that I have developed over about

Starting point is 00:00:25 15 years of investing in real estate myself. In today's show, we cover. What could happen if rates drop below 6%? What to do if buying real estate will eliminate your savings? How to improve your digital footprint and marketing as an investor and more. And most importantly, if you want to ask your question on this show, we want you to. Head over to biggerparks.com slash David. The link is in the description.

Starting point is 00:00:49 Go ahead. Pause this show. Send me your question and then jump back in and listen to the rest. All right. Up first, we have a question from Nassir, who is asking how to house hack when the location may not be the best and good deals are hard to find. Let's get into it. Hi, my name is Nassir Smith, and I'm 22 years old, and I'm a fresh tech lieutenant in United States Air Force who just graduated from college recently. I'm about to move to Moody Air Force Base in Georgia, which is about two and a

Starting point is 00:01:17 half hours from Jacksonville City, Florida. I plan to use my FHA loan slash VA loan, which I get qualified for, to purchase my first real estate rental property in HouseHack. But my question to you guys is if the area that I'm going to be in isn't that, does have that many good deals around me, what would you recommend? I do. I don't have that much capital because, you know, I just graduated from college. So what would you recommend? First of all, I would like to say thank you for, you know, helping so many people around the donation and for allowing me the opportunity to ask my question on the bigger podcast podcast. Well, thanks this year. Let me take this opportunity to thank you for your service, bro. Appreciate that. All right. So what do we do

Starting point is 00:02:04 when the area that we want to buy in doesn't have great deals like this? All right, first off, you're definitely going to want to use your VA loan, not an FHA loan because you're military, so you can get zero percent down, but even more important than zero percent down, which is great because like you said, you don't have a lot of capital. VA loans don't have mortgage insurance, which FHA loans do have. And not only do FHA loans have them, but they will have them for the lifetime of the loan. It never goes away. Conventional loans where you put 5% down, usually do have mortgage insurance go away when you hit 80% loan to value, but it's better with VA loans where you never have it in the first place. So you want to use that. Now,

Starting point is 00:02:41 what should you buy with that loan? I would be asking myself where you have a competitive advantage. I talk about this in long distance real estate. When you're trying to pick your market, a lot of people, they ask the wrong question. They just say, what's the best market? Where's the best deals? where's the best place to invest. And you do want to look into a solid area to invest. But in my experience, it's not very often that any one area jumps out as the best place to invest. You want to ask what's the best place for you to invest. Where do you have a competitive advantage?

Starting point is 00:03:12 Do you have contractors in a certain area that can help you? Do you have an agent that you trust that understands real estate investing? Do you have a relationship with a hospital where you can put travel nurses in a property? So for you, Nassir, you're in the United States. to Air Force, what is the likelihood that other members of the Air Force are going to want to rent a room from you instead of staying in the barracks? Can they save money by doing that? Can you convince people to take some of their housing allowance and instead of spending it on rent somewhere to save money renting a room from you and get to live with other people in the military that

Starting point is 00:03:46 presumably are going to be clean, quiet, and pay their rent on time? Now, is this something that will work out when you're not in the house? We want to make sure that you can rent these rooms out to other people when you're not living in the home. So make sure that this is something that is sustainable, that there's enough people at Moody's Air Force Base that want to rent rooms that you can have a consistent tennis base by renting to Air Force personnel. Lastly, make sure that when you're not living in the home, it's going to cash flow. You want to make sure that when you move out of the house and you're renting out the rooms,

Starting point is 00:04:17 it's still making money. While it may be smart to come out of pocket, maybe $1,000 a month because that's still less than what you'd pay if you had to pay rent somewhere. else if the rooms are only renting for 500 a month and you move out and you rent the room you were living in for 500 a month, you're probably coming out of pocket 500 bucks a month at that point. That's not ideal. You don't want to buy real estate that you know is going to lose you money ahead of time. So keep that in mind when you're analyzing the numbers and look for the properties that will

Starting point is 00:04:45 work when you're not living in them. Great question, man, and I'm excited to see how you do. Keep watching the show and let us know how this goes. All right, our next question comes from Logan in Tucson. And Logan asks, I want to ask how you think I should be investing in the next one to two years. Should I go straight for another property or should I play the 401k slash IRA route here for a while? I am a 21-year-old college student currently and I bought my first duplex in 2023. It is in Tucson, Arizona and it's a long-term rental property.

