BiggerPockets Real Estate Podcast - How to Make Any Rental Property Cash Flow (Before You Buy)

Episode Date: August 27, 2025

We’re going to show you how to make any rental property cash flow as soon as you buy it. Want to know how to analyze a rental property like a pro? This is how. Expert investors don’t just crunch the numbers once and submit an offer or reject it—that’s an easy way to miss out on the best real estate deals. Instead, we’re showing you how we tweak specific numbers in your offer to make the deal as profitable as possible, while giving the seller many ways to say “yes.” Today, our friend and fellow investor, Ashley Kehr from the Real Estate Rookie podcast, brought us a real deal she’s debating on buying. Here are the quick numbers: it’s a triplex (three units) being sold by a tired landlord. The price seems reasonable, but the expenses may be too high. We use the BiggerPockets Rental Property Calculator to run the numbers and see if it cash flows, then tweak the offer in multiple different ways to boost the returns substantially. Now, Ashley is taking these offers to the seller. Yes, offers—plural—to see which one they’ll choose. Either way, Ashley is in a position to make more money from this rental than before, and all she had to do was get a little creative. Today, we’re showing you, too, how to make any real estate deal cash flow. In This Episode We Cover How to analyze a rental property from start to finish (and calculate an offer) Seller financing vs. bank loans: how to give the seller the choice so you both benefit  Estimating rents and how to ensure that your units will bring in enough revenue  The numbers you can “manipulate” to make your rental cash flow more  The three final offers Ashley will be giving this seller, and why you should not submit just one  And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.biggerpockets.com/blog/real-estate-1166 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 how you make an offer on a rental property that will not only get accepted, but will also increase your passive income. Sometimes when you run the basic numbers on a property, it doesn't cash flow. And that's okay, it happens all the time. That is just a starting point. You have options to craft an offer that other potential buyers are not going to be thinking about that can help you land a great deal. So on today's show, we're going to be running through which numbers you can actually change

and modify before making an offer to a seller. to increase the long-term performance of any rental property you're adding to your portfolio. And we'll also talk about which numbers you should never change when analyzing a deal, even if it's really tempting to it. Hey, everyone, it's Dave Meyer. Welcome to the Bigger Pockets podcast. Today on the show, we are going to be breaking down a real live deal that's brought to us by BiggerPockets rookie host, Ashley, thanks for being here.

Yeah, thank you so much for analyzing. this deal with me. I've been resisting at temptation. You actually haven't analyzed this? I have not. I haven't actually input it into the calculator reports at all. All right, cool. Well, ahead of time, actually did share some information about the deal with us. So I know that it is a triplex in Buffalo going for 275. That's what they're asking for. Yep. I mean, that means that this property is well below the median home price for a single family home, which is like 4.20. 20, but you're getting three units at roughly $90,000 a unit, which is awesome. So in this episode today, basically, we're going to hear about how Ashley found it. We're going to analyze this

deal together. We're going to show everyone how you can use bigger pockets tools to do this in their own investing. And hopefully by the end of this episode, Ashley, you'll decide if you're going to offer and how much. Yeah, I think it's more of how much I'm going to offer because, you know, you might as well put any offer out there. If you don't offer, then you'll definitely not get the deal. That's right. So let's figure that out. Tell us about this deal how it came to you. Yeah. So I actually have a Google voice number that I have set up for my tenants to contact me and also anybody else to talk about investing, I guess. And I received this voicemail from this guy the other day. And he said, hey, I got your card from it was one of the local banks. And he said that one of the

bankers there had given him my card three years ago and said, if you ever want to sell, you should call Ashley. So he kept my card for three years. And I think that just like is a great example of maybe I need to give out more business. Honestly, that is such a good example. I don't think I've ever kept a business card for more than 15 minutes. But it just really speaks to sort of this like long term nature of finding off market deals. I know people all want off-market deals and you want to be able to get them immediately, which is understandable. But it's just a long game. You know, you have to put a lot of hooks and lines in the water, essentially, and some of them might pay off quickly. But if you do this for two or three years,

like they're just going to start hitting over time. And this is just a perfect example. So what does this guy have to offer? Yeah. So I sent him a text and I said, I would love to know more information if you could send me the addresses of the process. properties and what the runs are. So based on that information, I can pretty much find any other information like property taxes, different things like that that I would need to actually analyze. So those are the things that I need to know to actually start analyzing the deal. So he ended up sending me an email and basically went into he'd been a landlord for over 25 years. And he had accumulated five properties. There was a six unit.

