BiggerPockets Real Estate Podcast - How to Turn Your “Stuff” Into Cash-Flowing Assets (And Buy More Rentals)

Episode Date: April 20, 2026

How to Turn Your “Stuff” Into Cash-Flowing Assets (And Buy More Rentals)Podcast Description If you could create a few income streams that gave you an extra $10,000, $20,000 or more per year, how would it change your life? Today’s guest has made a habit of turning her liabilities into cash-flowing assets, using everything from normal rental properties to mobile home parks, campers, and trucks to make more money. Stay tuned, and she’ll show you how to do the same so you can reach your financial goals sooner! Welcome back to the Real Estate Rookie podcast! During her time in the Air Force, Kimber Rachuy spent very little time in one place, often being stationed in different states and even countries. This would make real estate investing difficult for the average investor, but Kimber took action wherever her feet were. Fast forward to today, and she has four properties and seven rental “units” in multiple countries. Like most rookies, Kimber has never had millions to invest. But by getting creative with seller financing, IRA lending, and even selling her own vehicles, she’s always been able to scrounge up the funds for her next investment. In this episode, she shares her secrets to long-distance investing, the side hustles that grew her income, and more! In This Episode We Cover How Kimber scaled her portfolio to four properties and seven rental units Real estate side hustles that could help fund your next real estate deal Using a self-directed IRA (SDIRA) to make alternative investments Funding properties without the bank using seller financing Kimber’s keys to long-distance investing (out of state and overseas!) The number one mistake rookies make when self-managing a rental property And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠https://www⁠.biggerpockets.com/blog/real-estate-1267⁠. 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

In 2021, Jesse Walters bought his first rental property, a 20% down turnkey single-family home. But shortly after that, when interest rates went up, Jesse did what nobody expected. He bought even more. In 2022, he bought another rental. This time, it was a value-add property. And then in 23, when rates were 8%, Jesse bought a fourplex that still brought in $3,000 a month in rent. If it worked at 8% rates, why stop there? In 24, he went bigger, flipping it.

four houses and buying two rentals. And now, his biggest deal to date, 11 rental units that he bought in 2025, forget this, zero dollars down. All small multifamily, all affordable housing for his community, and he's going to make a great profit. Jesse has slowly scaled his portfolio now to around 30 rental units when just five years ago, he had zero. Everyone is telling you real estate is impossible to buy in 2026. Prices are too high. Rates are too unpredictable. Today, Jesse's laying out exactly how he scaled, even with high rates, and even when the market was going sideways. What's going on, everybody? I am Henry Washington, host of the Bigger Pockets podcast, and I've got my co-host Dave Meyer here today. What's going on, Dave? Not much, man. Excited for this episode, though. We got a repeat guest who's

doing some cool things in real estate and eager to catch up with him because he's really showing a lot of people what is possible to still do in real estate here in 2026, even though everything's confusing and annoying and sometimes frustrating. Yes, we do. It's always fun to have repeat guests back. It's cool to hear people's stories, but it's oftentimes even cooler to see how they continue to grow and evolve because that is also a part of real estate investments. And so let's get to it. Let's bring Jesse Walters onto the show. Jesse, how are you? Hey, thanks for having me. I'm doing great. Yeah, it's been a pretty crazy last year and a half. And yeah, excited to talk about it. Yeah, so it's been about a year since you are on the show. And for those who may have missed your

episode back then, why don't you give us just a little bit about your background and how you first got into real estate? Yeah, so it really started in 2017. My wife got licensed as an agent and she started growing that career. And I was in the background kind of watching that by curiously. We had a coffee business going at that time, too. In 2021, we bought our first rental. It was a single family home in Columbia. We bought for 165, I believe, but we're 20% down, 30-year, fixed loan, nothing fancy. Didn't know what we were doing. I hung up a mirror in the bathroom, and that's all I did in that thing. And I did that one myself. I didn't even hire it out. Oh, look at you. Yeah. We got that thing rented out for 1,500 a month. And 22, that's when I really dove

into bigger pockets and started learning a lot more. I'm like, all right, I need to do something else here. So we bought another single family. It was on the MLS. Need a little bit of work. Wasn't too bad. We put about $15,000 into it. It was a construction loan.

