Wish to Put money into Actual Property in 2026? Take heed to This First

Dave Meyer:
These had been the BiggerPockets Podcast episodes that outlined actual property investing in 2025. Hey everybody, Dave right here. I hope you’re all having fun with the vacation season together with your family and friends. It has been one other transformative 12 months in actual property. The market continues to evolve and the buyers who’re thriving are those who’ve tailored their methods to match present circumstances moderately than ready for issues to return to regular. On at this time’s present, we’re going to recap a number of the greatest investing tendencies and subjects we targeted on in 2025 by replaying parts of the 12 months’s hottest BiggerPockets podcast episodes. These are the exhibits that resonated most with the BiggerPockets neighborhood after they had been first revealed. And so I hope revisiting them at this time will assist encourage you as you intend for investing in 2026. We’re going to republish a couple of different standard episodes of the present and from throughout the whole BiggerPockets community over the subsequent week, after which we are going to return with model new podcasts beginning on January 2nd.
The primary episode I’m going to revisit at this time is again from January as a result of final 12 months I began off the 12 months by sharing my upside period framework for the primary time. The thought behind it’s that we’re in a brand new period of investing. And regardless that actual property is probably not as apparent because it was a couple of years in the past, it’s nonetheless the very best path to securing your monetary future, and it’s higher than some other solution to make investments your cash. This episode was known as The Actual Property Monetary Freeda System Has Modified. It was launched in January 2025. And I feel my dialog with Henry Washington holds up simply as effectively now because it did nearly a full 12 months in the past. I feel the issue is that we deal with monetary independence as binary. It’s like both you’re financially free otherwise you’re not. When actuality, it’s a path.
And the aim, at the least for me, has at all times been to only grow to be extra financially impartial. Each deal you do, each monetary resolution you make will hopefully put you in a greater monetary place so you will have extra flexibility. For some folks like Henry, that flexibility is likely to be going to Europe and simply not working for a pair weeks. For me, I relaxation straightforward understanding that if BiggerPockets determined to fireplace me tomorrow, I couldn’t work for a few years and be very comfy. And to me, wouldn’t contemplate myself absolutely financially impartial as a result of if I left my job at this time, I would wish to determine lively earnings identical to you, Henry. However I’m extra financially impartial than I used to be 15 years in the past earlier than I began investing.

Henry Washington:
Completely.

Dave Meyer:
And I’m extra financially impartial this 12 months than I used to be final 12 months and the 12 months earlier than that and the 12 months earlier than that. And I really feel like that actually must be the aim is simply to maintain transferring in that path as a result of truthfully, your definition of what monetary independence goes to vary. The sum of money I assumed that I might’ve wanted to really feel comfy once I began 15 years in the past, I handed that quantity some time in the past. And my expectations, I strive to not have life-style creep, however if you grow old and also you simply have a extra subtle life, your bills simply go up. And in order that’s why I really feel like setting this aim and saying I’m monetary impartial or not, it’s simply not practical. The aim is simply to maintain making progress.

Henry Washington:
Yeah, that’s completely true. I used to be a kind of folks once I bought began that I assumed I might purchase sufficient rental properties to supply sufficient cashflow in present days
That I might have the ability to take the cashflow from the rental properties. After which when that variety of cashflow hit the variety of cash I made per thirty days in my day job, that I might depart my day job and dwell off of my cashflow. However as I began to purchase properties, I began to comprehend that that wasn’t essentially going to be a factor. I used to be completely shopping for properties that cashflow, however your online business and your properties, they don’t operate linearly. It’s not such as you purchase it after which it money flows and nothing ever occurs or goes fallacious. It simply makes you simply print that cash each month and it’s excellent and the world is nice. However that’s not the case. The extra properties you purchase, issues break at totally different occasions, issues break all on the identical time, folks transfer in, folks transfer out. There’s this fixed stream of cash that it’s arduous for you to have the ability to say, “Okay, effectively, I purchased 10 properties and every property money flows $500 a month.
And so now I’ve $5,000 each month that I simply will take out of this account and spend on my payments.” And the cash is flowing too fluidly for that to be a actuality. And so I noticed that if I actually need these properties to pay me money stream that I might dwell off of passively, then it’s going to occur far into the longer term
When these belongings are paid off. And so I needed to pivot my technique to assume, okay, effectively, how can I take advantage of actual property to nonetheless purchase leases, but additionally make money now in order that I can A, proceed to develop my portfolio, but additionally stabilize my portfolio after which begin to aggressively repay these properties so I can hit that aim sooner. That wasn’t what I assumed beginning out.