a four unit, a three unit, and then a couple duplex, I think. Yeah. So he said it was just time for him to start letting go. And this year he wanted to sell two of them. The triplex will go over and then another duplex. And then over the next couple of years, he'd like to sell the other ones. And he'd like to work something out with me where I eventually bought them all from him. This is a dream come true. Like, if you get that call, you are hooked up for the next five years. I like where this story is going so far. So what happened next? Yeah, so he sends me the rents. He also sent me interior photos of all the properties too. In this triplex, we're seeing one unit was completely renovated, nice LVP, newer cabinets, things like that. And then the other ones, they're a little

outdated, I would say. And he did mention in his email that he would be doing a 1031 exchange with the sale of the property, but he would be willing to do seller financing on the sale of it. Whoa. One of the challenges I've always had in investing Great Lakes region is the age of these properties. How old is this one? Like 1800s. Yep.

Yes. Okay. Because you knew that from the listing, but I assume at this point you didn't even know what was going on with the systems. Yeah. I mean, I could figure just because of this town that they're in, that they probably were at least early 1900s. The triplex is actually right around the corner from where I went to high school. So it's like I've walked by it so many times that once I like saw where it was located, I could picture the house immediately.

Oh, that's great. But that's how most of my portfolio is. They are older properties. Yeah, I've done it too. You just have to account for that during your your diligence. So at this point, do you have an estimate in your head at least of what it could grab for rent? Yeah. The rents that actually pretty confident. And I have a bunch of rentals already in this town. And then I'm friends with another property manager who has like 80 units they manage there. So the lower apartment in this is a two-bedroom apartment that's listed at $900 per month, which I think is market value, pretty comparable. And then one of the upstairs apartments is another two-bedroom apartment. And that's listed at 800. I feel like it could easily be brought up to 900. Rents are going

for a two-bedroom between $900 to $1,000 in this market. The second upstairs apartment is a one-bedroom apartment at $600 per month. Okay. I rent a second-story studio apartment for $600 a month. So I think definitely a one-bedroom could be increased to probably $750 to $8.50. That's pretty good. So you're talking, what, $25, $2,600 a month in total rent, asking prices $275. So you're almost at the 1% rule.

even paying what the guy's asking for. Yeah. And like there's the room to increase the rents by about $250 per month. Wow. And every unit he's selling is actually filled. So there's no vacancy. Oh, that's nice. And I know people, you know, that's a big debate.

Do you buy apartments with people in them or not? And I've done it both ways. And I think it's definitely nice to get a property that already has income coming in to it. But also I really do like to. vet my own people and bring them in. Well, this sounds very interesting, just back of the napkin, math. Let's actually break out the Bigger Pockets calculator and analyze it. But we got to take a quick break first.

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company in the U.S., but you must complete it before the tax deadline. Go to costsegregation.com and use code tax deadline to get 10% off your first report. Don't overpay the IRS. Head to costsegregation.com before April 15th. Welcome back to the Bigger Pockets podcast. I'm here with Ashley Care. We are walking through a real live deal. She is preparing to make an offer on.

So we're going to break out the Bigger Pockets calculator, but I just wanted to call out what Ashley is done first before we got to the same. step was get the relevant information here. She knows what the asking price is. She knows what the rent estimates are going to be. At this point, Ashley, have you made an estimate for rehab costs? I recently did another property that is very comparable in size to the other apartments. And it was about $5,000 to do each of those. And I haven't seen inside. So that is just like the basic renovation of these two others. So we're going to use $10,000. Okay.

But like you said, this is also something I definitely want to account for in my numbers. But since there are people that are living there, it's not a rehab that would be done right away. It would wait until it was turned over again because they're actually getting decent rents. Yeah. We're not being completely updated. All right. Let's actually do this thing. So I'm not going to give it with a street address.