And we bought that for like $130. And yeah, we got $1.45 in it. Rented that out for $1,500 a month. And then 23, that's when things really started taking off. We bought a forplex that was on the market. It was actually my hometown, about 30 minutes away. And we bought it for 190,000. One of the units was vacant and we bought it.

I put it up for rent. It was like a two-bed, one bath, small town. We put up for 700 bucks a month. And I got close to 100 phone calls or emails, whatever on this thing. I was like, oh, I definitely undershot this. What are we doing here? That's good market feedback, learning something. You underpriced it.

So I guess two things learned. One, I was under market. And then two, there's a very big need in this town. for rentals. I just didn't realize it was that there was that much demand and low so little supply there. So I rent it out at the price I had it marketed because that's I mean I didn't want to go back on my word at that point. The other tenants there, we raised up the rents a little bit. One decided to move out. I kicked that one up to 800 a month. I just kept going up 100 bucks every time until we figured it out. About 18 months into that one, we had all four units turned to that point.

And we were bringing in about three grand a month on it. We bought it for one night. That'll do it. That's awesome. After we got that one done, I really started focusing in that town and buying rentals there and really pushed it. It sounds like you learned a lot about demand in your area at the time because it seems like you were able to buy things add value. And then your rents seem to be sometimes it sounded like even more than you were expecting,

which shows you that there was demand in the area. But I think one of the things that you do well because, you know, I've known you for a little bit of time, is you have a lot of relationships in the area. One, I think because your wife is an agent, but two, because you're from there. Did you leverage relationships to find these off-market opportunities? Or how are you bringing in these opportunities? I guess starting what really helped us was we knew a lender. And he was very blunt with those, you know, just someone like, yes, no, or like, this is a good one or not. And like he was really vital that first rental we bought.

How we find most of our deals now, one is mailers. So last year we bought five properties on postcards. And the rest is like agent referrals or online like investor lift or, you know, Facebook, things like that. And but like I have one agent specifically. He sent me like four or five deals last couple years. Another one sent me two or three. Typically what's happening is these agents, they get a listing. These houses need a bunch of work.

They don't want to put them on the market because they're going to be a hassle. They're going to sit there a while, things like that. And they know I do what I do. And they're very transparent with me. Like, this is what it is. This is the amount of money they need to get out of this thing. And I usually know the price going in. And we just try to meet in the middle and create a win-win for everybody.

And they don't have to go to the market. The agent wins. I pay the agents commission when we buy it as well. So they still get paid on it. And I think that's what really helps snowball it too. It's like, well, the agents know, like, they're still going to get paid if they call me. Yeah. I was literally going to ask, well, how do you get these agents to call you over everybody else? But it sounds like you're making sure that they get the thing that's most important to them.

If they know they're going to get paid and they get the deal done faster, call Jesse. Yeah, exactly. I don't negotiate their commissioning thing. I'm like, I'm going to work in the 3% commission for you right off the top and we'll get it done that way. I think this is just a philosophy people should be embracing everywhere in their investing career. It's just like figure out a way to create mutual benefit. This is exactly what we talk about on the show. But agents deserve to make money, right? Like they were working hard. They're bringing you a deal.

They should make money for bringing you that deal. So going to them and acting like you're going to get their best deals, but you're going to pay them the least just does not make sense. Like it's just not going to work. And maybe it'll work once, but they're not going to call you again next time. I think this is, you know, we talk about real estate being a relationship business all the time. and this is the opportunity for you to stand out, figure out a way to build good relationships

by creating mutual benefit for your tenants, your vendors, your lenders, everyone. Like Jesse's figured out a great way to do it. It's why he's getting great deals. And it's a model that pretty much everyone can replicate as well. I call it speaking to the people in the what's in it for them. When you talk to people, if you can speak to them in the words or the phrases

or highlight the things that you can do, that help them get to the thing that they want to get to, they're going to want to talk to you more. They're going to remember what you have to say. They're going to remember that they want to work with you because you're speaking to them in the language that makes the most sense to them. Agents want to be able to get paid for the hard work that they put in. They want to be able to close quickly and they want their sellers to end up essentially being happy so they can create repeat business. And I think oftentimes when we ask people like, how do you find deals? And they say networking. And that doesn't really sound like a strategy.

