BiggerPockets Real Estate Podcast - Sleeping at Work to Build an 8-Unit Portfolio in America’s Most Expensive City

Episode Date: November 17, 2025

Ben Chester had no money. In fact, it was worse—he had $120,000 in debt. He was sleeping at work and renting out his own rented apartment just to survive in America’s most expensive market—New York City.  Now, six years later, he has eight rental properties, is debt-free, and even owns Billy Joel’s former residence (yes, you read that right). If you’re living in an expensive market and think it’s impossible to invest, Ben has the formula for you. He turned very little money into a one-bedroom apartment empire—buying whatever he could in New York City, knowing it would all be worth the sacrifice. He’s split these small apartments into multiple rentals with up to four tenants, allowing him to make the numbers work even when everyone else says it’s impossible. But that’s not the best part. After unlocking a tax “loophole” when buying a lake house, Ben is now able to offset 100% of his W-2 income taxes, meaning he often gets a check back from the government every year, all thanks to his real estate. Thought it was impossible to invest in markets like New York City? Ben is about to make it a very attractive option. In This Episode We Cover Turning a one-bedroom apartment into four living spaces with multiple roommates  The astonishing price Ben is paying for these tiny rentals (and why they’re worth it) The tax “loophole” that regular real estate investors can use to offset all of their income  Buying (and renovating) Billy Joel’s house! Yes, Ben actually did that  How to finance your home renovation when you don’t have the cash (0% interest)  And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.biggerpockets.com/blog/real-estate-1201 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

Do you think living in a big, expensive market means you can't invest in real estate? Think again. Today's guest works at demanding travel-heavy day job. So he's building a rental property portfolio as a backup plan, and he's doing it in and around New York City. This is not a story of an already rich person buying properties in cash. It's about using hustle and persistence to build towards financial freedom even in one of the country's most expensive market.

markets. Ben was even willing to sleep in the office he was working in to kickstart his investing career. And although that type of sacrifice isn't for everyone, it might just be for you. Hey everyone, I'm Dave Meyer, housing market analyst and head of real estate investing in bigger pockets. Today we're bringing you the story of an investor named Ben Chester. And I'm super excited to talk to Ben because he's one of the very few people I've ever met who's doing basic rental property investing in New York City. And Ben isn't buying giant apartment buildings for millions of dollars. He's also not buying really risky properties in suspect areas. He's found a way to acquire one-bedroom apartments that cash flow in some of America's most expensive zip codes.

So on today's episode, Ben's going to tell us the exact formula he, he, that makes these deals work even when starting with six figures of debt personally that he had. He'll tell us the story of how he turned Billy Joel's house, yes, actually Billy Joel's house into a cash flowing investment property, how he can offset almost all the taxes from his W-2 career with real estate investments, and he'll give us his advice for other investors who want to stay local but live in hyper-expensive markets. Let's welcome Ben. Ben, welcome to the Bigger Pockets podcast. Thanks for being here. Thanks so much for having me. All right. Well, let's jump into your backstory a little bit. Tell us a little bit about the circumstances that led to you getting started as a real estate investor. Yeah. So like a lot of people, I graduated school, didn't get the best job was making $30,000 a year, which in New York City is basically the poverty line. And I was spending all my time at the office, but all my money was going towards rent. So trying to run this experiment where I actually decided to secretly move into my office full time.

Okay. Where were you working? So, I mean, when I say office, it wasn't too bad. It was actually a sleep clinic. I was doing medical research for pharmaceutical trials. Oh, okay. So there were beds. There were beds, yeah. And, you know, the beds were not always 100% occupied.

So there's a lot of nights where I actually had a pretty cozy hotel room in like Midtown Manhattan. Wait, were your employers aware of this experiment? No, they thought I was a hard worker. So, this is 2012. So, you know, shortly after I got the job, Hurricane Sandy hit. And I was the only one that actually showed up at the office that day. So they thought I was a super hard worker. They're like, oh, my God, Ben came in despite like Armageddon, the hurricane.