So I'm just going to put in your name, street address is Ashley's deal. And I'll just say Buffalo, even though it's probably in a suburb, right? So I'm using the bigger. Calculator, basically for anyone who's listening to this, I'll talk you through what I'm doing. There are five parts of the Bigger Pockets Calculator. First thing is just putting in the property info, which I did basically copy and pasting an address. Then we're going to go through the purchase information. So cost, closing cost, ARV, which stands for after repair value. We'll talk about the loan details, the rents, and then expenses. So when you do this,

getting started, first time, do you run it at what they're asking for, which is $275? Yes. Because I think that's such a great. starting point, and then you can tailor it from there. Right, exactly, because maybe you have a slam and deal right already, and you don't want to push too much to frustrate the seller, or maybe it's terrible and you really need to be aggressive. We'll find out. What do you estimate closing cost to be? I would say, since we're not using a real estate agent, let's just put on my side three grand, because you have to use attorneys in New York State. Okay, you will be rehabbing it. So do you have an estimate for ARV? Because this is the hard part, right? There's not a lot of comp. So you're still

trying to figure out what the value is. Yeah, I honestly don't think that adding the 10 grand will increase the value that much. I think you'll be able to increase the rents. So I would say it probably stay at 275, which seems ridiculous to, okay, put 10 grand in and still be worth the same, but I think that the opportunity would be to increase the rent. So I guess if you had an appraisal done, it would depend on how they were appraising the property too, if it was the income-based approach or if it was based on the market value. Right. I think this is really good insight, though, for our audience here. Like, sometimes this is just the way it works. Like, you just need to spend some money to increase rents, but market value is not really going to change that much. But

it's an investment in the long-term viability of your income. Like, I've done this where I buy and put 15 grand in repair costs just to like replace stuff I think is going to break. So I don't have to worry about it for the next five years or 10 years. Or like you said, replace a bathroom because you know it's going to get you $100 a month or cover some parking. You know, stuff like that that probably isn't going to come back to you, but it's going to make your vacancies lower. It's going to make it rent higher and that has a lot of tangible value. All right. So that was easy. That was the purchase information. Again, just for everyone listening, Ashley is running this deal at 275, repair costs of 10 grand. We're estimating that the property is going to cost 10 grand to renovate,

and then the ARV is going to be the same, 275. Let me ask you, in the calculators, it asks us for appreciation. The default on the bigger pockets calculators is 2%, which is low. That is below the long-term average. Buffalo is a hot housing market. Zillow's top housing market for two years in a row. What do you run your appreciation at? So I actually Googled it for this market. I did a little research. I used right investor. And they said like the annual growth for appreciation, like the last five years averaged about three percent for this market. I like that. I like using three percent personally. That's close to the long-term average. and I like to assume appreciation is going to be average.

And if it's better, great. But, you know, I don't want to count on that because it's completely out of your control. All right. Let's move on to financing. Haven't asked you that. How do you plan to finance this? So I actually have three options that I could do. One is just a DSCR loan, 20% down, probably around an 8% interest rate.

I would have to increase my closing costs probably for doing a DSER. loan. My second option is to do a commercial loan, which I've actually done this more often than a DSCR loan. So the commercial loan, I go to a small local bank. I go to the commercial side of lending, and I've done it on single family. I've done it on duplexes. And they offer 20% down. And it's a five-year fixed. And then it can be amortized over 15 or 20 years, which in this case, I would pick 20 years. And the interest rate would probably be around a year. And the interest rate would probably be around 8% too. Okay, and then it adjusts after five years.

Yes, and the closing costs are a lot less using the small local bank than going and doing a DSCR loan too. Okay, so I just want to explain to everyone, if you haven't heard what a DSCR loan, it stands for a debt service coverage ratio loan. And basically what this is, it's a loan product that mimics commercial underwriting. When you go and buy retail space, large multifamily, they are not evaluating you as an individual for your creditworthiness. They're looking at the quality of the deal as a business. And if that business can produce enough cash flow to cover the mortgage payment, that's how commercial loans work.

Over the last couple of years, there's been this thing called the debt service coverage ratio loan that's become very popular that basically does the same thing but for residential properties. So rather than underwriting you, going through your credit scores and your W-2s and all that stuff, they're basically to say, hey, you're buying a triplex, Ashley? Like, can this thing throw off enough cash to cover your debt or not? And that's a great option for investors. One, the underwriting tends to not be as difficult. I think they close a little bit faster, I've heard. Yeah.

And you get 30-year fixed rates, too, with them, which commercial lending usually don't. Like, usually you can get five, seven, maybe 10-year fixed. Which personally, I believe is one of the greatest things about residential real estate. One of the main reasons to invest in residential real estate is third-year fixed rate mortgages. So that's really beneficial. And it can also help investors who are bumping up against 10 conventional mortgages. It becomes difficult to do it once you get that. And DSCR loans are not subject to that same limitations.