But Jesse's telling you exactly how he networks for deals. This is what networking looks like for Jesse. You have to figure out what networking for deals looks like for you. So if we round that out, you're networking, you're using direct mail, so you're sourcing leads. You've got a lender so you know you've got the funds. So really, it's just a matter of analyzing the leads and making the offers so that you can close on the deals. Yeah, correct. And we don't get most of them.

Like, I'm, we make 10 times. Say that again. Most offers I put out there, they say no. Like, it is not like a, I'm just, oh, this house showed up. I buy that one. This house showed up I buy that one. Like, no, it's, I'm going to look at houses any kind of property, you know, multiple times a week sometimes and just like, and it's just no, no, no, no.

I'm like, okay, where's the yeses? You know? About how many offers would you say that you make before somebody says yes, typically? I'll say it's like one in ten probably. Yeah. That's pretty good. That's pretty darn good. It's very interesting and cool to hear kind of how you've grown your business.

It sounds like you really picked up Steam in 2023 and 2024. 2025 was a pretty challenging year for almost every real estate investor I've ever talked to. So talk to us about how your business evolved from 2024 into 2025. So in 2025, just to go down quickly here, single family is a three, two slab built in 2015. We bought it on a postcard. I bought it for $200,000. It was a 10-year-old property. It didn't need much.

It was all cosmetic. Put like 15 in it. Just paint, like, yeah, light fixtures, things like that. And then it appraised at 287, and we have it currently rented out for $2,300 a month. Wow. That's great. And that's a very low maintenance property after that. You know, it's being a 3-2 slab as well.

There's no basement. I don't worry about, you know, basements leaking, nothing like that. So I'll take that one for sure. Another one we did, this was one of my favorite ones I bought. It was a duplex built like in the 90s. So pretty straightforward as far as like construction wise, things like that. So we bought that for 210. I didn't even negotiate that one.

He came in and he's like, I want 210 for it. I'm like, yep, here you go. And we put like 30 grand into it on both sides. It was just cosmetic. And it appraised for 330. Wow. So I walked in almost 90 grand of equity on that one. And it's currently ran out for $2,800 a month on both sides, gross rents.

And I've got 240 in it. And I DCRed that one. So I pulled all my money back out and then some. And it's on like a 5.8 interest rate with a 30 year. Wow. That's awesome. So that one was perfect. Like, it was the best way it could have gone.

I got no money in that one. You did a full burn in 2025? Yeah. Wow. I could not believe. He's just showing off now. He's just showing up. I know.

I got very lucky with that one. Like, I don't, that's the only one I found for sure or some. Yeah, the rest of them kept telling me no. So, so, Jesse, you know, when you're doing these deals, you're finding them in cool ways. Is your preference to do buy and hold or flipping or like, how are you thinking through applying a strategy to the leads that you're getting? I actually learned this formula from Henry. So gross rents minus 30%, and then that pays the taxes mortgage insurance.

If that's like break even or a little bit above, I typically hold it. it okay because it's at that point it's fully renovated and then I don't have much to do for the next few years anyway so and then after a few years I'll reevaluate if I want to keep it or not if it's making me money or something like that because I do it I have equity in all these it's you know in some capacity so I can always sell them later and if if they don't work out I just sell them if they don't cash flow they don't do that which is most of them really I'm flipping them okay generally speaking I'm flipping singles and keeping the multis but it doesn't always number out that way just to be clear I

I know I taught you the number, but I want to make sure everybody understand. So it sounds like you're looking at your property and you're taking rents and you're subtracting debt service, taxes, and insurance, and then you're subtracting 30% for expenses. And if you're positively cash flowing after that, then it's a solid deal because that's fairly conservative underwriting. Then you do the thing that Dave and I have been talking about for like multiple episodes, which is evaluate your deal after you have got it to where it is. performing to see if it is actually performing like you underwent to. And then you can make a

decision whether you sell that or keep that down the road. Is that what I'm hearing? That's exactly it. Yeah, because at the end of the day, there's equity in it. Like, all of these have equity. So it's easy to sell later and pocket some money at the end of the day, worst case scenario. So yeah. I mean, I think that's just, you know, real estate strategy one-on-one. A, you're walking into equity day one, which is what's most important for me in my portfolio as well. Yes, I want it to cash flow. I do. But there are some properties I am willing to break even on depending on location and there's all these other factors that you consider. But I never buy at retail value.

