BiggerPockets Real Estate Podcast - Replacing His Income with Rentals (in 3 Years!) by “Recycling” Money

Episode Date: July 7, 2025

In just three years, this investor scaled up to making over $100,000 per year thanks to real estate. He did it all starting in 2022 when interest rates were beginning to rise, the market was turning, and many investors decided to sit on their hands. Thanks to a strategy that allowed him to “recycle” his money, he went from one down payment to 16 rental units in record time. How’d he do it? Only in his 20s, Ricardo Adames already knew he wanted out of his career. Working harder wasn’t paying him dividends, so he knew he needed an extra income source. Even after taking a “risk” on his first deal, he was able to walk away with a perfect rental property that only cost him (after all was said and done) $5,000. How’s that possible? Simple—the BRRRR method.  In this episode, Ricardo details this cash-recycling method investors can use TODAY to build a six-figure-producing real estate portfolio, even if you have little experience. Plus, Ricardo shares his exact “buy box”—the properties he’s targeting for more home-run real estate deals in 2025! In This Episode We Cover How to “recycle” your down payment money and scale way faster with the BRRRR method  Why buying below-market-value is the ultimate risk-mitigator in 2025  How Ricardo went from zero experience to doing eight real estate deals at once just three years later  Why high interest rates aren’t stopping you from investing in real estate  Making money even in a down market (Florida!) that most won’t invest in  And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.biggerpockets.com/blog/real-estate-1144 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 investor used one basic real estate strategy to scale his portfolio of cash flowing rentals up to 16 units in only three years. He did it by dialing into his local market to find the best available deals, then repeating a tried and true strategy over and over again. Now, he's transitioned his career into full-time real estate investing. He's generating six figures of annual revenue, and he's building a stable portfolio of rental properties that he can retire off, and he's doing it. it all at the same time.

Hey, what's up, everyone? I'm Dave Meyer. I'm the head of real estate investing here at Bigger Pockets, and I've been investing in rental properties for 15 years. Today on the show, we have an investor story with Ricardo Adames from Orlando, Florida. Ricardo, like a lot of people we hear on the show, was unsatisfied with his corporate career path, and he decided to try investing in real estate. He dove in with the Burr method and was able to use his modest savings to acquire not just one or two rental properties, but scale all the way up to 11 properties in three years by repeatedly recycling the same money. So if you've been hearing that the Burr method is dead, just listen to Ricardo. He only started investing in 2022, but has found multiple great

dears every year he's been investing right in his own backyard. We're going to have a great time talking to Ricardo, but before we get into the show, I wanted to let everyone know that Henry Washington, my friend, and often co-hosts on this show, we're going on a road trip. We are going to be driving around the Midwest and looking for on-market deals. We're going to be talking to investors, meeting with agents, going to meetups. It's going to be super fun. We're calling it the Cashflow Road Show, and it's happening right now in the next couple of days, July 14th to 18th across the Midwest. We're basically driving to markets in three different states. We're going to go to Milwaukee in the surrounding area, then we're going to Chicago, we're going to

Indianapolis, and we might even buy a deal or two of our own on the way. So look forward to the great content that will be coming out on the Bigger Pocket social media channels. Best part of all of this is if you live in one of these areas, Chicago or Indianapolis, we are doing two free meetups, one in Chicago on July 15th. The other one is in Indianapolis on the 16th. We're going to be there, Henry and I giving presentations, talking about local market conditions, it's going to be great networking opportunity, and we have a couple fun surprises planned as well. So if you live in one of those markets, you want to hang out, go to pickerpockets.com slash roadshow to learn more. Again, these events are free, but you do need to RSVP because they're

going to sell out. So make sure to go lock that in right now if you're interested in coming. All right, let's bring on Ricardo. Ricardo, welcome to the Bigger Pockets podcast. Thanks for being here. Hey, Dave. Thanks for having me. Yeah, I'm excited to talk to you. It sounds like you have a really cool real estate story. So give us a little background. How did you first get started in the world of real estate investing? Yeah, sure. So first of all, I'm from Orlando, Florida. So I've done all my business down here. And it's been great to me so far. I started when I was 23 years old. I bought a property here in Daytona Beach, Florida. It was a burr. And from there, you know, I kept going with the rentals. So currently have 11 properties with 16 units. So I've done that in a little over three