So those are two. I think you said that you had three financing options. Yeah. And the third one is the seller financing option. Oh, yeah. I forgot about that. So whatever we do is, and we won't have time for this, I'm sure, but what I usually do is I would do two offers. Yeah.

And one offer would be the bank financing. And then the other offer would be the seller financing, usually different, you know, purchase prices and obviously different terms, things like that. But I would submit both to the seller. So, Dave, which one do you want to do? Okay. Well, let's start with the bank financing because that one is just a little more straightforward. Okay. So we're going to do 20% down. Okay, 20% down. And do you have an estimate of rate?

I would say probably around 8%. Okay. We'll go with 8. All right. I assume no points charged. And then what would the term be on that? We're going to put a 20 year. Okay. So it's amortized over 20 years. So that's shorter. So that is going to eat into your cash flow, just so everyone knows when you amortize a loan over less time, it means that you are paying more per year. But the benefit is that you pay less total interest over the lifetime of your loan. So it might eat your cash flow, but your total profit if you held this for 20 years would be higher. And if you wanted to own this free and clear sooner, that's also another benefit if you don't need the

cash flow today. All right. So we've moved through three steps of the analysis. We've done property info, purchase, loan deed. Now we're on rental income. So do you want to use it with current rents, which I think you said were 900, 800, 600. All right. So that's $2,300. We'll go with that. Yeah. And I think always do it as is what the rent are. Because like what if the people stay there for three years and great, you don't have to do anything. But then your rents are the same and you haven't increased them

because you haven't rehab. Yeah. I guess the only thing I would do sometimes do differently is if they're really under market, I will accelerate what I think my rent growth will be in the first three years. Because like normally I'll model out two or three percent rent growth most of the time. But if it's 20, 30 percent under market value, I'll put like 10 percent rank growth for three or four years because I'm not one who's going to just go in and bring it up to market rate right away. I usually try and work with people. So that is just one caveat there. All right. What about rent growth? How do you usually model that at what rate do you think it will grow? I would say probably we could put 2% for this.

I don't think that it will be huge. I think that this area is kind of like at the top of it. I don't like it's drastically drastically increased since, you know, 2020 in the last five years from what rents were. But I don't see that drastic increase happening the next five years or so. Like I think it'll be more steady and stagnant. I think that is very wise in a lot of things these days. is just like assume low growth.

If you're wrong, great. All right. So we're on to our last step. That one was easy. Do you know what the taxes are going to be? Yeah. So this was also something he supplied for me, like a nice breakdown. So in this town, you have to pay school taxes, town and county taxes, and village taxes.

They come out to $3,559. $3,559. Great. What about insurance? $1,500. Whoa, your insurance is low. That's all. here. Well, this is based off of like the other properties that I have in the area as to what

they are. So I think insurance is one of the hardest things to estimate, especially if you don't have any other properties in the area. But it's an easy thing to get a quote for, though, if you don't like rule rule of thumb, you know, like it's hard to estimate if you've never done it, but it's something you can call them out easily. All right. We're on to the expense portion here. So we talked about the fixed costs, which are property taxes and insurance. What about repairs, maintenance, vacancy, cap bags, how do you model those? For a property like this that's older, I'm going to do 8, 8, 8, 8, 8, 8, 8 across the board. 8% just so everyone knows, 8% of rental income.

So that comes to $184 per month for each of these. I think those make a lot of sense. Then management fees, do you self-manage? I do, but I always account for it 10% because there was a time I didn't. Okay, so we're adding on fees. Now, what are we doing with utilities on a property like this? Do the tenants pay or do you? So the tenants actually pay for all of the utilities. Yes, everything is separately metered. Oh, that's really nice. Okay. I assume there's no HOA. No, there's just lawn care and snow plowing would be the other two that we need to add. That would probably be about $3,000 per a year for both of them. Yeah, okay, $2.50 a month. All right, well, we have all the numbers. So let's actually, we're going to click.

finish analysis and see what kind of deal you got here. But I'm going to leave everyone with a cliffhanger because we do have to take one more quick ad break and we'll be right back. The rise of the tech savvy investors here. You don't need a huge team or tons of overhead to manage rental properties. Just the right tools. So I want to tell you about how I use rent ready to get ahead. For landlords who treat their time like capital and recognize the cost of sweat equity, this tool gives you everything you need to scale. Rent collection, tenant screening, maintenance accounting so that you're organized come tax season, and you can run numbers in preparation for future deals and more,

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I'm here with Ashley Care. We're going to see if this deal works or not, but that's with the current number. So let's just, we're going to press analyze. Whoa. Okay, Ashley, this is a money loser at current rate. So anyone is watching on YouTube can see this, but we ran these through the Bigger Pockets calculator. And what we're seeing is with the current estimates, you would lose $1,000 a month, and your cash on cash return would be a whopping negative 20%.