Turns out I was just living there, so I had nowhere else to go. But I got promoted and kind of moved up pretty quick after that, which was awesome. As far as I know, there's a first time hearing this on the show. I feel like that's something you see on TV or in a movie where someone like moves into the office to save money on rent. But you really did it. So you gave up your apartment? Like, you need to know how you pulled this off. I was in a lease.

So I couldn't actually just like pack up and leave, which was my original like desire to do. But because I was on the hook for that rent, I actually put it up on Craigslist and started renting it out, furnace rental, you know, stay as long as you want because I thought I needed to cast a wide net to get to get someone interested in to rent it. But there was like crazy demand, actually, for a furnace flexible housing there. And so I kind of hung on to the job as long as I could at the sleep clinic. But that experiment kind of ballooned into an actual like full-time, massive business where we got venture capital investment for it.

And we were trying to pitch it as a tech company to get the better valuation. But what ended up happening was like we were getting crazy. pressure to grow super fast. And so we're taking on lots and lots of inventory. But those of you are like, you know, in medium term rentals or any seasonal rentals, it's like very ebbs and flows in terms of demand. So we would grow crazy quick and then have like these big troughs of vacancy, which ultimately killed the business. I actually left that business with over like $120,000 worth of personally guaranteed debt that I put under that business. And it was gone. So I was basically starting from nothing with like, I mean, less than nothing. I had 120k a debt that I had to recover from.

Oh, wow. What a roller coaster. I mean, What do you do at that point? Yeah. So, I mean, it was pretty devastating. Not only that, like, it was the debt, but also I had spent, you know, years of my life building this business and it basically imploded. So you needed to basically figure out how to survive. I didn't want to leave New York, which was like my dream was always to live there in the first place. So I definitely didn't want to leave the city, which I think a lot of people end up having to do.

And so what I do is, I got a W2 job because I really had no other choice. I had to do it just to pay off this debt over time. And then I also got an apartment because I had this whole skill set of like, you know, how to rent apartments. I knew how to kind of work with landlords in the city from that experience. So I found a one-bedroom apartment with my girlfriend at the time. We moved into a one-bed, and then we had the landlord reconfigure it to basically turn it into four. It was like, you know, I'll call them rooms, but I use that really- Spaces in New York.

Yeah. Yeah. Yes. And then we rented, you got three roommates. So it was my girlfriend and I, and then three roommates. And so we have five people in a one-bed, one bath. But what was great about that, and we did that for about a year and a half was great is it covered all of our housing expenses.

So we literally weren't having to pay to be there. We just had to coordinate roommates, which can kind of be a pain, but it was worth it. And then all my W-2 income was basically going towards paying off debt and also a little bit towards retirement and stuff like that. You know, I grew up in the New York City area. I understand what you're talking about when you said a one-bedroom just magically turns into four bedrooms. But maybe you can explain that to people who aren't familiar with that.

That particular one we had actually, the super was also a contractor. And he like built like temporary walls basically. So it was actually, it felt nice. It was actually, you know, sound privacy and stuff. A little small, but, you know, it was livable. And then there's other situations where, like, there's one where I literally lived in a walk-in closet with my co-founder. What?

This was prior to that, but when we were launching the first business, we lived in a duplex on Fifth Avenue, which was, like, amazing, beautiful, beautiful place. But we rented the rest of it out, and then we stayed in the walking closet together. Unbelievable. I love it. All right. So you sort of got back on your feet doing this strategy. It sounds like something you knew.

from the business you had started, like kind of replicating that for yourself personally. Did you then at any point scale to a traditional real estate portfolio? Or did you just keep doing this kind of hustle mentality going forward? Well, the goal all along was to basically do this just to get out of debt and basically graduate to the next level, which was going to be ownership. And so I saved up about a year and a half of saving and paying off debt aggressively to get to the down payment. One thing that's really helpful when you mentioned finding a job that you can live in,

One version of that a lot of people have access to is a travel job. So if you're in a job where you're getting put up in hotels and they're paying your expenses, which that was, I was able to not only get my rent cover, but also I was able to get food. And it wasn't spending a lot when I was on the road. So a combination of that, I basically aggressively put close to everything towards saving for an apartment. Got my first down payment, moved into a New York City co-op, which is not easy to do. Got rejected from a few because they had seen my history with all these apartments I had. And the press from having this business.