Starting point is 00:05:15 I don't have much saved up currently to get started on the next property. I do have several thousand in IRAs and another several thousand in regular brokerage accounts. this aside, I graduated May and I have a job offer in Miami, and I want your opinion on my next move. All right, Logan, great question here. First off, if you don't have capital, you don't have capital. So you don't really have two options here. It's either keep saving the money and putting it in these retirement accounts, keep saving the money and put it somewhere else, or spend the money. And I'm not going to ever tell you to spend the money.

Starting point is 00:05:43 You want to save that money. So you don't need to be buying real estate if you don't have a whole lot of cash to put down. The question becomes, how long is it going to take to save money and where do you want to buy? If you think you're going to be moving to Miami to take that job, which we don't know that you are, but let's assume that happens. I would be inclined to advise you to go to Miami, save as much money as you can, make as much money as you can, get a second job, work a side hustle, or bus your butt at this job and get a raise, and then house hack out there. And I say that because that is probably, from what I'm aware, the fastest growing market in the country or at least one of them. Tons of businesses are moving to Miami. Tons of development is happening there.

Starting point is 00:06:21 It is a business-friendly state and an extremely business-friendly city. I was out recording some other podcasts in that area in Brickle, and I was amazed at how fast that area is being developed. Like in one year's time, it was like a completely different city. So I am bullish on buying in Miami. One of the members of my loan team bought a condo out there that was a new construction bill. He's already got several hundred thousand dollars of equity because of how fast that's going up. Now remember everybody, what goes up can come down. So if you're a speculative investor that just heard me say, you can make a couple hundred thousand dollars on a condo.

Starting point is 00:06:56 Remember that that isn't going to keep happening. They will hit a ceiling and they can come back down or they can stay flat. But if you're going to be house hacking, man, you're going to be owning the property for a while. It's tough for that strategy to not work out when you do it well. So, Logan, to sum this up, keep saving your money. Move to South Florida. Focus on defense and offense, the first two pillars, and then buy something that in Miami in an area that you think is going to appreciate and ask how you can rent out parts of that unit to keep your

Starting point is 00:07:26 living expenses low in an area that's going to appreciate and watch as your wealth builds. Our next video comes from Missy Swope. And before we get into Missy's question about house hacking at a distance, let's take a quick break. We all joke that rentals are passive, but if you're spending nights matching receipts or guessing what a property earned last month, that's not passive at all. Baselane fixes that part of landlording, the financial chaos. Their banking and AI bookkeeping system automatically tags every transaction,

Starting point is 00:07:53 updates cash flow insights in real time, and builds the reports you need for tax season. You can even automate transfers and move money around without paying wire fees. It's just cleaner. Sign up at baselane.com slash BP and get a $100 bonus. Baselane is a financial technology company and not a bank. Banking services provided by Threadbank, member FDIC. There are two kinds of real estate investors, those who have reviewed their insurance, and those who think that they have.

Starting point is 00:08:14 Most don't realize their coverage wasn't built for how they actually invest. Vacancy periods, rehabs, short-term rentals, or LLC held properties. These gaps surface only when filing claims. That's why investors work with NREG. They specialize exclusively in real estate investors, understanding portfolios, risk at scale, and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your insurance with someone who gets investing at NRE.com slash BP pod. That's NRIIG.com slash BPPod. Have you ever lost a DSCR deal because the financing just took too long? Red flags popped up late.

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Starting point is 00:09:05 so you can get great pricing and a timeline you can count on. Fast, simple, reliable. That's Dominion Financial. Check them out at biggerpockets.com slash dominion. That's biggerpockets.com slash dominion. And welcome back. what we can do to help Missy.