Dave Meyer:
Completely. Yeah. And I need to ask you about the way you pivoted your online business, however I’m simply curious first, was that disappointing to you realizing that?

Henry Washington:
You realize, that’s an attention-grabbing query. I don’t bear in mind feeling disenchanted about it simply because I used to be actively within the enterprise at that time and I had the foundational ability, which is I understand how to go purchase an excellent deal. All I needed to change was the way in which I used to be monetizing that deal, which was flipping it and getting additional cash upfront versus holding onto it and taking a pair hundred {dollars} right here or there. So no, it wasn’t disappointing as a result of I simply love the enterprise of actual property.

Dave Meyer:
Looks like individuals are avoiding entering into actual property as a result of we, people who find themselves actual property educators, BiggerPockets is a part of this, have been saying, “Hey, you may get actual property monetary freedom in a few years.” And like I mentioned, through the 2010s, it was at all times troublesome, however it was simpler than it was at this time. It was

Henry Washington:
Simpler.

Dave Meyer:
For certain. However I suppose I nonetheless really feel just like the prospect and the worth of actual property investing continues to be so sturdy that it frustrates me when individuals are like, “I’m not going to get in as a result of now it’s going to take 10 years to be financially freedom or 15 years to monetary freedom.” That’s unbelievable. It’s wonderful. Profession in the USA is like 45 years. So that you’re saying you chop it into a 3rd. If that doesn’t get you excited, I don’t actually know what would, however I do really feel like, I don’t know in the event you hear this too, however I hear folks saying like, “Oh, I can’t discover cashflow, I’m not going to get into it. ” However the fundamentals haven’t actually modified. That is form of at all times the way it’s labored.

Henry Washington:
The basics haven’t modified. They’re extra necessary now than they’ve ever been. It’s the basics it’s important to follow now in an effort to achieve success, however yeah, that is the easiest way to speed up that path in any method {that a} regular individual might. Are you able to do it in different pathways? Are you able to do it within the inventory market? Yeah, however you bought to get actually good at buying and selling shares. However the common individual in actual property can do that with out being an expert actual property investor, and that’s unbelievable.

Dave Meyer:
Given this, given the fact, it feels like we agree that it’s going to take you 12 to fifteen years to do it. In my thoughts, that’s implausible. And you may kind of be agnostic, at the least to me, about the way you pursue that lively earnings. I feel there’s an excellent argument to be made that it’s best to simply pursue no matter lively earnings makes you probably the most cash. And for me, that’s persevering with in a daily job, however it feels like for you, why did you make that selection understanding that you just wanted lively earnings to do it by way of actual property moderately than … You had an excellent job, proper? You had an excellent company job and also you selected to go away that.

Henry Washington:
Sure, I did have an amazing company job and I loved my job. That’s why I saved it so long as humanly doable. I used to be going to do each till I couldn’t do each anymore till somebody was going to cease me from doing each. And I did. That’s what occurred is I give up when it price me cash to have the job after they needed me to work extra hours and I simply couldn’t give them extra hours as a result of it will take away from what I used to be doing in actual property. However the reply to your query is I had to decide on the true property as a result of I’m throwing all out right here. I used to be making $110,000 a 12 months, which isn’t a ton of cash, however it’s good cash, proper? It’s good cash. It’s arduous not to decide on actual property as your full-time earnings path once I’d should commerce 40 hours per week for 12 months to make $110,000.
In the event you rely my bonus, I used to be in all probability making nearer to $140,000 once I might flip two homes and make that, and I might flip two homes in the identical month. Yeah.