They're like, are you going to do this in this apartment? I was like, no, no, no, no. But which I wasn't, I wasn't trying to build, like, a new tech business there and, like, you know, bringing strangers and all that. But, but what I did do is I found a one-bedroom apartment in, and I say one bed, it was basically a closet in hell's kitchen. You probably know it's, you know, and one of the grungier areas in 2019. My girlfriend moved in. Also, my brother moved in. So we had three people now, which was felt like luxury.

We had our own place. We're spending, like, probably $750 each to live there, which is super cheap for New York. Like, that's unheard of. The principal payment on every single, like, more. mortgage was about the 700. So, like, I was pretty much, like, from a net wealth perspective, like breaking even, even though I was paying into it now, I was paying off that mortgage. I was, like, at least neutral on housing. Okay, everyone, we got to take a quick break, but we'll have more with Ben right after this. So I found this thing called the Lenar Investor Marketplace,

and honestly, it's kind of genius. It's built by Lenar, one of the top home builders in the country. And it's a new platform for investors who want turnkey new construction homes. These are professionally built, pre-inspected, and rent-ready from day one. You can browse properties across more than 90 markets. You can see verified rental comps, neighborhood data, and even handle financing, title, and insurance all through Lenar's in-house network. It's everything you need to make data-driven investment decisions in one place.

Go to biggerpockets.com slash lanar and explore the homes available right now. You've upgraded how to buy properties, but did your insurance get the memo? When investors start scaling, insurance can't be an afterthought. Most policies were designed for a single property, not multiple rentals, LLC ownership, short-term stays, or properties mid-rehab. That's where blind spots can creep in. NREG works exclusively with real estate investors. They understand portfolios, how risk compounds as you grow,

and why insurance should protect your upside, not just a checkbox. One uncovered claim can undo years of progress. Before your next acquisition, review your insurance. NREG and get investor-specific coverage from specialists who actually understand real estate at NREG.com slash BPPod. That's N-R-E-I-G.com slash BPPod. 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 their 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. 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, and 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 Bigger Pockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more. Have you ever lost a DSCR deal because the financing just took too long? Red flags popped up late. The lender needed more time. The deal fell apart.

Well, our friends at Dominion Financial just launched a program to help prevent that. With their new Express rental loan, you can close in 10 days or less. And they still offer their price beat guarantee. So you can get great pricing and a timeline you can count on. Fast, simple, reliable. That's Dominion financial. Check them out at biggerpockets.com slash dominion. That's biggerpockets.com slash dominion.

Welcome back to the Bigger Pockets podcast. Let's jump back into my conversation with Ben Chester. I'm curious, though, because this is a common question that I get a lot and I think is pretty common in the real estate investing community, whether it's New York or L.A. or San Francisco or any these pretty expensive markets. Why did you choose to buy a home versus, say, continuing to rent and investing in either midterm rental, short term renters, whatever you want, somewhere else, if you wanted to get in real estate. What about this approach made sense to you? I had no idea. I just knew, like, I just need to buy real estate. And so the first step was, I got to live somewhere.

Like, if I can find a place I can hang on to. I also viewed as, like, every month, or every year, you know, landlords are raising rents. So there's always this kind of like unsettling feeling. If I want to stay in New York forever, there's a chance that I could get priced out. Like I won't be able to afford here if I'm renting. But if you buy, you're pretty much locked in. Like, of course, like co-op fees can go up. But it's not like a landlord raising rent on you.

So if I could just lock in a place and have a 30-year fixed rate, and at this point is still below 3% too. I knew I'd be set basically where I could make sure at a minimum I'd be able to afford New York as long as I wanted to stay there. Oh, that's great. Okay. I like that approach. And so it sounds like that worked for you.

So it was fantastic. So this is, again, this is 2019, the first apartment. Basically locked in. I viewed it as like, I'm set. Like, I'm going to be able to stay in New York no matter what. And then COVID hits. So meanwhile, I'm like still making W2 income. I'm still traveling all the time.