Starting point is 00:09:21 Hey, David. My name's Missy Swope. I'm out of Chattanooga, Tennessee, and I am a newbie to real estate investing. And I have a question about your thoughts on buying a first investment property that is in a different city, still really close. Just a quick background. I was a teacher for 11 years. I need it out of the classroom.

Starting point is 00:09:46 I'm not working a 9 to 5, but I don't want to do this forever. I also have two kids. I'd like to leave something for them. So real estate investing. So for the past few months, I've been working really hard to save up for a down payment, but an opportunity presented itself with my husband getting a contracted position in Knoxville, Tennessee, about an hour and a half away. So we could buy a home as a second home mortgage and not an investment property. So a little bit less down, a little bit better rates. and our plan is for him to live up there when he's there and house hack it. This will take, based on the houses we've looked at so far, almost all of our savings. So that puts me a little hesitant. I'd like to have a little bit more of a little nest aid there. But like based on all the data we see in Knoxville,

Starting point is 00:10:39 it's going to cash flow immediately. Bare minimum will break even, which is still kind of like to cash flowing for us. since my husband has been paying to stay in Knoxville while he's working anyways. So I would love to hear your thoughts on this situation if you think it's a good idea or a bad idea, if I need to give it a little bit more time and save up a little bit more money. Thanks. All right.

Starting point is 00:11:05 Thanks, Missy Swope. All right. I like Knoxville. I like that area quite a bit. I think I'm going to be visiting it in a couple months or at least that area growing quickly and I'm bullish on that. I like the house hacking idea. I'm also bullish on that.

Starting point is 00:11:18 I like the fact you said the property is going. to cash flow. Everything here is lining up to be a green light, pardon the pun, except for one thing. And that's your personal financial situation. If this is going to take up all your saving, this makes me nervous that something could go wrong with this property or maybe one of the other ones that could lead to you being in trouble because you spent all your money on the real estate. So this is not a real estate question. This is a financial independence question. This is a personal budget question. What can you and your husband do to build that nest egg back up? Do you have things that you can sell?

Starting point is 00:11:51 Does he have, do you guys have a boat that you're not using that sitting in the yard that you could sell for 10 or 15 grand to put some money in reserves? Do you have a classic Corvette that he never actually fixed up sitting in a garage somewhere? Can you guys cut back on spending for six months or 12 months and save 10 grand or 15 grand? Can you get a side hustle? I believe you mentioned that you got out of the classroom, but I don't know if you did anything else. Would it make sense for you to get some part? part-time work, start a business, get a real estate license, do something to make some money to replenish the money that you're spending on the downpane of the home. Because if you can improve your

Starting point is 00:12:28 financial picture, you can buy this property, which will significantly improve your financial picture in the future. And I love anything in life that forces me to kick my butt in gears. I see in my notes here that you're currently working in nine to five, but you don't want to do it forever and that you're hoping to have three to four properties in the next five years or so. well, that's not going to happen if you don't buy them. And you're not going to buy them if you don't have the money for the down payment. And if you do have the money for the down payment, but you don't have enough money in reserves, you're not able to buy them either.

Starting point is 00:12:58 So, Missy, we are back to looking at your finances and your budget. What are you and your husband willing to do to both save money or make more money that will put you in the position that you can buy the real estate? Because you're 90% of the way there. You got everything lined up that you need. How could you get a little less comfortable for that last 10%? percent to get yourself very comfortable later in life. If I were in your position with you and your husband, I would sit down at the old kitchen table, pull out the budget and say, what can we do,

Starting point is 00:13:29 not forever, but in the short term to make more money? What options do we have? What skills do we have? What have we not been doing? Is there a consulting that you could do? Is there a business that you can start? Can you work for somebody else? Can you guys say, hey, for the next 14 months, we are both going to take on side hustles. And if we live within our budget and cut something out, and make additional income. 14 months later, we should have X amount of money saved up, and that is more than enough to recover for the reserves. I'd be looking at things like that,