I always walk into equity because the goal is if you have more than one exit, you have a way out. Right. And that's what people who are in trouble in tougher financial times find themselves in a difficult position because they don't have a second way out. Their first monetization strategy maybe isn't planning out like they thought. so maybe that long-term rental isn't long-term renting like they wanted to, and they bought it at the top of the market. Now you find yourself in a place where if you want to sell it, you've got to throw money on the table to sell your property. That's where you get in trouble. So walking into equity and being able to have cash flow as an option is a way to stay, you know, air quotes, safe.

Is it full proof? No. But it is much safer if you can walk into some equity. Better to have some options. All right. This is cool. I think there's a lot of great information in here for people who are either. they're beginning investing or starting to grow and scale their portfolio, getting an inside look at how Jesse was growing and scaling his portfolio.

But I do want to dive into this flip turned flop and we'll do that right after the break. As a host, the last thing I want to do or have time for is play accountant and banker. But that's what I was doing every weekend, flipping between a bunch of apps, bank statements, and receipts, trying to sort it all out by property and figure out if I've, was actually making money. Then I found Baselain and it takes all of that off my plate. It's Bigger Pocket's official banking platform that automatically sorts my transactions, matches receipts, and shows me my cash flow for every property. My tax prep is done and my weekends are mine again. Plus, I'm saving a ton of money on banking fees and apps I don't need

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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? Baselaine changed that. It's BiggerPockets official banking platform that handles expense tracking, financial reporting, rent collection, and even tenant screening, all in one place. It's the system I wish I had from day one. sign up today at baselane.com slash bigger pockets and get $100 bonus. Baselane is a financial technology company and is not an FDIC insured bank. Bank. Banking services provided by Threadbank, member FDIC. Do you ever notice how every passive investment somehow turns into a very active lifestyle,

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It's about building durable, tax-aware wealth over time. Learn more at biggerpockets.com slash bam. All right, we're back with investor Jesse Walters. Now, Jesse was growing and scaling his real estate business in 2025, which is pretty cool because a lot of people were not growing and scaling in 2025. But it does sound like you ran into a bit of a hiccup. Welcome to the club of people who did a deal in 2025 that didn't work out like they thought. So I'm interested to hear how was your flip and did it turn out to be a flop or did you get out by the hair of your chin-chin-chin? The hair of the chin-chin-of-the-chin-is pretty accurate statement, I think.

But yeah. So, yeah, this was a ranch walkout. It was a three-bed, two-bath with a full unfinished basement on it. We bought it for 265. That seems like a higher price point than you normally buy it. It was, yeah. Uh-oh, Henry's red flags are going off. Yeah, for sure.

We bought this thing for 265, and I budgeted about 40 grand going into it. Really is mostly to finish out that basement. and add some square footage. Upstairs was just paint, countertops, flooring, light fixtures, nothing major. I undershot that. It ended up being like 65 grand renovation. And also, we went over intentionally in some ways because the market was turning. And there was another house on the street that wasn't selling.

It was literally right next door. Same exact house. And it was just sitting there. And I was watching this thing. I'm like, well, my house needs to be nicer than that one to sell it. So I'm like, I'm going to put some nicer finishes in this one. So we went 25 over in that. It's set on the market for four months.

So all through winter. We sold it in late January, early February, I think, this year. So I budgeted to sell it for 375. We got it under contract for 373. So I was like, okay, we're okay. We're going to get out of it. I'm still going to make a little bit of money. We're okay.

We get to inspections, and I did not catch it. The deck, it was a double-decker deck. There's a platform in the basement and platform on the mainland. level and that thing was leaning. And that was a $10,000 fix to get that thing. The other thing, too, I was going to do it. But because we already went over budget, I just didn't. And it needed a roof.