So what do you do from here? So the easiest thing to manipulate that's not going to screw you in the end is the purchase price. So that's not increasing, rents. It's not decreasing your expenses. It is decreasing the purchase price. So that would be the next thing. I just play with the calculator until I get a number that works. All right. Should we see? There's this little slider that I can drag. Should we see how well we can go? Yeah. Let's see what

it takes to break even with that number. Okay. 250? I don't think 250 is going to do it. No, 250 doesn't even get us close. All right. 225. What do we? got 225 gets us to negative 660 oh man we're going to have to get a long way to go yeah okay 206 doesn't even get us close all right i need to actually go back and edit this we have a little slider but it doesn't go as low as we need to go what do you think should i just put in like 150 yeah put them 150 that'll probably think it's a little cash flow all right let's see 150 and then we need to change our ARV right to like 160. Okay.

Let's see what we got. Still not. Wow. Okay. So that's still not working. That's minus 150. If we go to 125, I bet that will get us close. So 125 gets us to $13 a month.

Wow. Okay. So that means you need to offer less than half of what they're asking for to get this to break. even. Does that discourage you? No, this is where I'm definitely looking at the seller financing option. Like this is where I would go in and manipulate, okay, maybe I'm only putting 10% down. Maybe it's only a 3% interest rate. The last seller financing I did was a year ago and I did that for 30 year fixed at a 3%. So, I mean, that's where I would start is going with the seller financing option. And then I would

keep this option. I mean, he's a savvy investor. So honestly, I think I might give the calculator report. Right. Because like, why would you buy that at $275? It makes, you're going to buy that to lose $1,000 a month. It makes no sense. Should we analyze the seller financing? Sure. Yeah. Okay. Let's do it at 225. Okay. 225. Closing costs pretty low, right, on a seller financing? We should just keep the $3,000 attorney fees. So we'll change, we'll update the ARV to 225 repair costs are going to stay the same. So you think maybe you'll go in 10%. Now we're talking about financing again.

So you probably put 10% down on this. Yeah. Let's see that. Okay. Do you think it would be 20 year term? No, let's do 30 year term. And then keeping rents the same. All of our expenses are the same.

Do you think this is going to work? I don't know. I you know and I when I think about this is to not only will work for me the next thing I look at is what does that monthly payment actually come out to be for the seller because if it like that turns out to be like $300 a month that's like I don't see why they want to do that you know all right update the analysis all right that's basically wow you got it to almost exactly break even we got the other one to positive $13 we got this one to negative $6, basically break-even. I mean, so, okay, not bad, right? And so would you buy a deal break-even? Or is this, I mean, I assume you would need to see something change a little bit here? Or are you basically thinking, hey, this is break-even, but back in my head, that's worst-case

scenario because I know I could probably boost rents over the next couple of years, and that would get us something like. So we already know we could do $250 in a rent increase. And then what were the variable costs? like the repairs and maintenance, the vacancy, things like that. You'd put 8% for everything and you had a 10% management fee in there. Right. So what does that amount come out to?

So variable expenses was 782 a month. Okay. And so the payment to the seller would be $8.54 a month. That's not bad. I mean, I don't know. In this market at that price, I feel like that's a pretty solid payment. Yeah, passive. Yeah.

Max money. Okay. So that's pretty good. So I'm just curious. I'm going to see if you go about, let's see, 230 here in rent. So if you do 2330, what we're looking at here is a cash on cash return of 5%. So once you stabilize it and brought it up, that would get you to 5%. And again, what we're talking about now is a seller financing deal at 225 with 3% interest. So it was originally asking

for 275. So is this like the kind of offer you would make or are you making any other changes here? I think first I'm going to make a lower offer. I think the seller finance option, I mean, I might as well do the bank financing, include the calculator report to show. I think where sellers will give a lot of pushback are the variable expenses. As in because, you know, the expenses he sent me were just the fixed expenses and not taking that into a, you know, into an account. So. Yeah, but an experienced landlord should know better. I'm not saying they wouldn't agree. I would probably do the same thing, but I think you'll have an interesting debate over that. Yeah. Yeah, because it comes out to 184 for vacancy a month. I think 8% is a pretty good number. I like using 8% for vacancy because it's basically one month of vacancy per year.

