On The Market BiggerPockets

If you’re like most investors, you’ve probably asked yourself, “Should I pay off my rental property early?” With today’s high mortgage rates, troublesome inflation, low inventory, and risky economy, many investors don’t know whether it’s the right move to pay off their mortgage, reinvest in their properties, or go out and buy more. Paying down your debt gives you a guaranteed return, but with home prices still climbing, you could miss out on the sizable appreciation of getting another rental.
On today’s show, we’re going to debate which is the best move to make. Should you pay off debt, buy more investment properties, reinvest in your portfolio, or put more money down when you buy? Each investor has a different method for their next move, but thankfully, our expert panel gives their thought processes for figuring out which decision is best for your portfolio. Henry even shares his “three buckets” framework that EVERY investor should think through BEFORE investing or paying off a property.
We’ll also discuss the crucial calculations you can use to help you decide and avoid analysis paralysis if you’re stuck between choices. Plus, how a high-risk house flipper like James protects himself from downsides even during tough markets like today. Don’t pause on making moves that could help you reach financial freedom; stick around, and we’ll show you exactly how to know which moves to make in 2024’s housing market! 

In This Episode We Cover
Whether to pay off your mortgage early, reinvest, or buy more properties
Why EVERY investor needs to calculate return on equity (ROE) on their portfolio
Is it too risky to invest today? Why James is making even more high-risk investments in 2024
The “three buckets” of your real estate portfolio that will help decide what you should do with your cash
What to do with extra money and how to make some serious passive income with private money lending
The only time when we would put a large down payment on a rental property
And So Much More!
Links from the Show
Find an Agent
Find a Lender
BiggerPockets Forums
BiggerPockets Agent
BiggerPockets Bootcamps
Join BiggerPockets for FREE
On The Market
Join the Future of Real Estate Investing with Fundrise
Connect with Other Investors in the “On The Market” Forums
Subscribe to The “On The Market” YouTube Channel
Dave's BiggerPockets Profile
Dave's Instagram
Henry's BiggerPockets Profile
Henry's Instagram
James' BiggerPockets Profile
James' Instagram
Property Manager Finder
Should You Pay Off Your Mortgage Early or Invest?
BiggerPockets Real Estate 622 - ROE over ROI and Why Your “Cash Flow” Number is Deceiving
Books Mentioned in the Show
Real Estate by the Numbers by Dave Meyer
Start with Strategy by Dave Meyer


Jump to topic:
(00:00) Intro
(02:06) Too Risky to Invest?
(09:18) Pay Off Debt Instead?
(15:56) Value-Add and Reinvesting 
(23:55) Putting More Money Down

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-219
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Owning real estate could get expensive—yes, even more expensive than it already is today. Insurance prices, property taxes, maintenance costs, and more are going through the roof, and there isn’t much stopping these costs from jumping even more. What’s accelerating the rise in these upkeep costs? Hotter summers, colder winters, and more natural disasters. Growing climate risk is making real estate deals harder and harder to pencil, and even some safer areas to invest are seeing sizable pricing upticks. 
John Sheffield from ICE brings us the latest data on the financial impacts of climate risk in this episode. When we say “climate risk,” we know what you’re thinking: hurricanes, tornadoes, and wildfires. But that doesn’t even scratch the surface of what’s causing real estate expenses to jump. Areas of the US with once-cool summers are now experiencing record-breaking heat, increasing hail damage is denting roofs and breaking windows, and flooding has become the norm. These subtle climate effects have huge implications for your bottom line. So, what should you do to secure the profit you’re looking for on your next property?
John hits on the expenses that are rising the most, the areas where home upkeep costs could almost mirror monthly mortgage payments, and what investors must do when underwriting their next deal to account for this massive jump in expenses.