So I didn't really care if my living conditions were terrible. Like I was like, as long as I have a place back in the city to stay in, it's okay. But I started looking as like, you know, the world's changing right now. If things, interest rates are still pretty low at this point. I actually started looking in Texas. And I discovered that like I would. save on taxes if I moved to Texas during COVID. I also could find a lot of really great quadplexes and houses there that would basically cash flow if I bought the old fashioned house hack. You move into

one unit, rent the other three out. You can basically cover all expenses. But then with the tax savings on my W-2 income, I actually would come out ahead even if that property only broke even. So house hacked with a friend there for a short period of time during COVID. It was like a great experience. Did you know what you wanted to buy? Like were you looking for a duplex or are still just doing the roommate thing. I had no money still because everything was still going towards. I had some of that debt left and also was still like not making any cash flow. So all the income that's coming in, I was saving it for a down payment. And at that point, I had like only maybe like 20, 30,000 dollars saved up. And my friend was in a similar boat, which is enough for a down payment.

So we ended up using an FHA loan, which now you can do this with a conventional 5% down, which is amazing. But we used a 3.5 with a higher interest rate FHA loan in Dallas. And so we paid, it was like $30,000 to $40,000 total to get into this property, cash flowed from day one with the unit that we were living in. And it basically, like, created a springboard where the tax savings, even though it was, it was like making a small amount of cash flow, it was just we were saving on taxes. And then on top of that, we were also basically able to start to build equity in there and get the tax benefits and everything over time. So what was the place like? Tell us about it. So it was a quadplex. Still have it today. It was four units all next to each other.

Basically like four townhouses in a sense, all combined under one roof. So it was super nice. It was an area in Northwest Dallas that was appreciated a bit and then became a good source of income and also for like, you know, tapping in for equity for some of the later purchases that I ended up making. And what happened after that? You left Texas or what was the next move? Yeah. So now, you know, rates are starting to move back up at this point. And so I had basically acquired a couple properties. I had with this one in New York that had a rule where you could rent it out after a certain period of time. So I got it as like a long term rental. And then I was going back to New York and looking for another place to live. And so. acquired another co-op through a similar method. This time I was with my brother, who was going to move to New York for residency, and also another one who's an architect, two of them. So we're all going to basically live in a place that I could find together and kind of house hack,

which we did. And now the snowball is really starting to take off. And so every couple years, I'm getting a new apartment in New York. And then I'm also starting to get enough cash where I can start thinking about down payments outside of the city for, like, more conventional rentals. You're pulling off something that's pretty tough, which is by most people who struggle to just pull off a single acquisition. in New York.

Yeah. But you're pulling off multiple. So when you move back from Texas, what is your financial situation like? Are you making a lot of cash flow off the other two rentals? Is that helping you with the down payment? Or how did you actually finance this third purchase? Yeah. So the main thing I'm always looking for is just like I want the property to break even.

Because keep in mind, like I'm planning to keep this W2 job. So I have enough money coming from that. If I can break even on the properties with conservative underwriting, like, you know, I don't want to expect miracles or anything. But as long as a conservative will break. even with the tax benefit's appreciation, I'm happy. So at this point, there's not really much cash flow sitting off the properties. Everything's breaking even. And there's enough like for reserves. So like, you know, lose a water heater or stuff. Like I can handle that without flinching.

But I wasn't like, you know, living off of it at all. What was good, though, is I had this W2 job. So I was having enough where I was getting a little bit of savings starting to go. So there were some creative strategies you can later use to tap into those retirement funds. But basically, I was, I was coming back to New York with enough to put down a down payment on another co-op essentially. Do you mind sharing us with us the price point of these new co-ops? Yeah. So at this point, I'm still looking at entry level, so like half a million dollar range, which is entry level for New York. That's not as bad as I thought you were going to say. Because that, I mean, that's close to the median home price in the U.S. right now. That's not like crazy New York pricing where everything's $2,000

a square foot. This is true, but keep in mind, these are one bedroom apartments with like something wrong with them at that point. Like sitting up there. Right. You're not getting the luxury apartment of 500 grand. Like the toilets in the living room. Yeah, exactly. Like, there's something like not quite right about the place. All right. So you're back in New York.