I knew that going into it. But I was like, I'm going to try and negotiate this into the deal. Like, after, you know, we'll get it done that way. And it came back. And like, by the time we negotiated the roof and in that deck, I was like, I came out. I think I made $600. Wow. There is a good.

That's two tanks of gas these days. That's not that bad. Honestly, I feel like you learn a lesson and you come out even, which is basically what you did. That's a win in my book. But let's break it down. So where'd this thing go around for you, Jesse? You've probably had some time to think about this. What was the issue here?

They gave me a number that they needed. And this was like on the brink of foreclosure. When you were buying, right? Yeah, I'm sorry, when we were purchasing it. Yeah. So the sellers were, they're like, we're going to lose this in two weeks if we don't sell it. And I was like, one, I need a close in two weeks. And then two, they have to have this number or as the bank just taking it.

So I gave them their number and I fibbed on my own underwriting just to get to their number. So I get that out of a book. How bad? What did you want to pay for it? It was maybe 10 grand above what I wanted to. It wasn't horrible, but it was like. That's a deck. And so it was close enough where I took the deal.

You know, it was like, you know, 10 grand. I'm like, 10 grand. I can flex it. I can be okay here and still do it. So and it got the amount of foreclosure to you because they were in a tight pinch. And I was like, I can actually help them here. For sure. Yeah.

That's hard to not do. Yeah. So like, let's do it. And then the underwriting on the renovation, I wasn't pay attention to the market. It was right when it was turning. And I didn't pay attention to like. Like, okay, I can't just like make this a standard thing. It's a little higher price point.

Like I need to be putting a really nice bathroom in this thing. And like this isn't just a basic reno. It's like I got to have glass shower doors, you know, tile floor to ceiling, you know, things like that to make this thing pop. Every investor who flips a house is going to find themselves in this position at some point where you have to either bite the bullet and put more money into it. And sometimes putting more money into it doesn't mean that you get to take it out. It might just mean that you get yourself back to break even. Yeah. Right. And so it's actually, it is a math problem. And that's where either you having your real

estate license or you having a good investor friendly agent is so important. People think it's only important when it comes to just like, you know, negotiating your sale or it comes to somebody buying. But like these situations are where your agent really makes their money. Because they're the ones that are selling the properties and seeing what people are buying or what people aren't buying, especially when the market starts to turn. There are still transactions happening when a market's turning, but the transactions are happening on certain properties offered at certain price points with certain amenities. And like, you really have to know what those are. So you can try to put your property in that best position to sell when the market is not working in your favor.

And sometimes it does mean you have to bite the bullet. It may be. mean that you have to bite the bullet to spend 20 grand to make the ARV you were expecting to make, not even to make a new higher ARV. And that is a hard pill to swallow as an investor to throw good money at what seems like a bad problem. I've got a house like that right now. I've got to spend $15,000 on a fence and fixing a driveway that I didn't think I was going to have to do in order to sell this house for the exact same price point that I plan on selling it beforehand. That sucks. but it's better than holding onto something that's bleeding you dry. Right, because you're basically making the analysis here, Henry, that you're going to spend

15 grand. But if you don't, it could sit on the market for another three months or four months. I don't know if that would cost you 15 grand, but it will sit. And you still might need to put 15 grand into it four months from now once you learn the less than the hard way, right? Yes. This is true with Burr investing, too. It's true with every kind of value at investing, where, like,

eventually you need to be able to make a call if your plan is working or not. And it's not a fun place to be. And you got to take your pride out of it. Exactly. And that's why I was asking about like the calculation because I really think it's hard, but you got to just do it by the numbers. You have to say, here's what the ARV is going to be. Or if you're a rental property investor, most of the time when I'm doing this for rental

property, I'm trying to get my rents to X, right? And sometimes you like, the market changes. and you see the property next door not renting, and you thought you were going to be able to get that for rent, right? And you need to start making these decisions for yourself. How much more am I going to have to put in? And how much is that going to change my outcome? And is that better or worse than my initial plan?

It's super easy to go on gut, where if you're flipping a house and you go walk a comp that has an open house and you're like, oh, man, they have nicer landscaping. I got to go landscape. Yeah, maybe. But like, how much is that going to cost? How much is that going to change the ARI? Like, it has to come down to the numbers and it can't just be a panic or a gut reaction.