years. This year, a little more flip-heavy just to build up some cash flow. Okay. On track for about 24 flips. That's been the model for this year, just makes a little more cash on the flip side rather than relying just on a couple hundred dollars per unit. Okay. Cool. Well, it sounds like you've done a lot in just three years. So we'll dive into how you've found so much success, especially during what has been a higher interest rate era, I'm eager to talk to you about what's going on in Florida. But you said you started at 23. It's a young age, similar to when I got started, how'd you pull that off? And why? Why did you choose real estate?

Yeah, I graduated with the degree in finance. So I was basically behind a computer during COVID as well, working from home, just trading stocks. And I realized it's probably not the lifestyle I want for the next 30, 40 years. So I realized real estate offered a pathway, not just into passive income, but also into a way of me creating my own schedule, being in control of my time, and building my own business that, you know, I could be in control of. So saved up some money, had good credit, and I took a risk, you know, after studying bigger pockets, studying the Burr method, saw which property can fit that, that motto. So we hear this a lot on the show that a lot of people, you know, they just something

wasn't right about their original career and that real estate offers something else. Like, what was it about the lifestyle, you said, of that traditional career that just wasn't meshing with your ambitions, your goal, the lifestyle that you want. Yeah, I think I've always been someone that I'd like to be in control of what I do and of my income. My first job was out of car wash, actually. So I knew I can only make so much there. It was an hourly wage. And I could work harder than everyone else, work harder than all my coworkers, my colleagues, and I would still make the same pay. So real estate offered a way to be in control of my income, in control of my time. I knew as long as I studied and I was prepared at that age, I could take a risk because

what do I have to lose? And I think that's a mentality that even if you're young or older, you know, if you have that mentality, you know, it sets you up for success. It's funny. Most people who come on the show talk about their first deal don't frame it in terms of taking a risk. But of course, every investment is a risk. So how did you evaluate the risk and get yourself to a position where you at least understood

the risk so you could try. and mitigate them. So the Burr book was huge for me. Watching bigger pockets, watching as many YouTube videos as I can. So much goes into preparation before even buying your first deal, even buying your 100th deal. It's a lot of what you do behind the scenes, I feel. So as long as you're prepared, now you can take the jump. So for me, it was looking at, okay, which property can I buy undermarket value? And by buying under market value as a fixer-upper, I was already ahead of the game because if it didn't work out on the rehab, I already bought it at a good price. That's a perfect example of how to mitigate risk, especially on your first deal, right?

If you buy at market value, sure, things can still go well. I've done it before. It's gone well. But if you, especially for your first deal in this kind of market, if you are trying to figure out a way to mitigate risk, this is a perfect example. But I also think Ricardo, you deserve some credit because a lot of people prepare but get stuck, right? They see the risks. They see the up. side, of course, but they're like, oh, man, so many things could go wrong because I feel like that's like this critical juncture where some people tend to overanalyze or overeducate before actually jumping in and acting. So how did that go for you and how did you get yourself to a position to pull the trigger? Yeah, I agree. There's an endless amount of books. Same thing with

YouTube. I mean, there's an endless amount of YouTube videos out there. So yeah, it's an analysis, paralysis like you're saying. It's all about taking the jump. It's not going to be perfect, probably your first time, but you're just going to get better from there. So tell us, about this first deal? What was the profile of the deal? You sound like you bought it under market value, but what else characterize this deal? Yeah, well, it was a cosmetic rehab. I didn't want to get too crazy on the first one with roofing, electrical plumbing, none of that. So I kept it simple. That was something else that, again, mitigating risk, keep it cosmetic. So I bought it for about 150. I put 35,000 into it, which includes your flooring, paint, kitchen, bathrooms for a three-bedroom two-bathouse.

you know, at the time three years ago, you can get it done. And then appraised for about 240s. So trying to follow that burr method. You did bathrooms and kitchens, all that for 35 grand. That's pretty good. Oh, yeah, yeah. You know, I think the contractor, he needed work. After that, he started raising his prices. So yeah, James Dainert, who's on the show, deals with a lot of contractors all the time. He always talks about how you have to have a lot of contractors so that you find the people at the right time. Like if they're in between projects or they're hungry for work, you'll get a good deal. But, you know, when things are going well for them, no fault of their own. you know, like they can charge more because they're in more demand.