And to me, that's just like a good way to be safe. Yeah. Maintenance at 184, Kappex at 184. Old house, that seems reasonable to me. Like, I would hold back that much. And I think, too, is one thing we don't know. know is the actual cap-backs needed as in like if I got an inspection, I would want to know what needs to be replaced in the first year.

True. Next two years, over five years. So we may have to even increase that based on what will, you know, do we need a roof in five years too? Yeah, right. What was the management fee? Because that will go back in my pocket, but I always like to. Yeah, 2.30 a month.

So that could really, if you don't manage it, would really help you, especially in the first few years while you're getting things stabilized. Yeah. That would really help. But I was just curious because you said you might go lower on the seller finance. If you drop that to 200, that would get you at current rents, a 3.25% cash on cash return are 90 bucks a month. And once you stabilize it, you could probably get up to, yeah, that's pretty good.

So if you offer 200 at stabilization when you get the rents up to what you think you can get them to, you're talking 300 bucks a month in cash flow. it's like an 11% cash on cash return. That's, that's looking, I don't know what you, your criteria, but to me that looks like starting to look like a good deal. Yeah, I used to like 12 to 16% but that's getting harder and harder. Yeah. Exactly. You too. But to me, you know, if you can get even at 7, 8% cash on cash return on a deal like this, you're still doing better than you can get in other asset classes. Yeah. And this is a somewhat passive investment. for me, I would say, as to like, I've spent a lot of time building my systems, my processes for

property management that to add another unit to my portfolio at this point in time is not very labor intensive or time consuming on my portion. Okay. So you're going to make two offers, right? Or you're going to make one offer two options, right? You're going to do the, or you're just going to send over the calculator report and be like, this is what I need to break even, which was crazy. It was 125. So that's 100.000. 150 off, so less than half. I mean, maybe I shouldn't even, because that's like going to, I feel like very insulting to do. But yeah, would you just say like, hey, I'm going to make you an offer for seller financing

because the bank financing just is too low. I don't, you know, one to insult you for building rapport. And then what do you, would you offer at this like 200 or you think 225? I think I would start out at the 200 and just let them know like I'm open to negotiate. But also, too, I think one thing I'm always. also going to do is there's that duplex he wants to sell right away too. So in presenting this as a package deal, like, okay, I will buy both of them for, you know, 350 and not even say how much is allocated to each one. So like maybe the duplex is a little bit better performing so I can lump those

two together and then he can decide when he closes. And this is what I had done with that other investor I bought the portfolio from, I said, I will buy all of these for X amounts. And we figured out some had a bank loan, some had seller financing. But what we did was he decided how to break them each out. He owned some properties with his sister. And so he's like, these ones, you're buying for $20,000. This one I own myself, you're buying for $50,000. Oh, my God. I'm sure. There is. But I think that's what I would do to, I would have to go and analyze that duplex. And that would be my first step is to just make one offer for both of them and let him decide how he wants to break it off. Yeah, I don't think I can offer more than the 225 for this.

All right. Well, I mean, I'm so invested in this deal right now. Actually, you're going to have to come back and tell us what happens here because I'm so curious what's going to happen. I also want to know for everyone listening, let us know in the comments. If you're watching on YouTube or listening on Spotify, let us know in the comments. we want to know what you would offer. What is your best offer for this exact deal? I want to see how well it compares to what Ashley does and if it gets accepted.

But this is a lot of fun, Ashley's. Thank you so much for coming and sharing this with us for waiting, having the discipline to wait and not analyze this without us. We really appreciate it. I know I used to get so mad at my one business partner because he'd send me stuff at like 11 o'clock at night. And I'd be like, stop doing that because then I don't sleep at night because I have been to know. But I just looked. And just for reference, the investor that's selling it bought this property in 2011 for $110,000. So he's not taking $125.

Yeah. I think that's going to be, that would be a hard pill for him to swallow with all of that. But 200 maybe. That's a lot of appreciation. Yeah. All right. Well, thanks so much, Ashley. We'll have you back soon and hear what happens next with this deal.

It was great having you. Yeah. Thank you so much. And thank you all so much for listening to this episode of The Bigger Pockets podcast. I'm Dave Marr. We'll see you next time. 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 Ian K. Copywriting is by Calico 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.biggerpockets.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

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