In This Episode We Cover
The actual cost of climate risk and the expenses that are seeing the most significant pricing surges
Why even areas without hurricanes, fires, or tornadoes are still at significant risk 
Property tax problems and underfunded local governments that could quickly raise taxes
Insurance underpricing that could lead to even more expensive home protection
Areas where home prices could drop as a result of inflated home expenses
Where to find and track climate data so you know where (and where not) to invest 
And So Much More!
Links from the Show
Find an Agent
Find a Lender
BiggerPockets Forums
BiggerPockets Agent
BiggerPockets Bootcamps
Join BiggerPockets for FREE
On The Market
Join the Future of Real Estate Investing with Fundrise
Connect with Other Investors in the “On The Market” Forums
Subscribe to The “On The Market” YouTube Channel
Dave's BiggerPockets Profile
Dave's Instagram
Property Manager Finder
BiggerPockets Real Estate 951 - BiggerNews: Why Low Mortgage Rates Can’t Solve Our Affordability Crisis
BiggerPockets Real Estate 895 - BiggerNews: How Climate is Exploding Insurance, Building, and Investing Costs
Growing Home Insurance Costs Will Destroy Your Cash Flow—Here’s What You Can Do About It


Jump to topic:
(00:00) Intro
(01:31) Costly Climate Risk
(07:56) A Huge Insurance Problem 
(14:31) Property Taxes and Utility Costs
(20:38) Maintenance Inflation 
(22:54) What Investors Must Do
(25:22) Prices Could Drop Here 
(30:08) Where to Find Climate Data 

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-218
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The unemployment rate begins to rise as job growth slows in the latest jobs report, prompting many to wonder, “Will this finally lead to interest rate cuts?” With so many investors waiting and hoping for rates to fall, this metric may point to exactly what the Fed is looking for. But while waiting for rate cuts, investors could miss out on a huge opportunity to buy at discounted prices. If you’re sitting on the sidelines, you could be making a big mistake. What do we mean? We’re getting into it all in this headlines show!
We’ve got four economic news stories to discuss today, ranging from Redfin’s $9.25 million settlement as part of the agent commission lawsuits to new jobs report numbers and what Americans really think about the economy. First, we’ll touch on Redfin news as the discount brokerage settles in what seems to be the never-ending NAR lawsuit. Next, Americans think now is the worst time to buy a house. Do we disagree? Not really! But, we do believe it could get even worse very soon for those who don’t buy before it’s too late.
Next, we’ll review the latest jobs numbers, from rising unemployment to slowing growth, and whether this will prompt the Fed to finally cut rates. Lastly, we’ll hit on consumer sentiment and America’s growing economic pessimism. With so many Americans living in financial fear, why aren’t we seeing a drop-off in travel and consumer spending? If you’re listening to this episode on a plane to Europe with your designer bag and $500 headphones, we’re talking about you! Stick around as we break down the top economic headlines and their impacts on the housing market. 

In This Episode We Cover
The latest agent commission settlement and the huge payout from Redfin  
Is now the worst time to buy a house, and what happens if home prices keep rising?
The one type of real estate that may see a serious uptick in demand over the next few years
New jobs report numbers and whether this could finally prompt the Fed to lower rates 
Consumer sentiment and the extremely confusing economic pessimism we’re seeing now
Why you DON’T have to wait for rates to drop to get your next real estate deal
And So Much More!
Links from the Show
Find an Agent
Find a Lender
BiggerPockets Forums
BiggerPockets Agent
BiggerPockets Bootcamps
Join BiggerPockets for FREE
On The Market
Join the Future of Real Estate Investing with Fundrise
Connect with Other Investors in the “On The Market” Forums
Subscribe to The “On The Market” YouTube Channel
Dave's BiggerPockets Profile
Dave's Instagram
Henry's BiggerPockets Profile
Henry's Instagram
James' BiggerPockets Profile
James' Instagram
Property Manager Finder
Grab Dave’s Rent vs. Buy vs. House Hack Calculator
Articles from This Episode:
Redfin
Worst Time to Buy
Jobs Report
Consumer Sentiment
Buy or Rent?