And so you need to kind of balance these contractors, which is a really important lesson. So how do you find this contractor? Because it sounds like it went pretty well. That's a hard thing to do on your first one. How did you find and manage this person? Yeah, believe it or not, Facebook. Facebook was a huge resource for me. And it still is.

I actually found the house as well off of Facebook. So it was a wholesaler who posted it on Facebook Marketplace, found a couple contractors through Facebook Marketplace. And one thing I always advise is get multiple quotes. where it's for your roof or your AC, get two to three quotes, you'll have three different prices, and you might have someone that doesn't show up.

Yeah. So I found him, he gave me a good pricing. He was there at 7 a.m. every day, and when you don't have to call someone to see where you're at, that's the type of person you want to work with and have on your team. Okay, and how long did the whole rehab take? Yeah, so the rehab took about 30 days, which that's what I aim for on a cosmetic rehab,

and I still stick to that to this day. From there, it took me another 30 days to, find a tenant and then another 30 days to complete the cash out refinance. Wow. So if you can do a bur within 90 days, that's best case scenario. And it worked out for there because at that time, rentals were in very high demand. And this was 2022, you said. So it sounds like you got 100% of your money out. Is that about right? That's right. Yep. I believe I left about 5,000 in. But again, for the first deal, I wasn't trying to be perfect. You want to be as close as perfect as you can, but I hit my goal of doing a cash out refinance and being able to pull the majority of the funds out to keep it

going. Seems like a home run first deal because you learn something, you built contacts, you got a huge financial return. So there's not much more you could do on your first deal. It's incredible. Were you addicted at that point once you did this and pulled this off in 90 days? Oh, yeah. At that point, I was like, okay, I'm going to do this again and again.

And how many more can I take on at once? The first year, kept it simple, just one at a time. But yeah, once you see it work once, you start building confidence in yourself and it's time to do it again. When you did this first deal, I assume you were still working full time? I was. However, as soon as I closed that refinance and I realized how much I could make on one deal, I decided to quit. And I decided to go all in real estate. Nice. Because I felt if I kept my nine to five, I wasn't fully committed.

I was almost doing real estate part time. So I quit to go all in. And again, that's taking another jump, another risk. What went into that decision? Because I think both paths are perfectly viable. You could stay at a W-2, do it part-time. They're pros and cons, going into it full-time, pros and cons. So was it just, you know, you saw this work and you wanted to do it and felt like you can make more money here, or did you think at all about sort of sticking with the job longer term? Yeah, I mean, I think everyone's chasing more money, right? But aside from that, it's also the lifestyle, like you said.

So, you know, I could have kept the nine to five and then done real estate afterwards, but let's be realistic. Most people after a nine to five, they're tired. You know, it's, it's tiring to work a full-time job and then come home and try to run a business. It's hard. Sure. It's very hard. So at that point, you know, I made the decision. Yeah, I'll leave the nine to five. I have my savings to keep me floating as I make these burs work and as I get into a flip just to build some more cash flow. But at some point, you should decide, okay, let me take the leap if you really want to go all in and build a huge real estate business. If you want to do it part-time, absolutely. It could work while keeping a W-2.

Well, congrats on figuring that out so quickly. Super impressive. I want to talk to you more about how you scaled up because getting that first deal, it is addicting, but establishing scale and doing this over and over again, that's a whole other beast. We're going to get into that right after this quick break. We'll be right back.

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I'm here with Ricardo Adames. We are talking about how he really did an amazing job on your first burr, got almost all of his equity out of it, did it in under 90 days, found a great contractor. Seems like the stars sort of aligned for that. Not just that it's luck. You obviously worked hard for that, but it sounds like you really did a great job. How available were more deals? Because you said you quit your job.