You had your stint in Dallas. And now have three properties. Sounds like six units. Where do you go from there? Still buying more in New York City? Basically looking for anything. So again, I don't really have a form strategy yet.

I kind of dabbled in like New York and then multifamily. So I was kind of looking everywhere to see what would stick. The problem was in New York City was getting harder and harder to find those units that would make sense. Not impossible. There's still, and I actually did end up buying another one, we could talk about later, but I was still just looking around New York at this point. One thing that happened, too, is I got my license as a realtor to try to basically

stretch the money further. I was like, if I can get paid a commission at the same time of acquiring these, it kind of offsets the acquisition costs. It could be a good strategy. And I started to look around MLS and then also just on Zillow everywhere around Manhattan. Manhattan wasn't making a lot of sense. And also, like, the cash flow, it's not very interesting. Even if you could find something to make sense, it's still just break.

even. So I started to expand my search in one hour radius of the city. And I found a lot of really interesting waterfront properties, particularly where they'd be like, you know, same price point, half a million dollar houses. Needed work, right? They're not like, you know, beautiful, ready to go houses, but they're on amazing pieces of land. Are these far from the city? Are they vacation destinations? What kind of locations were you looking at? So I knew that the property themselves, as long as they're close to the city, I felt like people would probably go as long as the house was a destination in of itself. So to me, I was like, you know, my friends and the people I know, like, they probably would travel an hour to go to like a lakehouse. And it doesn't necessarily

matter where that lakehouse is as long as it's nice and off. And it's like accessible. You'll probably get eyeballs there. And it was kind of just a gut thing. There weren't any comps at the time. There wasn't really any sort of clear data that it was a good decision. I was like, I think we can make this work. And your plan was to renovate them, though, because it sounds like you hadn't really done that yet, like at scale. Like you've done kind of like putting up these walls. But now you're talking about taking something. that's not very nice and turning it into a destination. That's like a pretty big shift. It was massive. It was way more than I expected too. And at this point, I started listening to

bigger pockets where it's always about like value ad and people are dealing with contractors and stuff. So I'm like, okay. Like, you know, it seems doable. But oh my God, it's like way harder than you think. And also I had no idea how to price out properties either, like renovations and rehab. So but I did know that this was a beautiful lot. I found this lake house that was on like a double lot on a lake that was within an hour of the city. And it's just like, okay, it needs a new probably need some updates to like, you know, general updates the outside and like some safety stuff, electrical, like, you know, way more than you normally like get for a normal house. But like it was lendable. I could I could basically finance it. And I was like, you know what,

worst case scenario now, I have enough W2 income coming in that even if it takes longer and it implodes, like I can at least sustain the mortgage on this and have it like worst case scenario, like I could just rent it as a long term rent. How about financing the furnishing? Because that I, I joke about this other show, but I think the worst underwriting mistake I've ever made in real estate is just like totally missing how much it was going to cost to furnish short-term rental, especially if it's like a big one that you're trying to make a destination because you got to spend money to make it cool. You can't just throw Facebook marketplace stuff in there. How do you pay for that part of it? Yeah. So actually, this is another creative financing trick that I found along the way,

almost by accident. Like, I know you've mentioned before on previous shows like the 0% credit card hack with like you can get a 0% intro APR on a business credit card. Well, so I basically did that and I was thinking like, you know, I got like a 20K limit on the card. So I was like, okay, that's great. At that point, I had a new LLC for every single property that I had acquired. So I had a couple LLCs with cards that I never used 0% intro on, but they had credit lines. And a cool hack that you can use, at least with Amex and Chase is you can actually take credit lines from those other businesses and put them onto the 0% card. And it's free. They let you do this. You just call them up. It takes like six minutes. So I turbocharged that.

that intro 0% card to basically fund the entire rehab. And so I didn't pay any, I think between 12 and 18 months, I didn't pay anything at all in terms of interest. I just paid it off by the end. All right. Time for the disclaimer, though. This is a great idea if you can pay this off. Like, using this kind of loan can be a very effective strategy.