Well, thank you so much, Jesse, for, A, just being extremely transparent with everybody. It's hard to share about deals that didn't go well. But those lessons are some of the most valuable lessons for people to learn. Look, if you're listening to this, nobody's batting a thousand out here. Everybody's done a bad deal or is doing a bad deal currently or will do a bad deal at some point in the future. what's important is what do you learn from those deals that don't go well? How do you not repeat the mistakes from those deals that don't go well? And make sure that bad deals don't take you out of the game. That's really the only way to truly fail is letting a bad deal completely wipe you out.

So it sounds like you were able to get out by the hair of your chinny chin tin. So we appreciate you sharing that lesson. All right. We've got a lot more to learn from investor Jesse Walters. And we'll get to that right after the break. Here's the truth about passive investing. If the strategy isn't right on day one, the returns won't save it. Multi-family real estate offers structural advantages. Many investors are overlooking, including depreciation that can help offset taxable income while cash flow continues. Bam Capital builds its investment with that reality in mind. They are focused on solid operators, tax efficiency, and long-term performance.

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and support our show by saying you heard about Indeed on this podcast. That's Indeed.com slash rookie. Terms and conditions apply. Hiring Indeed is all you need. Local news is in decline across Canada. And this is bad news for all of us. With less local news, noise, rumors, and misinformation fill the void. And it gets harder to separate truth from fiction.

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2025 had some deals that weren't fun for a lot of investors. But is there any deals in 2025 or early 2026 that maybe you're super proud of? Yeah, I've got one in the works right now. A big learning experience, but I think it's going to be really cool when it's done. We bought an old motel in my hometown. And this is the town I was talking about where we underestimated the rents and there's a big demand for rentals there. And so it is a 18-room motel and it has a two-bedroom apartment attached to it, like for the owner's suite or like manager's suite on it too. I think the whole thing's like 6,000 square feet.

And it's kind of like a half-circle building. So it has like a big parking lot in front and things like that. So we gutted the whole thing now. And I underwrote it as a 10-unit apartment building. And I think we can squeeze an 11th unit out of it. Wow. That thing, we bought it for $325,000. The whole motel?

Wow. Yeah. Yeah. What? So it was built like in the 50s. It's like four-sided brick. It's a tank. I'm estimating like a $300,000 renovation on this. So it's, it's a big one. We're building a lot of bathrooms, kitchens in them. But they're going to be small like kitchenettes. I'm projecting this thing to bring in like a little over $9 grand a month in rent. And we should be in it and maybe in the $600,000, maybe $700,000. It's all done. That's a pretty good deal, first and foremost. Second of all, you just whipped up in bottom-moat. Like did this was it on the MLS? Did the agents send it to you? Like how do you get a motel lead? So actually that flip, that was a flop, it was actually right down the road from that house. And I was driving home from that project one day.

And there was a sign in the yard said for sale. And it was actually listed by an agent in the MLS of all things. But the way he categorized it in the MLS, it was weird. And it didn't show up on the hot sheet. It didn't show up on Zillow. Like, it was weird how he did it that way. And so anyway, I called the agent. I knew him.

And I was like, hey, I'm interested in this thing. And it turns out there were two motels for sale when I talked to. It was like, you're the first person to call. Yeah, exactly. No one else has seen this listing. Yeah. So he said, like, well, there's actually two of them. One's down the road from the other one.

I'm like, well, send me both of them. Let me look at them and just see what we're working with here. And the one we ended up buying wasn't even the one I saw after like in the first place when I drove by. I put a 60 day close on it because I didn't know what I was doing. I was like, I need to figure this out. I was like, and I need those two months to like get contractors in there and talk to like I didn't even have to finance and figure it out at that point either when we put on. Yeah, that was going to be my very next question is. How the heck did you find the money for this thing?

Because it's not a traditional deal. So what we're talking about folks is taking a motel, which is a commercial building essentially. and turning it into residential living space, which is technically still commercial because it's more than four units. But that's a different business model than the way it's currently operating. So did you run into any hurdles like that trying to get it financed? Absolutely. It was a big eye opener with banks and me, especially local banks. But like the bank I used a lot for the last couple years, they told me they're like, we want 25% down all cash. And like you can't use collateral.