Dave Meyer:
Would you place it that approach? Proper,

Henry Washington:
Proper. We simply offered a deal and made 70K final week. And yeah, it took us 5 months to make 70K, however that wasn’t the one home I used to be flipping. I had to decide on the true property. It made extra monetary sense. And in addition, I adore it a lot greater than I beloved my day job. I preferred my day job. I really like doing this.

Dave Meyer:
In order that was me and Henry on episode quantity 1069 from January. Our subsequent episode at this time was our hottest present of the 12 months on YouTube. It’s an investor story with Deandra McDonald. This episode actually struck a chord with lots of you as a result of it proves you can begin investing in actual property and alter your monetary trajectory from nearly any place to begin. DeAndra had $35,000 in debt and bought rejected by a lender the primary time she tried to purchase a property. She finally bought her first deal although with a down cost of lower than $4,000, and 4 years later, she was capable of give up her job and grow to be a full-time actual property investor. That is an extremely inspiring story of taking incremental steps to enhance your monetary place, one property at a time. Right here’s my dialog with Deandra McDonald from episode 1105 again in April. What did you purchase?
Since you mentioned you needed to dwell in it. Have been you on the lookout for a home hack form of state of affairs?

Deandra McDonald:
Precisely, as a result of that’s all I had. With all that financial savings, that further two years, I nonetheless might provide you with about $5,000 as a result of I needed to pay down the bank card debt and simply dwell.That was additionally a necessity. However my first buy was a two bed room townhouse, simply half a duplex the place the plan was simply to decrease my hire. However what really occurred was I moved in, I took the smaller room and I rented out the second room to a roommate, which coated my mortgage. And that began the complete dependancy to this complete means of like, “Oh, I see. Okay. Yeah.

Dave Meyer:
” Yeah. I might think about that producing that earnings or saving that cash was quite a bit simpler than lifeguarding elements.

Deandra McDonald:
For

Dave Meyer:
Certain. So that you didn’t get to give up your job absolutely, proper? I think about you had been nonetheless working full-time, however feels like at the least enhance your high quality of life simply off that first deal, proper?

Deandra McDonald:
Yeah. Even simply I bought to cease lifeguarding.

Dave Meyer:
Yeah.

Deandra McDonald:
Even simply that. I had weekends once more. I had a time without work that I wasn’t eager about how can I decide up an additional shift? How can I make an additional $20 this weekend as a result of that provides to the pot? I might relaxation. So even when it was simply that, my goodness.

Dave Meyer:
I feel that is so necessary as a result of I consider this trade, a number of the main focus has been turned to only quitting your job, however I really like listening to tales like yours the place you present that each incremental deal can enhance your monetary state of affairs and may enhance, such as you’re saying, your high quality of life. You really had this tangible profit to your life simply by shopping for a single actual property deal. And I actually encourage everybody, possibly in the event you haven’t gotten that first deal but, to consider that as a result of it’s quite a bit much less daunting to consider how do I exchange my full W2 job. It’s like, effectively, simply take into consideration how are you going to work just a little bit much less? We’ll offer you just a little bit extra peace of thoughts simply to get that first deal. It sounds such as you did that, however then you definitely bought the bug. So what did you do after you bought first home hack?

Deandra McDonald:
I saved home hacking for some time. I bought a greater job the place I used to be making more cash, however didn’t change my life-style. And so yearly on the dot, we used to have a joke that I’ve containers that didn’t even hassle on packing as a result of it was like, I’m going to be gone in a 12 months as a result of now I’ve this method in like, oh, I dwell right here for a 12 months. I hire it whereas I’m right here. I hire it once I depart. All that more money goes into the subsequent property so that each property is greater, higher, extra environment friendly than the final one. I can repair stuff up as I am going. For years is simply what I targeted on.

Dave Meyer:
What space of the nation is that this?

Deandra McDonald:
I’m in Central Virginia, particularly Charlottesville.

Dave Meyer:
Okay. And it feels like that first deal, did you simply put in 5 grand? Was that each one you needed to provide you with?

Deandra McDonald:
I feel we regarded on the numbers and wound up being like $3,800.