I hear people do this most commonly in short-term rentals. I think this is kind of a common approach to doing this, getting the 0% interest. It's a way to get pretty much free financing. But if you don't have a plan for repaying that back, and it's got to be a good plan, this can be really dangerous. So it is one of those things where you kind of want to use these when you don't really need it. If you are like, I'm banking everything on using this 0% interest-free credit card, I wouldn't do that personally if I were you.

Like Ben has a W-2 job. He has other resources. He has other assets so that if something goes wrong, he can take care of that. We talk about this a lot on the show. There are different kinds of debts. There's good debt. there's bad debt. Credit card debt is bad debt. If you're not paying it off, that is super expensive debt. It can really snowball into a trap. So you just want to be careful with that. But again,

if you know what you're doing and you do it carefully, it can be a good option for you. So how this one work out? It's a big shift in strategy. Yeah. So I bought the property for a little over 500K, ended up expecting 30K, 40K total to put into it. That was a new bathroom. Electrical updates I didn't even realize were that severe that ended up being more complicated than I thought. And then I put a new HVAC system in. It ended up costing more like 150K for like all the rehab plus the, plus the holding costs, plus also the furnishings because I overbuilt it more than I needed to. And also like I did, I probably did more work than I really had to.

Okay. But as a result, it ended up being, and again, my goal is just to break even, but it ended up cash flowing a ton and it ended up being like a really amazing like entry point into the Airbnb market around New York City. How are you managing it? Did you do all the stuff yourself? Yeah. So I was doing it myself just by default because I was like, maybe I'll put a manager

and eventually and I started like interviewing property management companies. But through bigger pockets, I actually stumbled upon the short term rental loophole. And I was like, you got to be kidding me. Like this can't be real. Like this is unbelievable. Yeah. And so I read the books on it. I like I went through like three or four different accounting firms until I found one that

was like, yeah, let's do this. And so basically as long as you're working in W2 job and you're self-managing your Airbnb, you can take the losses, including depreciation, including like any bonus depreciation that you're using, which could be substantial. Take all that and apply it as a loss against your W2. And come to effectively, you can get close to paying no taxes, which is insane. That's when I was like, oh my God, this is the new strategy. It makes sense. I'm going to keep my W2 job. I'm going to acquire as many Airbnbs as possible. And just to make sure I'm maxing out those losses every single year on paper.

So I can basically offset my taxes. I remember I started out thinking I want to control my housing costs because I thought that was the biggest expense that person would have. But really, like, the biggest expense no one thinks about is actually the tax side. I'm like, this is a game changer. Not only am I not really paying for housing, I could also completely like undo my taxes or not have to pay them and offset them if I, if I do this the right way. Stay with us. As we take a quick break, we'll have more with Ben right after this. There are two kinds of real estate investors, those who have reviewed their insurance and those who think that they have. Most don't realize their coverage wasn't built for how they actually invest.

vacancy periods, rehabs, short-term rentals or LLC-held properties. These gaps surface only when filing claims. That's why investors work with NREG. They specialize exclusively in real estate investors, understanding portfolios, risk at scale, and cash flow protection. One claim can erase years of returns. If you own a rental property, don't assume you're covered. Have NREG review your insurance with someone who gets investing at NRE.com

slash BP pod. That's NREIG.com slash BPPod. People love to call real estate passive income, which is interesting because most of the investors I know are very busy. Busy finding deals, busy managing teams, busy worrying they pick the wrong market. Rent to retirement flips that model. They help investors buy turnkey new construction homes, often 10% below market value in top rental markets across the country. Their local teams handle the build, the property management, and the details, so you don't have to. In some cases, investors even receive 50 to 75% of their business.

down payment back at closing, and there are interest rates as low as 3.75%. They've been trusted partners with BiggerPockets for over a decade. And if you want to learn more, visit BiggerPockets.com slash retirement. People love to call real estate passive income, which is interesting because most of the investors I know are very busy. Busy finding deals, busy managing teams, busy worrying they pick the wrong market. Rent to retirement flips that model. They help investors by turnkey new construction homes, often 10% below market. value in top rental markets across the country. Their local teams handle the build, the property management, and the details, so you don't have to. In some cases, investors even receive