Did you, before you quit your job, know that there was like enough deal flow that you could do this at a higher cadence? Yeah, I was actually getting my deals or looking for deals a combination on MLS and through wholesalers. And I was getting a lot of deals starting to get thrown my way as I was reaching out to people in my market. And I started to realize, okay, the deals are here now. Now I just need to manage them. Just need to make sure the funds are there because I was using hard money lending to get through the rehabs and pulling rehab draws. So that's another time management thing, a cash management thing that if you're not good at, you know, you could burn your through your cash pretty quickly. I would imagine at this point, if you're pretty new to this, you've done one successful one, but now you have time.

The temptation is to just sort of go and do as many deals as you want. But I imagine you have some limitations and capital for down payments and kind of stuff. And there's a limitation on your time. So how did you strategically think about scaling up from that first deal? Starting out, I was putting 20% down with the hard money lender, which that's pretty normal. And you have to be careful not to, okay, let me try to do two or three at once now. Just one at a time because one at the time will still get you there. So it's almost like taking the slower route, but it's going to be consistent.

If you get into too many deals at once and you start going over on budgets and you're running out of funds to pay your contractors, pay for materials, you might get stuck on one now. Now you have to sell the property as is. you know, that's setting yourself up for a loss. So I did as best as I can to stick to one at a time my first year until I realized, okay, the capital is building up. And I realized I was not going to scale to more than one bur at a time unless I started bringing in the flips because that was going to grow my bank account to have more capital. Got it. Because otherwise you're just, you're recycling it. And I mean, if you're timing it really well, you could do four of these a year, right? Because you're talking about a 90-day situation. So let me ask you, if you're just, you're just, you're just, you're

If you did it just at four times a year, with the example of that first deal, would that have replaced your salary from your previous career? I think in cash flow alone, it would have taken about four or five years. So it was going to take time. Then you decided to start flipping at what point. Did you do a couple more burs or was it kind of right away you had this realization? Yeah, I had three burs already done. That was now towards the end of the year.

I realized, okay, not going to live off the burs right away, probably making at that point about $1,000 a month, you know, you'll aim to have $300-something per door. And I was running low on now my living expense funds that I had saved up. So at that point, it's like, okay, let me take a shot at a flip. It's only going to help me build up my bank account to do more burs at once. And it's also going to replenish my savings. And at that time, you know, I was doing what I had to do to make it work. If I had to use a credit card to pay for gas and food, I did it. It's, again, taking risk, but long term, just having that, you know, that mindset it's going to pay off. And how did you think about resource allocation? I think this is one of the hardest things when

you're scaling up is like, you have this finite amount of money. And you want to do the burs because that sort of setting you up long term. You want to do the flips because you need more money to do more burs. So you have this kind of nest egg. How did you think about dividing that between ongoing burs and trying to do flips to try and grow the nest egg and sort of achieve that hopefully exponential scale at some point. If you do four burs a year, let's say, over five years, that's 20 properties. I mean, your equity is going to be at a good number right there after having 20 properties with 25% in equity minimum.

That's making you wealthy over the long term, but it's not going to allow you to replace your income right away. So that's when getting into the flips made sense. and it made sense to help me scale because it's going to build up the capital that I have available. I think this is a really important lesson for everyone listening. There are no right or wrong answers in real estate. But I think for most people, when you're trying to scale up your portfolio, you have these sort of conflicts where you want to build long-term wealth. That's what most of us are in this industry for, right? You want to replace your income. You

want the stability that comes with being a property owner. But it takes a while for cash flow to get you rich, right? Like, it's going to take a while, even if you're super aggressive with it, it could still take a while. And so most people need to find a way to generate what I would call active income. And that can come in either the form of a W-2 job or a 1099 job or through something like flipping. And personally, I'm actually agnostic to it. I think whatever works for you that's going to give you more money to put into those long term rentals long term is probably the right way for you. I've chosen to do W2 because I'm not a good flipper. I've never done it. So it sounds like Ricardo, you're a good flipper and you were able to really start to generate a lot

of income there. But I encourage everyone to sort of just think about this for themselves. If your goal is financial freedom, I know it doesn't sound like working a job. or flipping houses is financial freedom. But you need the capital. You need something to invest. Even if you do the burr as perfectly well as Ricardo does, you got to keep some equity in these deals. Because even when you're refinancing them,

usually you have to put 20 or 25% equity. You have to keep in them. And so how do you build that capital? How do you expand your equity and put it into more rentals? That's something everyone has to answer for themselves. But I think this is a really good example of how, if you want to be full time in real estate, a great way to do it.