Dave Meyer:
Yeah. Oh my God, that’s wonderful. And so everybody listening to that is jealous. However simply as a reminder, again then it was quite a bit more durable to get a mortgage to, as Deandra talked about, there have been trade-offs to each time. So was that kind of the quantity you had been capturing to avoid wasting each single 12 months? Might you repeat the technique you had been utilizing simply saving up $3,800, $5,000 a 12 months and shopping for one thing new?

Deandra McDonald:
Precisely. It was like, “Hey, there’s an abundance of properties right here underneath $1150,000.” I bear in mind now occasions are totally different. Like Dave was saying, I bear in mind having a $200,000 price range and being choosy getting into and say like, “I don’t like these cupboards. Present me one thing else. I don’t just like the wall colours.” And that was okay since you had different choices. And I need to say this, in sure elements of my state, that’s nonetheless very true.
My space has gotten very, highly regarded. It bought very, highly regarded after the world form of shut down in 2020, however it wasn’t that standard six years in the past the place it was nonetheless such as you had choices. And there are surrounding counties and surrounding cities the place there are nonetheless loads of choices in the event you had been to stroll in proper now with $200,000 and a need to dwell there. However yeah, what occurred was I used to be paying 700 a month in hire. So I went from paying 700 month of hire to nothing. So all I did was save that cash. So now as a substitute of saving 3,000, I can save much more per thirty days. I took out HELOCs as I might shift from place to position. My Airbnbs would do effectively. All that cash simply saved being saved and going to the subsequent property.

Dave Meyer:
And the way lengthy had been you doing home hacking? When did you begin doing one thing else?

Deandra McDonald:
I used to be home hacking completely for about three years. On 12 months 4 is once I began experimenting with midterm and quick time period as a result of I had duplexes or I had quads that generally I might have two or three months between when this tenant ended and the subsequent tenant who needs to come back begins. So what do I do on this timeframe? Oh, I might hire to a touring nurse for 2 months or put it on short-term leases as a result of I had some further furnishings. They usually’re like, “Oh, that is nice. I can play with all of those each time I would like them as a substitute of sticking to 1 factor.”

Dave Meyer:
That was my dialog with Deandra McDonald on BiggerPockets Podcast, episode 1105. We’ll be again with extra of 2025’s defining episodes after a fast break. Managing leases shouldn’t be anxious. That’s why landlords love hire prepared. Get hire in your account in simply two days, sooner cashflow and fewer ready. Must message a tenant? Chat immediately in app so you haven’t any extra misplaced emails or texts. Plus you may schedule upkeep repairs with just some faucets so that you’re not caught taking part in cellphone tag. Able to simplify your leases? Get six months of hire prepared for simply $1 utilizing promo code BP2025. Enroll on the Lincoln Bio as a result of the very best landlords are utilizing hire prepared. Henry, it’s vacation season. What do you get an actual property investor for the vacations?

Henry Washington:
Effectively, if that actual property investor is me, you may get me a 15-unit residence constructing.

Dave Meyer:
Oh, does that work? Do folks simply ship you residence buildings?

Henry Washington:
They’re now.

Dave Meyer:
Effectively, I bought a suggestion really. In case you are on the lookout for a present to get an actual property investor, purchase them a ticket to the upcoming Texas Cashflow Roadshow. We’re going to be in Texas. We’re going to Austin, Houston, and Dallas from January thirteenth to sixteenth, and we’re going to be having meetups, workshops, dwell podcast recording. We’d like to see you all there. So in the event you’re pondering you bought a buddy within the Texas space and so they’re making an attempt to get into actual property investing, they’re making an attempt to scale their portfolio, go to biggerpockets.com/texas and go purchase them a ticket.
Welcome again. At present, we’re revisiting a number of the present’s hottest episodes from the 12 months that was. Our subsequent clip has an identical theme. Antoinette Monroe was feeling unfulfilled along with her company profession when she fell into actual property investing nearly by accident. Investing, nevertheless, not solely gave her the monetary freedom to in the end depart her job, however it additionally gave her a way of function when she started working assisted residing services. Like DeAndra, Antoinette’s story exhibits that even a small portfolio could make a big impact in your monetary future and your neighborhood. That is me with Antoinette from episode quantity 1120.