50 to 75% of their down payment back at closing, and there are interest rates as low as 3.75%. They've been trusted partners with BiggerPockets for over a decade, and if you want to learn more, visit BiggerPockets.com slash retirement. New Year, Clean slate, and maybe a vacancy that needs to get filled fast? That's where a veil comes in. With Avail, rental listings can be. be published to 24 top rental sites with one click, completely free. That includes places renters are already searching, like Realtor.com, Apartments.com, Redfin, and more. No copying and pasting. No juggling multiple platforms, just one listing that shows up everywhere. If getting rentals organized and filled fast is on the list this year, start with Avail. Sign up for free at Avail.co.com slash bigger pockets.

If you think property management is expensive, try mismanaging. a vacancy or an eviction or a maintenance issue that turns into a five-figure problem because no one caught it early. That's expensive. A good property manager isn't overhead. Their protection against small mistakes turning into big losses. And that matters more than ever in this economy. That's why I like Mind. Unlike other property managers, Mind manages your property like an investment. They obsessively measure the things that matter for your bottom line. Things like occupancy, delinquency and net promoter score, and they have the results to prove it. Go to mine.co slash show me to see how mine performs and get your first month free, which is

much cheaper than learning the hard way. Welcome back to the Bigger Pockets podcast. Let's get back into my conversation with investor Ben Chester. I think this sort of journey and evolution of philosophy and strategy about investing is common, that you don't really start for the tax benefits, but eventually you get to a point where you realize that if you maximize your tax benefits, it can significantly increase your returns. I'm not talking about like 1% or 2%, it can make 5, 10% difference in your rate of return each year, which is amazing.

That's better than buying bonds. Sometimes that could be better than investing in the stock market just from the tax benefits that you get. It's insane. And I think about it. Like my job is commission based largely. So I'm in a tech sales job where like I can put more effort in and get more pay. And the amount of effort I put into getting more pay is like way harder.

than just saving on the tax side. So you can end up going a lot further by saving on taxes than having to go get a second job or like just work 40 more hours a week or something like that. Can you give us a number? Like how much do you think one of these saves you in taxes per year? So there's a limit. If you're single in taxes, you can do up to $305,000 of tax offset per year. That's the limit that you can't do any more in that against your W2.

I've maxed it out every year with a lot more carrying over. Yeah. Just for everyone understanding what Ben's saying is if your salary, I'm just going to make this up, Ben, is $250,000, but you had that $305,000 of losses. You can carry over $55,000 in losses into the next year. Exactly. Yeah, that's pretty amazing. Yeah.

It's crazy. It's insane. Yeah. Yeah. So you're essentially offsetting all of your W-2 income. Yeah, essentially. Just so everyone understands, to get 100 grand in depreciation offset, what kind of property do you need to buy?

So it's actually not that crazy. 100 grand in depreciation offset. Now, again, there's the tax deduction and there's actual like with the tax savings you're making. So you really need to figure out your effective tax rate. If you're, you know, most people are probably between 30, 40 percent. If you're in that range, you know, and you can buy, let's say a half a million dollar property with a cost segregation study, you got to separate land. You got to make sure it's the right type of, you know, report that you build. So there's like a whole thing that goes on where you have to hire an engineer to do it and make sure you have the right type of separation of the asset to figure out what's the bonus appreciable.

Generally, you can get at least 20, 30 percent of the purchase price. back is a straight eligible for bonus depreciation. So if you just want 100K, you buy a 300K property, you're looking pretty good at getting 100K right off. And so that's giving you 100K right off. And if your tax rate is, let's say, 33%, you're saving $33,000 in taxes by buying a property. I'm curious, like, what's your read on short-term rentals as a strategy right now as we're entering 2026? The problem with short-term rentals that you don't get with the long-term stuff is, you know,