So Ricardo, tell us just a little bit about managing this, because how many projects, you know, once you started flipping, how many were you doing at a time? So it grew from about two to three at a time. So now I'm currently, have eight at once. So that's a combination of on market, under construction, or pending to sell. So this is where scaling comes in and knowing how to manage it all and create a good team around you. Well, you mentioned a team, and I'm sure you have good agents and lenders and everyone, but is it just you basically managing and building your?

own individual portfolio? Well, I'm the sole owner, yes. So under me, I currently have a project manager who is in complete charge of the construction. I think that is probably the most important hire you can make when you're looking to scale. It's a lot. You're taking phone calls from Home Depot. You're looking for a roofer, an AC contractor, landscapers. And when you have multiple projects, you know, they can all be everywhere at once.

So recommend to anyone that's looking to scale, that's probably going to be your most important. higher. After that, a transaction coordinator is great, help you take care of any paperwork you have going on, almost like an assistant to help keep you organized. And from the start, I've had the same hard money lender. We've built an amazing relationship where I can send him a deal now, and within the hour, he'll have me approved or tell me, you know, probably overpaying a bit. So I think consistency with who you work with is huge, developing relationships. Because when you know you have to repair a roof or you have to repair a water heater and you know who to call right away. It makes your life 10 times easier.

Oh, my God. The anxiety level just goes down so much once you know, when you have like, I got a garage door guy, I got an AC guy, you know, something like that. It really helps a lot just for your mental state, not only for your, the returns that you generate on your portfolio. Out of curiosity, though, is your project manager full time working for you? Oh, yeah. At this point, yes. Cool. You know, we'll easily have three or four properties at once going under renovation. He also helps keep an eye on what's on market for getting a bunch of showings. You know, as soon as someone walks in, you want someone to be wowed.

And that's, you know, that's an important thing I've learned. Quality matters, especially when flipping a house. Whereas if you're renting a house, you can almost drop the quality a bit. So flipping a house, it's more quality. You want someone to walk in. Just be wild. And you want to be the nicest house on the block. That's what we'll sell the house.

So one of the things I really am intrigued about your story is that, You scaled during a difficult time in the market. You know, you started in 2022. Things are still pretty good then. But 2023 interest rates started to go up. What was that like? Did you have to adjust your strategy? Yeah, it got harder to find burrs.

It got harder to find properties that you can pay a certain price and you'll actually make any money as a rental. If you're breaking even, it doesn't make sense. You're going to have expenses. You're going to have a water heater go bad. Even if you burr it and you do that rehab up front, to take care of the major expenditures, the major repairs, something always goes wrong.

A toilet gets clogged, a kitchen sink is leaking, so you gotta have that in mind. I wouldn't buy a rental if I'm breaking even. You need to give yourself a buffer. And how was it finding those deals past 2023, like with higher interest rates, were you still able to find deals that met those criteria? So you gotta make an adjustment.

So as interest rates rose, you gotta be tighter on your buy box. So you can't overpay. You still got to make sure those after repair values are there. Because that's really the whole idea. How much can you buy this property for? How much do I have to put into it? And is that appraisal value going to be there?

If it's not going to be there, you start tying up your capital. And then that cash that you were recycling start to get trapped. And now you start digging yourself into a hole. So as interest rates rose, it made it more challenging. Currently in 2025, here in Florida, at least, it's getting tougher to flip homes, especially one thing I've learned pretty quick is in flood zones. After these hurricanes, it's hard to sell a house in a flood zone. So that's been a huge challenge and learning lesson for me currently.

Well, I want to dig into that because I think things have changed a lot nationwide, but Florida has some particular dynamics I'm interested in learning about. And I do want to talk to you more about your buy box and like how you've adjusted it and sort of mitigate some of your risks. But we do need to take one more quick break. Stay with us. If you own a large or complex rental property, congrats. And I'm also sorry.