Starting point is 00:13:58 and then I would ask myself, what do I need to do to build additional skills to make more money? Because remember, the more uncomfortable that you get in your job and the more money you make, the more comfortable that you'll be financially. Let me know how that goes, and good luck to y'all in Knoxville. All right, I hope you're enjoying our shared conversation so far,

Starting point is 00:14:14 and thanks for spending your time with me. We love you at Bigger Pocket. If you would like to be featured on seeing green, and I'd love to have you, head over to BiggerPockets.com slash David, where you can submit your question and join me on the show. All right, today, instead of going over YouTube and podcast comments, we're actually going to be jumping into the Bigger Pockets forums. Look at an interesting forum thread. Basically, the forums are a community encyclopedia of knowledge and daily conversations

Starting point is 00:14:40 where people go on to Bigger Pockets to ask questions and share answer to those questions. Think about like maybe the old Greeks when they get together at a bathhouse and sit there and soak and just talk about life. Well, that's happening on the internet over at the Bigger Pockets forums. Today, you're going to be joining me in the bath. So make sure you don't get too pruny. The question comes from Katie Miller, our head of publishing for Bigger Pocket's books. What's something that nobody tells you about real estate investing but should? Katie says the mail and the text.

Starting point is 00:15:13 It's overwhelming. I've never gotten more snail mail in my life, like mortgage statements, bank statements, invoices, property tax statements. And it seems like every time we turn it to a paperless option, the mortgage is sold to someone else, and then I get all new mailed statements to turn off again. Also, all the texting calls from people looking to buy my properties. Okay, before I even read anymore, Katie, I feel you.

Starting point is 00:15:37 This is my life. This might surprise everybody. I have literally had to hire a human to go. to my house and check my mailbox every day because I get so much notifications that it spills over and the mailman stops bringing me mail and then I have to go to the post office and pick up all of this garbage mail. I've also had to tell my phone, don't tell me when a number calls that I don't have saved. So if you've ever tried to call me, that's probably why I didn't answer because if I don't have the number saved, my phone will just ring all day long and I'll get

Starting point is 00:16:10 random text from people with automated texting services trying to buy my properties because when you own out-of-state properties, you show up on all the lists that all of the wholesalers and the real estate investors that are looking for off-market deals get, and then they just blow up your phone and your texts or your mailbox with all this unwanted solicitation. That is such a good point, Katie. Nobody tells you that that is going to happen. Jake Andronico commented and said the headache factor. This is not a passive endeavor, especially in the beginning.

Starting point is 00:16:40 The more I'm involved with larger investors who have been around the block, the more I understand why they're willing to take a lower return for less headache. I've said this myself all the time. When you get obsessed with ROI, oh boy, you stop thinking about how much work you're going to be putting in to get that extra percent. The whole point, generally at least, is to have a simple, passive portfolio. Chad Carton preaches this very well in the small and mighty real estate investor, and I think it's so important. more doors, more return, more loans, more creativity, more, more, more. What about four to eight paid off rental properties in desirable areas with a super low headache factor throwing off 8 to 10k net per month?

Starting point is 00:17:22 That is a great point. People do not tell you about how much work it is. In fact, when people quit their job to become a full-time investor, what they don't realize is they quit their job to become a full-time business owner and absorbed all of the things that they were trying to get away from when they quit their job. This is a great point. Let's stop glamorizing real estate investing and tell people it is what it is. All right, from Bjorn All Blod. Someone should tell you about the incomplete underwriting. Some people consider last year's actuals to cover the expenses and forget about vacancy allowance, expense percentage, cap X, etc. Last year's

