BiggerPockets Real Estate Podcast BiggerPockets

Could building houses make you more money than buying existing ones? When should someone use the 1% rule in real estate, and when does this metric point to a cash flow disaster? What’s the best way to get more capital or funding for future real estate deals: get a HELOC on your primary residence or look for investor-only DSCR loans? We’re pulling some of the top questions from the BiggerPockets Forums and giving our answers on today’s show!

Expert investors Dave Meyer, James Dainard, and Kathy Fettke from the BiggerPockets On the Market podcast are on today to answer YOUR real estate investing questions. First, we return to the age-old debate, “Does the 1% rule exist anymore?” With high home prices and lagging rent growth, this once foolproof metric could be an outdated calculation inexperienced real estate investors should avoid. Next, can you make more money building houses than flipping houses? 

Are turnkey rentals the best “low headache” real estate investment? We’ll answer that and give our thoughts on when to use a HELOC (home equity line of credit) vs. a DSCR loan (debt service coverage ratio). Finally, for our out-of-state investors, we share the top metrics to look at BEFORE you invest in a new market. 

Want to ask a real estate investing question? Post yours in the BiggerPockets Forums, and we might select it for our next show!

In This Episode We Cover
The 1% rule explained and when you should (and definitely shouldn’t) use it to decide on deals
Building new construction vs. flipping houses, plus which could make you more in 2024
Turnkey real estate investing and whether the lost value-add potential is worth the passive income
HELOCs (home equity lines of credit) vs. DSCR (debt service coverage ratio) loans
Best tools to use and metrics to track when looking into out-of-state investing markets 
And So Much More!

(00:00) Intro
(00:46) Is the 1% Rule Dead?
(08:24) Building vs. Flipping Houses
(14:30) Are Turnkey Rentals Worth It?
(20:56) HELOCs vs. DSCR Loans
(25:07) Local Market Metrics to Track
(30:46) Ask Us Your Question!

Check out more resources from this show on BiggerPockets.com and  https://www.biggerpockets.com/blog/real-estate-953
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You don’t have to race to financial independence to get there. Dave Meyer, VP of Market Intelligence at BiggerPockets, took his time building up passive income, and years later, it’s what has allowed him to amass impressive wealth all while living abroad, working where he wants, and securing a very stable retirement. But Dave wasn’t always some housing market genius who knew every statistic and metric about real estate investing. He started as a broke college student with no job prospects, struggling to pay his own rent.

After graduating college during one of the worst recessions America had ever experienced, Dave was waiting tables to keep the lights on. He realized that he needed a different way to get ahead, and just getting a job wasn’t going to be enough. So, even with no money, Dave convinced a few friends to buy a house together while he borrowed money for his share of the down payment. Dave managed the property, took the tenant phone calls, and did what he had to do to learn the real estate ropes. And…it worked!

Now, a decade and a half later, Dave has an entire real estate portfolio of long-term and short-term rentals and passive income streams from syndication investments, but this all started with one small deal he took a chance on. Today, Dave shares every part of his story, from finding the first deal to moving abroad, pausing buying rentals, and why he’s getting BACK in the game now and doing deals again!

In This Episode We Cover
How to invest in real estate even if you’re starting from zero with NO money
The power of house hacking and how this strategy can explode your real estate portfolio 
Optimizing your portfolio and how to systematize your rentals so YOU don’t do all the work
Investing during a housing crash and why most Americans were running from rental properties 
Passive investing through real estate syndications and the pros and cons of putting your money in one 
Why Dave is finally getting back into the rental property game after years on the sidelines 
And So Much More!

(00:00) Intro
(01:08) First Rental with NO Money
(12:25) Optimizing His Portfolio
(18:30) Investing During the Crash
(19:46) Moving Abroad
(21:45) Passive vs. Active Investments
(30:59) Dave’s Current Portfolio

Check out more resources from this show on BiggerPockets.com and  https://www.biggerpockets.com/blog/real-estate-952
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Housing prices won’t budge, but there could be some relief on the horizon for homebuyers. As America’s affordability crisis continues to strain consumers, one of the most considerable costs, housing, is much to blame. Rising mortgage rates are making monthly payments significantly more expensive than just a few years prior, but how long can this last? According to the Vice President of Enterprise Research Strategy at ICE, Andy Walden, not much longer.