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scaled a really successful business, both doing burs and flips in Florida. And before the break, Ricardo, you mentioned it's getting harder in Florida. Florida sort of has all these unique dynamics. I actually recorded a whole podcast for the on the market podcast about what's going on in Florida. But maybe you can describe for yourself your boots on the ground there. Like what is happening in Florida right now? Yeah, hurricanes. Hurricanes are a big issue. And that leads to insurance issues on top of that. You know, insurance companies have gotten tighter. They see Florida as a risk. We're a peninsula. So we could get hit from a hurricane from any side. And last year, I believe we had two or three hurricanes in a matter of a couple months.

And that was a huge hit to our market, particularly in houses and flood zones. So right now, any house that's in a flood zone, it's a huge red flag. A buyer does not want to buy a house in a flood zone. It's a simple us thinking as, okay, we're just right into hurricane season again right now. And if another one comes around, your house is going to get flooded again. So that's a huge problem right now. And it's causing these flips to sit. So that's one thing I've learned. You're always going to have challenges and flipping houses or

having rentals. And that's one thing I've learned to try to stay away from. And unfortunately, it's going to be an issue as we continue to move into the future. Yeah, yeah. It is one of those issues. And as a result, I should mention that prices are also coming down, right? In a lot of markets, not everywhere in Florida, but Putte Gorda, Cape Coral, seeing pretty significant declines. I think Orlando is like kind of flat. Like, it's not really decline. But how do you think about that? is more significant in Florida. We're seeing bigger correction there in most other places. But I personally believe we're going to see more markets start to see these kind of corrections. So I'm

just curious how you're thinking about this and what you're doing to adjust your strategy to mitigate risk. Are you stopping flipping? Are you stopping investing? Or what do you think? Yeah. How do you keep that balance? So again, I think my rentals are going to pay off big time in a long term. That's building that, you know, that long term wealth. At some point, interest rates are going to drop. When? No one knows. You know, you can't predict the future. But I believe once interest rates drop, that's going to help the market.

Your values are going to stabilize or continue to go up. Historically, if we look at charts, real estate goes up over time. So when you have that in your back pocket, you know long term, you're going to win with real estate owning and holding properties. You can't worry about that. Now, as far as flips, you know, it's fun to flip. It's fun, you know, to make a huge profit on one deal in a couple of months and put that cash in your bank account. But it's risky. It's, it's risky. So I think it's transitioning to doing more of a 50-50 balance instead of going to flip heavy or going to rental heavy. If you have that 50-50 balance,

you kind of keep checks and balances on each part of your business. If you don't mind me asking, have you lost money on any deals in this sort of transitionary market? Absolutely. Well, not just this year, but in the past year or two, I have. I've done about 40 properties in three years. So if anyone thinks they're going to get into flipping and they're never going to lose money, that's very hard to do. You've got to be realistic that this is an investment business and nothing's going to be perfect and you can't be hard on yourself to be perfect. That's one thing I learned with my first loss. Trying to be perfect is just being too hard on yourself and you just learn from it and try to avoid that mistake again. Yeah, everyone I know

who flips says the same thing. And that's just strategy, right? Flipping is a high risk, high reward business. And so as long as your wins, right, the cumulative aggregate total of your wins outweighs those periodic losses, you're still doing well. It's one of the reasons I, I don't know if you agree with this, but I've always been skeptical about people, you know, just trying to flip one house or not really doing it systematically because like I get it. You could do one and try, but like you might just get unlucky on that one deal. Like, even if you have an 80% success rate. If your first one is not successful, that might be like a false indicator that flipping is not good for you, where if you just kept doing it, not only would

you get better at it, but just like odds-wise, you would start hitting a couple more times, and that would mitigate some of those losses. So I totally agree with you that that's just the way some people invest. People do this in the stock market or venture capital too. It's like, you know some of them are not going to work out, but you have to put your money in the game and take those chances to get the opportunities to realize the big rewards. It sounds like you've gotten with the majority of your properties. So, Ricardo, what does your buy box look like now, both for flipping and burr in this sort of correcting unusual market that we're in in Florida? So regarding my buy box, again, I've refined it and perfected it based on my losses as well.