Starting point is 00:17:59 actuals may indeed be a long way away from the true picture. That is not something that people tell you about when you get into real estate investing. Personally, I have been shocked by how much of the profits go out the door to the handymen, to the contractor, to the vendors and the service providers that go in there to fix something from your properties. One of my short-term rentals, it's actually a nice one, like a $1.3 million property, had the entire 2023 profit erased in December when I had to replace a well pump that had burned out. People don't talk to you about that. The reality is, it takes money to make money in real estate investing, and you should not be considering getting into this asset class if you're bad with money. This is a way to grow wealth that you've already

Starting point is 00:18:45 created, and there's probably not a better way that I've ever found to do so, but it's also a way to lose your shirt if you don't have the money to get in the game, which is why I wrote the book, Pillars of Wealth. You can pick it up at BiggerPock's.com slash Pillars, where you can learn about a well-rounded, holistic approach to wealth building that is a blueprint or a green print, if you will. at building wealth where you won't screw it up. All right, I love you guys and I appreciate your engagement. This is my favorite part of seeing green as I get to connect with all of you. Please don't forget to like, comment and subscribe.

Starting point is 00:19:16 If you're listening to this on YouTube, let me know in the comments what you think of the show and make sure that you subscribe to the channel. And if you're listening on a podcast app, it's even more important that you take a little bit of time and give me a rating and a review because the way the algorithm works, if we don't get consistent new reviews, the show starts to slip in the rankings. Off market is all the rage right now. And if you've ever wondered how to step up your own marketing to find these off market deals, we're going to be getting into how to collect more leads for that purpose right after this quick break.

Starting point is 00:19:47 When I bought my first rental, I thought collecting rent would be the hard part. Nope. The admin crushed me. Every night was receipts, tax forms and checking who was late on rent. I kept thinking, if this is one unit, how do people run 10? Base lane changed that. It's Bigger Pockets official banking platform that handles expense tracking, financial reporting, rent collection, and even tenant screening, all in one place.

Starting point is 00:20:07 It's the system I wish I had from day one. Sign up today at baseline.com slash bigger pockets and get a $100 bonus. Baselene is a financial technology company and is not an FDIC insured bank. Banking services provided by Thread Bank, member FDIC. There are two kinds of real estate investors, those who have reviewed their insurance, and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest. Vacancy periods, rehabs, short-term rentals, or LLC held properties.

Starting point is 00:20:29 These gaps surface only when filing claims. That's why investors work with NREG. They specialize exclusively in real estate investors, understanding portfolios, risk at scale, and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your insurance with someone who gets investing at NRE.com slash BP pod.

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Starting point is 00:22:49 question. The next one comes from Aaron White, an investor in Houston, Texas. Hey, David, Aaron White here in Houston, Texas. Like you, I'm a realtor investor, although in humble beginnings and growing a growing a business as we speak. And I'd like to learn more from you and how you go about your digital marketing and how you made the decision to build multiple websites. Last year, I made a website to get seller leads. And I'm seeing that networking with more realtors and networking with more wholesalers is something I need to do more of in 2024. So I had the thought of building page and blog with contents, building an email campaign, strategy, et cetera. But I'm torn because I'm an investor on one hand, and I'm a realtor on the other hand, and I'm giving back on a third hand.

Starting point is 00:23:35 So where do I put that content and how do I structure that? I see you have multiple websites for different things and I'd love to learn from you what is the method to your madness and how you structure your digital footprint and how you engage to get more leads. What a good question. And thank you so much for asking this, Aaron, on seeing green, because you're giving me a chance to cut through the BS and give it to you. straight. The mistake I think a lot of people make is they assume that by buying ads, they're going to be buying good leads. Spending money does not turn immediately into good leads. Think about in your life. When you see an ad, do you immediately fill a compulsion to click on it and throw your money

Starting point is 00:24:19 at the person that proposed the ad? You probably don't. In fact, you're probably annoyed by ads. And this is a great thought exercise for a lot of us to take a step back and think about. If you're a real estate agent and you're saying, what can I do to get leads? Or if you're managing a database and you're saying, how do I automate this so that I don't have to actually email the people myself or text them or call them? I just want it automated. Do you like it when you get an automated email or an automated text from someone else? Do you engage with AI when it comes your way? How many of you have ever got that happy Thanksgiving gift in your email from a realtor with a flashing turkey,