I'm like, well, that was like 150 grand cash down. I'm like, I can't do that. Like, we're just, I'm going to have to cut it, you know. Like, I ended up going to a couple other banks that were local to that area. I talked to them and one of them was able, he still wanted 20% down. However, I was able to use cross collateralization. Yeah. And I had a property.

It's fully paid off. It's a little condo we bought in 2024. It's fully paid off. and we use that as the collateral. So I'm in this with no money down right now. Wait, so you went from having to put 20-some-odd percent down all cash to zero by making a couple of phone calls? I had to get spiffy and go to banks and like sit in their office and tell them I knew what I was doing. But yeah. Yeah, that was going to be the next question is, did you have to like show them that you had a track record? Like, how did you give them the confidence that like you could pull this off?

Yeah, so that was a big one. They were like, I'd see you've done some flips and you have to some construction background and stuff, but you've never done anything this big. And I was like, yeah, you're right. However, everything we're doing in this building I've done before, it's just more units. It's like, it's the same thing. I'm just, I'm just multiplying it. So it's like, it's not like it's a new territory. It's just more of it.

And that was, once I got that message across to them, that helped them tremendously. And then also the big one too, like it isn't just me like GC in this thing. I brought in an actual home builder and a reputable one that most people know. and he is backing me behind all this. And that was, I think, what sealed the deal with the bank. They're like, okay, this isn't just some random guy trying to, you know, live his dream and flip this thing. He's actually brought in the right people to do it and resources and things like that. What are you renting these out for, like per unit?

What's the goal here? Yeah. So we want to keep it affordable. The way we have right now is eight one bedroom apartments and then three, two bedroom apartments. And the one bedrooms, I'm guessing I can get like eight. 50 to 900 for with including utilities because it'll it's all me it's all on one meter this whole hotel is and then the two bedrooms i think i can get like 1050 1100 and what's a typical two bedroom in that market go for uh the other ones we have there now we're in between 850 and 900 but

without utilities well i think this is a really cool deal a a sounds like it's gonna be a profitable deal but b it's it's the true like real estate win-win you're taking inventory that was sounds like maybe not the best inventory for the community. If the city was so super happy and on board, that typically means, hey, this is a problem property and now someone's coming in. They're improving it, but they're not pricing the community out of the property. You're being able to take something and offer it back to the community at a price point that they can afford.

And like, that's a pretty special thing to be able to do because there's gentrification and then there's revitalization, right? Like you're not offering a product back to a community where that community, won't be able to take advantage of it. You're going to have to bring in some new higher price community. But you're offering it back to the same community in better condition and in affordable housing units, which is not temporary housing. Because I bet you a lot of those air quotes tenants who were in there before were probably staying there long term and just renting by the week for a lesser quality of unit. Yeah, that's exactly what was happening. And a lot of them weren't even paying rent.

Yeah. Thank you so much, Jesse. Before we get out of here, I just wanted to ask you real quick, I know from talking to you before, you've got this pretty unique new construction strategy. And a lot of listeners are interested in new construction. I'm doing my first new construction. But you have a unique spin on how you're able to do new development. So can you just talk to us a little bit? How many new development projects have you done and how the heck are you pulling this off? It's been pretty cool to try this. So the same builder that we're using for this motel project, we partner with him on new construction deals now. So the way we structured this, so last year we did two. We were able to purchase the lots. They're all the MLS. We're not like finding these off-market things or anything. We represent ourselves as agents.

We're buying them with no commission on it. So we're getting the price down a lot a little bit. And then the builder, he is building the house at cost. So there's no builder fee. And then after that, we will list the property in the MLS and we get it sold. We don't take commissions on the sale either. And then whatever profit is left, we split with the builder 50-50 at the end. Okay.