Jump to topic:
(00:00) Intro
(01:13) Redfin Settles in Commission Lawsuit 
(06:03) Worst Time to Buy a House?
(16:25) Job Growth Slows, Will Rates Drop?
(27:47) Economic Pessimism Peaks 

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-217
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Squatters' rights have been a serious subject of debate over the past few years. It seems that more and more investors and even one-off landlords are dealing with squatters staying in their homes, whether they’ve had a lease in the past or not. This puts landlords in a strange predicament: try to get squatters out the legal way or offer unconventional incentives to entice the squatters to leave on their own accord. But how can a landlord prevent squatters from getting inside in the first place?
Denise Medina and Patrick MacQueen, attorneys based in Detroit and Phoenix, are here to share exactly what a landlord must know about squatters’ rights and how to get a squatter out of your property legally. With new squatter laws taking effect in states like Florida, it seems that landlords and local governments have had enough. However, squatters’ rights remain strong in many other areas, such as James Dainard’s own Seattle, Washington. So what can landlords from either coast do to get squatters out?
We’ll break down where squatters’ rights even came from, how landlords can get the legal upper hand and get a squatter OUT of their property, the exact steps a landlord should take, the prevention methods to stop squatting in the first place, and how James deals with squatters frequently without ever having to go to court!

In This Episode We Cover
Squatters’ rights explained, and the ancient laws that they’re based on
Why state governments are getting tired of squatters and tightening up their laws
What qualifies someone as a “squatter,” and why it’s MUCH broader than you think
Evictions 101 and the steps every landlord should take to get a squatter out
“Cash for keys” and maneuvering around the courts to remove squatters
Trespassing vs. squatting and why the police CANNOT simply come and take a squatter away
And So Much More!
Links from the Show
Find an Agent
Find a Lender
BiggerPockets Forums
BiggerPockets Agent
BiggerPockets Bootcamps
Join BiggerPockets for FREE
On The Market
Join the Future of Real Estate Investing with Fundrise
Connect with Other Investors in the “On The Market” Forums
Subscribe to The “On The Market” YouTube Channel
Dave's BiggerPockets Profile
Dave's Instagram
James' BiggerPockets Profile
James' Instagram
Property Manager Finder:
biggerpockets.com/findapm
Learn to Be a Landlord with the BiggerPockets Bootcamps
Real Estate Rookie Podcast 360 - Trespassers Took Over My Property! (How to Get Rid of Squatters ASAP)
BiggerPockets Real Estate 390 - 7 Figures From ONE Deal With Leka Devatha
Connect with Denise:
https://www.thefgfirm.law/attorneys/denise-medina/
Connect with Patrick:
www.medalistlegal.com


Jump to topic:
00:00) Intro
(02:17) "Squatting" Explained
(06:00) A Rise in Squatters?
(10:22) Squatters' Rights
(19:01) What Landlords Can Do
(26:19) Tips for Landlords
(28:15) How Squatting is Changing
(33:03) Cash for Keys

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-216 
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The housing market has seen unprecedented home price growth in the 2020s. Already, we’ve almost beat the past three decades, and we aren’t even halfway through our own. And now, with home price growth slowing, many people wonder how we’re still in a position of high housing costs and low inventory. The answer is simple: “Switching costs” are holding the housing market in limbo, and the more you know about them, the more our current situation makes sense.
Put simply, “switching costs” are not only the financial but also the psychological costs of selling your current home and buying a new one. With mortgage rates close to double what most Americans have locked in, there’s a substantial financial consideration when purchasing a new home. Lance Lambert, co-founder of ResiClub and housing data authority, is on the show today to talk about home prices, housing inventory, and how “switching costs” influence both.
Lance details how our massive home price acceleration put many Americans in an affordability bind, making “switching costs” higher than in recent history. So, how do we cross the threshold to enter a time when “switching costs” are low, prices are stable, and housing inventory returns? Lance walks through exactly how to tell the direction your local housing market is going in and the data investors must look at to get a better sense of how home prices and housing inventory are trending.