Starting point is 00:24:58 smiling silly and thought, oh my gosh, I need to call this realtor right now and list my house with them. Probably doesn't happen. It probably irritates you when you get that message. When we get automated correspondence or ads we did not want, it doesn't make people want to give us money. So one of the things that I think about is how to get away from automating things. You actually want to have a personal touch. So if you're trying to generate more online leads, you have to think about how to make good ads with content that people want to watch. Now my advice, if you're trying to figure this out, is to invest in yourself. How do you become a better communicator? How do you hold people's attention better? How do you think of something

Starting point is 00:25:40 to say that people would want to hear? And then how do you give them that? That builds rapport. I'm doing that right now on this show. This is free for everybody listening. We at Bigger Pockets are teaching you how to build your wealth. Now, through doing that, it builds credibility with bigger pockets. You start to feel comfortable with this company and you start to trust them so that if you're going to buy a book or you're going to use a calculator or you're going to join a boot camp, you're going to do it through bigger pockets because you trust them. If you're going to buy a house, if you're going to get a loan, you've been listening to me on this show for a long time. You feel comfortable using me. You're going to contact me about one of those purposes. The goal is not to put together a campaign to

Starting point is 00:26:20 just generate a bunch of interest from strangers because strangers don't typically give their money to people they don't know. The goal is to turn strangers into friends and then build a relationship with those friends and then market to your friends who know like and trust you. This is what so many marketers get wrong. This is why earlier Katie was mentioning that she's irritated by all of the mail she's getting that she never asked for. So, Aaron, here's what I'm getting at. Invest in yourself. Grow a database personally. Put together events that are teaching people the stuff that you think they might want to learn or giving values to investors. that they're going to want to soak up from you.

Starting point is 00:26:57 If you're looking to work more with realtors and investors in your area, you're correct in assuming that they're going to want some assistant with their fears and concerns because most people are afraid on the journey. So give them something for free that eases their fears and addresses their concerns. That will build rapport with those people. It's like relationship capital that you're making a deposit on with them. And then you can withdraw that capital later when you want business. I talk about this in my book sold for,

Starting point is 00:27:25 real estate agents when they ask the same question. I think they should be talking to their database, pouring into those people, putting deposits into that relationship, and then making withdrawals in the form of, hey, I'd love your referrals when it comes time to someone that wants to buy or sell a house. If you're trying to build a wholesaling business or an investing business, take the same approach. Gary Vaynerchuk covers is pretty good in his book Jab, Jab, Jab, Right Hook. I recommend that if anybody's trying to figure out how you can create a database of people that like you and want to do business without you without being scammy. And our final question of today's fire episode comes from AJ Wong directly out of those bigger pockets forums. By the way, shout out to the producer of this

Starting point is 00:28:07 show, Eric, for coming up with some great content and coming up with really good questions. All right, in the forums, there is a conversation going on presented by AJ Wong asking, are mortgage rates below 6% and a tsunami of buyers and investors coming in 2024? Just four to six weeks ago, clients purchasing second homes or investment properties were being quoted in the eighths, and even gulp, the 9%. On non-conventional financing, needless to say, that put a few investors on pause, and those that did forge ahead could be in line for a refinance and a reduction of their mortgage obligation soon. The 10-year U.S. Treasury, a correlated measure of U.S. mortgage rates, has dropped merely 1% in the past few weeks, and it looks to possibly further decline with the

Starting point is 00:28:52 expectation of as many as two to six fed rate cuts in 2024. Should the average 30-year mortgage rate for primary homes get to below 6%, prepare for a flood of intense purchase and refinance activity, all with a potentially short window of opportunity and execution. What do you think? Well, AJ wasn't asking me. He put it in the forums, but we're here at Seeing Green, and so I get to answer it. This is such a good question, and if I do say so myself, I mentioned this several times on