So you're essentially a business partner with the builder. You find the deal, fund the build, sell it, and then you split the profit. So do you have like a numbers example you can share? Yeah. So one, we purchased. These were just like three, two, Slabs. One lot was $52,000. We built the house at cost for like $220 and we sold it for $3.30. So after holding costs, paying the commission to the buyer agent, all those things like that. So we came out with

about a $30,000 profit that we split 50-50. So made $15,000 each. It's awesome. And there's a lot of elements that come into play here because A, the builder gets to build because a lot of builders, they're not great business people. They just want to do what they want to build houses, right? Two, you keep your guys busy. Like, that's the hard part about having new construction crews is if you don't have work for them, your crews go off and find work somewhere else. And then it's hard for you to start to ramp up. So you allow them to keep their guys busy. They don't have to take on the loan risk. They get to build the house. And then it's cool for you is you basically, Sign docs to buy a lot.

You sign docs to close on a loan and then you sign docs to get paid. It doesn't sound like you're doing anything else other than signing pieces of paper. It is much easier than a flip. Yeah, I don't do it. Yeah. I love this is my kind of a message. You just sign a piece of paper? I love it.

Yeah. Yeah. It's like we did an open house. I stood in the house for a little bit. And it was kind of funny. It's like the house was done and I walked in it. I was like, I guess I technically owned this thing. I didn't even realize what it was.

Yeah, I never stepped foot on the job site, nothing. He did it all. And your cash outlay, is it just the cost of the lot, or are you financing that too? It's rolled into the loan. Yeah, it's all under one. That's pretty cool. A lot of people want to build new construction, but haven't thought about partnering with builder. So thank you for sharing how that model is working for you. Before we get out of here, just kind of give us a quick rundown on where your portfolio is today and what you're planning on for the future, other than having a super awesome motel conversion. Today we are sitting at right under 30 doors.

This includes when the motel will be done. Yeah. The current value of everything is right under $4 million. You know, we did one in 21, one and 22, then 23, 24, 25. We both the 30 doors. So, yeah. And are you focused more on continuing to buy and hold, continuing to flip or some other option,

doing more signing of documents and not doing any work to get paid? Yeah, we should close next week, I believe. We're buying three more lots to build on. So I'm going more into that. I will also be doing that. Yeah. So it's, yeah, I'm definitely leaning more into that. But like, it's kind of weird.

We didn't touch this too much. But like, I've actually flipped a couple duplexes here recently. It's because they don't cash flow if I hold them, but I can still buy them at a discount. People pay an arm and a leg for duplexes, don't that? Yeah. It's insane. They do. It's all Picker Pockets fault.

Yeah. The house hacking. That's exactly what I'm doing. I'm buying these older, decrepit ones that need a little work. I get them fixed up. I run out one side. I leave one side vacant and I sell it.

Exactly. That's what the agents are. Now you have to sell one side vacant. That's how you always got to do it now. And so I did a couple of those so far. And like it's a little easier than a single family because I know I can sell them quickly. And I don't know.

That's kind of eye opening to me now. I'm kind of focusing on that. And now these new construction things. So I don't know. My game is changing. in 2026 a little bit, some. Thank you so much, Jesse. I mean, I think this is just a great, like,

real life investor story. Like, you get started, you do some deals, you learn some lessons, you make some pivots, you take some bumps, and then you make more informed decisions as you continue to grow and scale. You leverage your superpowers, which is being a broker, your wife being a broker, and being able to invest in your backyard, leverage your relationships to the max,

and build a business that suits your life. like, this is real estate investment. This is what you wanted to, right? So I love, like, diving deeper into some of these stories and seeing, like, what's really behind the curtain of a real middle America real estate investor. So thank you so much for sharing those stories. Thank you so much for being vulnerable with us and talking about some of the things that didn't work as you planned them.

And we just appreciate you being here. No, thank you. Yeah, I always have fun to talk with you guys. And I say with bigger pockets, I've learned so much. especially getting started and it's been huge for, I appreciate all you guys do too. Well, thank you. We appreciate that. Thank you to Jesse for joining us on the show today. If you think the Bigger Pockets audience could learn from your own investing journey,

you can apply to be on the show as well. Just head over to www.biggerpockets.com slash guest and fill out the form. I am Henry Washington. We're here with Dave Meyer and we'll be back with another episode of the Bigger Pockets podcast in just a few days. 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 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.