Every month, Andy’s team at ICE releases their Mortgage Monitor data reports, sharing valuable insights on what’s happening in the housing market. On this BiggerNews, we’re asking Andy to share what the data is telling him about home prices, mortgage rates, housing inventory, and buyer demand but, even more importantly, where we could be headed in 2024 and whether or not this hot housing market still has room to run.

While there has been huge home price growth over the last few years, Andy reckons prices could begin to “soften” as affordability reaches its breaking point. With demand retreating from the market and housing inventory still on the rise, prices may start to decline, and even if interest rates do fall again, we may not see the uptick in demand many home sellers are waiting for. Stick around as we unpack exactly what’s moving the housing market with ICE’s Andy Walden! 

Support today’s show sponsor, Rent App: the free and easy way to collect rent!

In This Episode We Cover
Why home prices may begin to “soften” in 2024 and what’s causing demand to fall
How to predict housing market trends and the key metrics that indicate potential price movement 
The “lock-in” effect that’s causing homeowners to hold on to their properties 
Why inventory is quickly rising across much of America, EVEN with sky-high rates
The ongoing affordability crisis and the dramatic changes that could solve it 
Record home equity and why American homeowners may be richer than ever 
And So Much More!

(00:00) Intro
(01:37) Home Prices Hit New Highs
(06:08) How to Predict Market Trends
(09:53) Will Prices Soften?
(11:37) Why is Inventory Rising? 
(19:09) Rate Cuts Won’t Solve This 
(27:15) The Cure for Low Affordability 
(29:15) Home Equity Breaks Record 

Check out more resources from this show on BiggerPockets.com and  https://www.biggerpockets.com/blog/real-estate-951
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There’s one way to invest in real estate that’s cheaper, easier, and more efficient than almost any other strategy. It allows you to get the best mortgage rates with the lowest down payments and buy properties in the best areas. And you can do it every single year until you grow a massive real estate portfolio. Real estate millionaires have been made using this strategy, but most Americans have no idea about it. What’s the wealth-building secret that savvy investors are taking advantage of? Of course, it’s house hacking.

If you’ve never heard of house hacking before, the concept is simple: You buy a single-family home or a small multifamily property and rent out the space you’re not using. This not only allows you access to the best mortgages but also keeps your mortgage cost lower than living on your own. This strategy is so good that expert investor Dave Meyer and today’s lender guest, Terrence Terrell, have used it repeatedly to build serious wealth.

If you’re a first-time homebuyer or have a home but want to get into rental property investing, this is THE strategy to try first. Terrence gives a beginner-friendly masterclass on house hacking, showcasing the huge benefits of house hacking’s low-money-down loans, what you need to have to qualify for a mortgage, the common misconceptions most people get wrong about house hacking, and how to use this strategy to build wealth fast.

In This Episode We Cover
House hacking explained and why it’s the easiest beginner real estate investing strategy 
How to buy your first investment property with as little as ONE percent down 
Qualifying for a mortgage and what first-time homebuyers must know before they apply
The free way to find out whether or not you’ll be able to get financing for your house hack
The easy, low-money-down way to build a real estate portfolio by house hacking 
And So Much More!

(00:00) Intro
(01:26) What is House Hacking?
(03:16) Put Just 1% Down!
(07:50) Who Should House Hack?
(09:28) It's Not as Hard As You Think
(11:55) What Homebuyers Need to Know
(14:51) Qualifying for a Mortgage
(18:43) Advice for First-Time House Hackers 

Check out more resources from this show on BiggerPockets.com and  https://www.biggerpockets.com/blog/real-estate-950
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Would you buy a rental property that loses money every month? What if, in a few years, that one property could make you hundreds of thousands of dollars? Would the negative cash flow be worth the massive appreciation upside? Today, we’re answering that exact question from an investor who could be sitting on a wealth-building opportunity but doesn’t know what decision to make. Should he buy the "bleeding" property at a steep discount or give up this needle in the housing market haystack to avoid a cash flow trap? Let’s find out!