Starting point is 00:29:22 the Bigger Pockets Real Estate podcast. Yes, right here. While we never want to tell people to buy a property assuming that it will go up in value or assuming that rates will drop, that's speculation. I do tell people that they should buy real estate knowing that at some point it is going to go up and at some point rates are likely to go down. You just don't know when. So the goal is to buy real estate that you can afford, so you don't put yourself in a bad financial picture, in the best areas that you can afford so that it will go up in value the most and will have the lowest headache factor,

Starting point is 00:29:57 which we cover today, and do so in a way with a strong enough financial position that you don't feel pressure that if rates don't go down, you can't get rid of the property. You want to know that, hey, at some point, rates are going to go down and I will refinance then. At some point, the value is going to go up

Starting point is 00:30:13 and I will either sell or refinance then. You want to put all the odds in your favor to play the long game, because the longer that you give yourself, the higher the likelihood that the factors are going to shift in your favor. Now, AJ, you are making a great point. Rates went up to the eights and nines. And for people like me, I had to refinance at rates in the tens, 11 and 12s on a lot of the projects that I was working on. That sucks. So of course, the value of that real estate has gone down. But what happens if rates drop back to the sixes? What if they get to the fives? Not only are you going to see a lot of investors that refinance and boom, they just refinance to that cash flow that everybody was saying doesn't exist. But you're also going to see the value of the real estate go up again. You're going to see more of those bidding wars that we got away from. And you're going to see more people complaining that what? Prices are too high and people are overpaying for real estate. The same stuff that we've been hearing for the last decade.

Starting point is 00:31:10 So my advice in the most challenging real estate market that I've ever seen is twofold. One, you've got to keep listening to content like this to stay aware of the changes that are happening if you didn't know that rates have dropped from the age to the sixes. You'd be assuming that nobody is trying to buy real estate and waiting for a blood bath of opportunity that isn't coming. It's going to be the opposite of rates drop. And number two, you have to play chess instead of checkers. It is no longer as simple as find the cheap house, make a lowball offer, buy it and walk into cash flow and just keep doing that. Now you have to think deeper. You have to think several steps into this process. I'm going to buy a property here and I'm going to give

Starting point is 00:31:54 myself a five-year window, and if rates go down in that five years, I'm going to take this route and refinance. If rates don't go down in five years, I'm going to take this route and sell. If rates don't go down in the next five years, I'm going to take this route and turn it into a short-term rental, or add bedrooms to it, or add a basement to it, or I'm going to buy in the best neighborhood that I can, and I'm going to hold it for 30 years and let the tenant pay it off. And during that period of time, if the market shifts in your favor, you have to be able to maneuver. But what do you think? Let me know in the comments if you think it is simple and I'm missing it.

Starting point is 00:32:29 Let me know if you think that there's a strategy here that I didn't cover. And let me know if you think 2024 is going to go back to a blood bath of prices rising and overbidding and massive competition for real estate and contingencies being waived and everything that we saw before rates went up. Or if you think it's just going to kind of stay the same of where it's at or if you think the prices are going to drop. All right, that was our show for today. Thanks for being here. And guess what? I've got some good news for you. If you like this, there's more of these shows that you can listen to.

Starting point is 00:33:01 Just search YouTube for Bigger Pocket Seeing Green or check your podcast feed for other seeing green episodes where you can listen to more stuff like this and hear the questions from other people that are being asked that are running through the same mind that you've got and get the answers that you need to help build your wealth, grow your portfolio, and set you up for a better life. If you want to be featured on seeing green, head over to biggerpockets.com slash David, where you can submit your question. And if you want to know more about me, you can find my information in the show notes. We'll see you guys on the next one.

Starting point is 00:33:53 Thank you all for listening to the Bigger Pockets Real 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 E&K, copywriting is by Calicokech, 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.

Starting point is 00:34:24 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.

BiggerPockets Real Estate Podcast - 887: Seeing Greene: Your Last Chance Before the House-Buying “Tsunami” Hits?

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