In This Episode We Cover
“Switching costs” explained and why they’re keeping the US housing market in limbo
The “lock-in effect” that’s suppressing our housing inventory and keeping owners from selling
Inflation’s sizable role in the massive home price appreciation we’ve been seeing
The slow recovery in active listings and how far behind pre-pandemic levels we are
The one data point you must follow if you want to gauge how healthy your local housing market is
And So Much More!
Links from the Show
Find an Agent
Find a Lender
BiggerPockets Forums
BiggerPockets Agent
BiggerPockets Bootcamps
Join BiggerPockets for FREE
On The Market
Join the Future of Real Estate Investing with Fundrise
Connect with Other Investors in the “On The Market” Forums
Subscribe to The “On The Market” YouTube Channel
Dave's BiggerPockets Profile
Dave's Instagram
On the Market 108 - How the Pandemic Polarized America’s Property Market w/Lance Lambert
On the Market 189 - The Fed’s Plan “Backfired,” Now They’re Scrambling w/Logan Mohtashami
National home price growth this decade has already surpassed that of the entire 1990s and 2010s
Read More from Lance:
https://www.resiclubanalytics.com/

Jump to topic:
(00:00) Intro
(01:27) Housing Inventory Update 
(05:00) “Switching Costs” Shoot Up 
(10:52) Are Owners “Locked-In”? 
(16:04) Can Home Price Growth Last?
(21:36) How to Predict Your Market 
(26:10) Connect with Lance!

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-215
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Multifamily syndications are getting squeezed. With short-term financing coming due and mortgage rates at multi-decade highs, syndicators are calling on their original investors to raise more money so they don’t lose the deal. The problem? If you’re an investor, how do you know if your additional investment will ever be returned? Could a syndication simply burn through your money without making any promising changes to the investment? What should you know BEFORE you put up the cash for a capital call? We brought two syndication experts, Brian Burke and Mauricio Rauld, on to share their tips for navigating capital calls.
Before we start, let’s clarify this isn’t exclusively a syndication or multifamily problem. Much of the commercial real estate market is facing financing problems as loans come due and mortgage rates stay high. However, this problem has become a lot more common for syndication investors since rates started rising. In this episode, we’ll break down what a capital call is, why syndications do them, whether or not you’re obligated to invest more, and what investors MUST look for before putting up cash.
If a capital call comes your way, we have the exact questions you should ask the syndicator to ensure your money is being used correctly. Plus, if you’re a syndicator or plan on being one in the future, we share the steps to pull off a capital call the right way and make your investors whole. Making the wrong move could cost not only your investor’s money but also your money and lead to serious legal consequences. Don’t get stuck in that spot; stick around!

In This Episode We Cover:
Capital calls explained, why they happen, and why they’re becoming common in multifamily
Syndications 101 and the reason they’ve become popular among passive investors
Commercial lending problems and the bridge loans that are squeezing multifamily investors
What investors MUST look for when a capital call comes their way and the questions to ask
The right way to execute a capital call and the steps every syndicator should follow
And So Much More!
Links from the Show
Find an Agent
Find a Lender
BiggerPockets Forums
BiggerPockets Agent
BiggerPockets Bootcamps
Join BiggerPockets for FREE
On The Market
Join the Future of Real Estate Investing with Fundrise
Connect with Other Investors in the “On The Market” Forums
Subscribe to The “On The Market” YouTube Channel
Dave's BiggerPockets Profile
Dave's Instagram
Kathy's BiggerPockets Profile
Kathy's Instagram
BiggerPockets' Instagram
Recent Episodes with Brian:
On the Market 71 - The Multifamily “Bomb” is About to Blow, Here’s What You Need to Know
On the Market 147 - Top Multifamily Investors’ Advice for Buyers in 2023? DON’T Do It!
Real Estate Podcast 900 - The Truth About Real Estate Investing in 2024 (What Investors NEED to Know)
BiggerPockets Money 219 - Syndications: Everything You Need to Know BEFORE You Invest
 
Connect with Brian:
Brian's BiggerPockets Profile
Connect with Mauricio:
Mauricio's BiggerPockets Profile
 
Book Mentioned in the Show:
The Hands-Off Investor by Brian Burke


Jump to topic:
(00:00) Intro
(03:24) What’s a Syndication?
(08:05) Multifamily is Getting “Squeezed” 
(12:57) Why “Capital Calls” Happen?
(16:20) What Investors MUST Look For
(22:25) Sponsor Loans and Raising More Money
(28:26) Ask THESE Questions
(37:56) The Right Way to Capital Call

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-214
Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com.
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