We’re back on Seeing Greene as David and Rob, your go-to real estate investing experts, answer questions directly from BiggerPockets Real Estate listeners like you! First, an investor has a rare opportunity to buy “Grandma’s house” with over $200K+ in potential equity upside. The problem? It will LOSE $800/month! Next, a new property manager wants to know how to raise rents on a twenty-year tenant. Do you pay capital gains on the profit of your home sale or the entire amount? We’ll show you how to know how much you owe. Then, an investor debates selling his C-class cash-flowing properties in exchange for appreciating assets, and we explain the “sneaky rental” tactic that’ll take you to ten rental properties in no time!

Want to ask David a question? If so, submit your question here so David can answer it on the next episode of Seeing Greene. Hop on the BiggerPockets forums and ask other investors their take, or follow David on Instagram to see when he’s going live so you can jump on a live Q&A and get your question answered on the spot! 

In This Episode We Cover
Negative cash flow and one of the ONLY times it makes sense to buy a “bleeding” rental
How to raise rents (the right way) on a long-term tenant 
Capital gains tax explained and how much YOU could owe on your next home sale
Whether to trade cash flow for appreciation and selling your rentals that don’t have room to grow 
The “sneaky” rental tactic that allows you to scale a real estate portfolio FAST 
And So Much More!

(00:00) Intro
(01:23) Losing $800/Month to Make $200K?
(11:59) Raising Rents On 20-Year Tenant
(21:28) Comment Section & Capital Gains 101
(25:47) Trade Cash Flow Portfolio for Appreciation?
(33:05) The "Sneaky Rental" Tactic
(38:20) Ask Us Your Question!

Check out more resources from this show on BiggerPockets.com and  https://www.biggerpockets.com/blog/real-estate-949
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When you think about short-term rental and Airbnb markets, what comes to mind? Joshua Tree, the Smoky Mountains, maybe Destin? We all know about the famous short-term rental markets, but what about the not-so-famous ones? You know, the unsexy markets where you book an Airbnb for a conference or when you’re going to see extended family? That’s right; we’re talking about everyday American markets like Cincinnati, Ohio. But surprisingly, these markets make some of the best investments for short-term rental investors like Jarrod Tucker and Yiwei Cheng.

Jarrod and Yiwei moved to Cincinnati for work shortly after catching the real estate investing bug. They knew they wanted to invest in real estate, but long-term rentals only came with measly cash flow that would never support their passive income goals. So, what’s the next best option? Short-term rentals! Unfortunately, Cincinnati isn’t known as a popular vacation getaway, but it didn’t have to be to support Jarrod and Yiwei’s cash flow dreams!

Now, five years after the start of their investing journey, they have ten rentals of their own and manage a couple dozen more for other investors. The question is, how do you make money with short-term rentals in an unsexy market? Jarrod and Yiwei walk through their tips for finding the right properties, keeping occupancy rates high, buying real estate when your DTI (debt-to-income) gets maxed out, and why you MUST separate yourself from the basic short-term rentals to reach your financial goals.

In This Episode We Cover
The three types of short-term rental guests who consistently come to markets like Cincinnati 
How to set your Airbnb apart if you’re in a saturated short-term rental market 
Tips for higher occupancy and what you MUST have to get more bookings 
Scaling your real estate portfolio when you have high DTI (debt-to-income)
Using partnerships to buy even more properties when you’re low on cash
Why you DON’T need to invest in high-priced, popular vacation destinations 
And So Much More!

(00:00) Intro
(01:36) The Accidental Airbnb Host
(08:07) Short-Term Rentals in…Cincinnati?
(13:37) Are Short-Term Rentals Saturated?
(19:46) Tips for Higher Occupancy
(22:31) Scaling with High DTI (Debt-to-Income)
(32:24) Advice for New Investors

Check out more resources from this show on BiggerPockets.com and  https://www.biggerpockets.com/blog/real-estate-948
Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com.
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