It's nice you can still pair in long, you know, 30-year fixed rate debt, which is the only type of debt I use other than like the, you know, the intro of credit cards and stuff like that. But really like the substantial mortgages, I'm only looking at 30-year fixed rate because I think it derricks the long-term horizon. But the problem of short-term rentals is you're also locked in, not just a steady long-term rents, but you're really relying a lot on the economy, people having disposable income to travel. The region can change a lot, a lot more dynamically than 12-month leases tend to change. So one thing I look at, and this is partly why it makes lot of sense around like New York City is I want an area that people will travel to my house,

not to the area. Like a good example is the most recent purchase I made was like, this is unbelievable. Back to like maximizing purchase price and finding something that would, you know, make sense within an hour radius of Manhattan. On Zillow, I kid you not, Billy Joel's house was listed on Zillow. And it was listed for $2 million. And I'm like, well, that's a lot of, I did the math. I'm like, that's a lot of bonus depreciation. And I could get a lot of write-offs for that. So I, you know, underwrote it, looked at it, and doveed into the history. It turns out it was owned by J.P. Morgan. There's like this huge history around the house.

And like super interesting, like really unique thing on Hudson River, like, you know, pretty close to Manhattan. And so I bought it. Wait, you bought Billy Joel's house? I bought Billy Joel's house. It's literally up on Airbnb. That's awesome. How did we not get to that scooter in this episode? That's the coolest thing ever.

Yeah. So this is like what it culminated in, which is great. So I bought Billy Joel's house. It's like up on Airbnb. be, again, I did like a pretty big rehab project on it, but I was able to use, again, intro credit cards. So I used that to make sure I could front the rehab on it. Bought it for $2 million, put about 300k into it.

That's now worth about 2.6. This is only a year later. And with the tax savings that I got, I was close to a million dollars in tax savings that are going to carry over multiple years. Oh, my God. That's unbelievable. That was from last year. That was still 60% of the bonus appreciation.

Wow. So like, you know, if it was even like six months later, it would have been even more. Wow, that's incredible, Ben. Congratulations. You really figured out a very creative strategy. Like, you've obviously gone and taken what you learned from your business, which isn't exactly short-term rentals, but I'm sure you learned a lot about just maximizing space, extracting value out of properties, and applied it to a really cool way of making money in an area of the country where people constantly say you cannot be a real estate investor. And I just want to commend you for being so creative and obviously hustling.

very hard to figuring out the right way to do this. Thank you. Each deal is kind of like in a vacuum. It doesn't matter where it necessarily is. If it can pencil out, you know, it's, it makes sense. And I think like New York, you got to be a little bit creative. It's not always like one size fits all. It's not going to be like a print and repeat type of a place.

But you can definitely find unique properties and unique deals. And like even on the apartment side, like there's still tons of things you can find to limit down payments to figure out how you can use leverage or, you know, like work with the landlord, seller financing. There's things you can still do to make sure that you're like buying into the market you're interested in. So before we get out of here, Ben, what is, as we enter 2026, what does your portfolio look like today? So right now I have about eight properties. Most of those are in the state of New York,

three Airbnbs, including Billy Joel's house, which is the big one. It's awesome. It's the coolest thing you could say. That's such a good bragging point. Thank you. Yeah, and I hung on to my W2 jobs. So still, you know, still focused on that and kind of building that company at the same time, also looking for more Airbnb. Awesome. Strategy out into future years is to keep maximized. in this loophole. It looks like it's going to be around for a while longer, so I'll keep exploiting it as long as I can. And yeah, just keep building the empire.

All right. Well, next time I'm in the Northeast to visit friends and family, I want to stay at Billy Joel's house. You're welcome anytime. It's called Craigs in the state. Thank you. Awesome. All right. Well, Ben, thanks so much for being here. We appreciate it. Thanks so much for having me. It's been a dream to be here. 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 Bigger Pockets for over a decade, helping thousands invest smarter. If you want to do the same, visit BiggerPockets.com slash retirement to learn more.

Getting ready for a game means being ready for anything. Like packing a spare stick. I like to be prepared. That's why I remember 988, Canada's suicide crisis helpline. It's good to know just in case. Anyone can call or text for free confidential support from a train responder. Anytime.

988 Suicide Crisis Helpline is funded by the government in Canada.