It's learning from your losses again. So one of my losses was on a wood frame house with a crawl space. So I bought that house, thought I was going to flip it. I tore up the crawl space. Turns out I got a code violation from the city. Red tag the door and all my workers had to stop. At that point, they wanted permits and architect plans to completely replace the floor Joyce. It was just turning into a nightmare. So after learning a situation like that, okay, I decided to completely stop buying

crawl space homes as flips. They turned out to be a bit more difficult in the rehab process. So I love concrete houses. I think block houses, especially with these hurricanes, they're stable. they're not going nowhere. So that's a great appealing aspect to buyers, black homes, built in the 70s or 80s or newer. And I don't mind a location. As long as it's a location where people are moving to, nothing too rural. I think that's the key in Florida. I think for buyers to be able to afford a home, they'll kind of move where they have to move as long as there's still schools and job opportunities

in their market. Because Orlando's huge. You have Orlando right in the middle or Florida's huge. you can go to the East Coast, West Coast, or you go down to Miami where it's even more expensive. But another big part of my buy box is also catering to first-time home buyers as well. So if it's a buyer that can move into a home, that's a 3-1, a 3-2, it's perfect for them.

That's really where I started out in the 2-300 range. And now as I gain more experience, you know, I'm dipping into more higher valued properties. And are you doing anything in particular to mitigate risk? Because, I mean, that buy-box makes a lot of sense to me. But, like, is there anything tactically that you're doing differently now? out, you know, other than the crawl spaces.

Have you readjusted your numbers, the targets you're looking for in terms of return or anything like that? I think I'm catering more to the buyers. I think, of course, everyone needs a place to live. Majority of people would rather own than rent. However, if they can't afford it, they can't get into a home that they can make their own. So as closer to affordable, I can keep it, which what does that mean? If you could buy a house here in Florida in the 200s or low 300s, that's affordable.

Okay. And if you put that on market, people are going to be jumping on it. And I think it's great as an investor to be able to put a family in a house that they're going to move into for the first time instead of renting. And on top of that, you know, it's a fully renovated home, most likely with the new roof, new AC, that for the next 10, 15 years, they're not going to have to worry about any major expenses. So that's been my biggest key.

Of course, I know what works for me. Blockhouses are great. I also keep in mind who I'm going to cater to, who are my. buyer is going to be. What about your goals, Ricardo? You've had a lot of success. You're doing both of these things. Is there an exit point you're looking for or a specific number you're trying to get to in terms of properties or cash flow or net worth? Yeah, I think there's always going to be a never-ending number that you could chase. But I just want to build the business to a point where it's giving me a comfortable lifestyle while maintaining that balance between the flips and the rentals. I think the cash flow

from rentals is very up and down depending on your monthly expenses. So the flips kind of comes in as that active income to keep you steady and keep you living, you know, the lifestyle you want to live. Long term, I would love to get into commercial. I think building this single family portfolio is kind of like a stepping stone into commercial. Once you own these properties and you have a high number of equity, you know, you could really start playing monopoly almost. How many, you know, let me sell a couple houses, get into a eight unit, a 10 unit. I think the 1031 exchange. is a great opportunity as well. But that's something every investor should be utilizing if they're buying and holding.

Well, Ricardo, thank you so much. Congratulations in all your success. Sounds like you've built a really incredible business at a difficult time in a difficult market. And I think this just goes to show everyone listening right now that these kind of deals, this kind of reality is still possible in real estate. You still can build the business. You still can financial freedom if you adjust your strategy, if you think about it

critically, if you prepare yourself, all the things that Ricardo just talked about can still make these things possible. So, Ricardo, thanks so much for coming on and sharing your story with us. Thank you, Dave. And thank you all so much for listening to this episode of the Bigger Pockets podcast. I'm Dave Meyer. We'll see you next time. Do you ever notice how every passive investment somehow turns into a very active lifestyle, active spreadsheets, active phone calls, active stress? Here's a better question. What if you could buy brand new construction homes, 10% below market value in the best markets across the country without making real estate your second job. That's exactly what rent to retirement does. They're a full service, turnkey investment

company handling everything for you. In some cases, investors get 50 to 75% of our down payment back at closing, plus interest rates as low as 3.75%. They've partnered with BiggerPockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more.