Antoinette Monroe:
So I spent that whole first 12 months form of digging by way of the entire BiggerPockets boards, listening to all of the podcasts to know, okay, what do you do subsequent if you’ve finished this? I realized about home hacking. I noticed that that’s what I used to be doing, however then additionally the start technique. And that’s how I bought my second deal. So in 2019, I bought an off-market deal from my neighbor within the neighborhood I grew up in. So I had a direct connect with the vendor and that deal I used to be capable of get underneath contract for underneath 200,000. It solely wanted about 30 or 40 price of labor. And thru some suggestions that I bought off the larger pockets for them, I used to be capable of refinance that home and get all of my money again inside 45 days of closing.

Dave Meyer:
Wow. Superb. I’d like to dig into that as a result of I feel that is one among these offers that individuals listening are going to be like, “I would like a kind of.” Give me that. So inform me just a little bit how the off-market deal comes up as a result of we at all times hear about off-market offers, they’re nice and so they form of are simply this magical factor. And I feel how did this one come about? Did your neighbor know you had been shopping for homes or inform us about it?

Antoinette Monroe:
Effectively, no, as a result of on the time I wasn’t. I simply had the one home. However my mother knew that I used to be studying to be an actual property investor and I needed to do this. So speaking to her someday, she talked about, “Hey, the neighbor throughout the road, she’s planning to maneuver to Georgia to be along with her youngsters as a result of she’s getting older.” And I used to be like, “Ah, I do know what that is. I heard that podcast. It is a wholesale deal.” So I used to be like, “Give me her quantity. I’m going to name her.” And so I known as her, came upon what she was fascinated by doing. I went by way of the entire steps of the issues that I realized about from a wholesale deal. I used to be not an excellent negotiator. So I used to be identical to, what’s it that you really want for it? I’ll conform to that as a result of

Dave Meyer:
The numbers labored out. Yeah. Which is form of a win-win state of affairs, proper?

Antoinette Monroe:
Yeah. And so she nonetheless talked to some totally different wholesalers and I defined to her, I used to be like, “They’re going to offer you gives. Then they’re going to come back and have a look at it, after which they’re going to whittle that supply down primarily based on the bills that they’ve. So that they’ll do no matter to get you underneath contract.” However in the end, I feel I used to be capable of get that deal due to the non-public relationship and he or she was getting the worth that she needed and that was sufficient for her. So it’s a kind of, generally the correct place, proper time. You by no means know when that deal will come, however in the event you’re placing out what you’re fascinated by or what you’re on the lookout for, then folks normally attempt to assist. So I advised my mother, I need to be an actual property investor. I need to purchase extra properties. So anytime, now her ears are open when she hears about alternatives, she’s going to consider me and provides me a name.

Dave Meyer:
Effectively, I really like that. Good for you. That’s wonderful story about kind of this mix of serendipity and circumstance, but additionally being ready for it.

Antoinette Monroe:
Being ready. Sure. If I hadn’t been listening to the podcast, if I hadn’t been doing the analysis and understanding, that chance would’ve got here and I wouldn’t have identified what to do with it or easy methods to really make it work.

Dave Meyer:
Yeah. Your mother would’ve mentioned, “Hey, our neighbor’s transferring.” You’ve been like, “Oh, cool. I hope they get pleasure from Georgia.” You wouldn’t have been eager about how might you probably create a mutually helpful state of affairs for your self and for this individual. So it was a single household house, I assume, and your plan was to show right into a rental?

Antoinette Monroe:
Sure. So it was a single household. I put it underneath contract earlier than I noticed it. I simply had the recollections. I’d been in right here earlier than as a child, just like my home. That’s form of enjoyable. However as soon as I closed on it, I got here down and noticed that they’d finished an addition to it that made it a a lot bigger single household than I knew. And the format made it conducive for a cut up, which is what I did with the primary home. I purchased a single household, cut up it in half and form of made two models out of it proper as much as the road of being in bother with code. Simply-

Dave Meyer:
Simply towing

Antoinette Monroe:
That line.

Dave Meyer:
Yeah. Okay.

Antoinette Monroe:
Yeah. So I noticed this chance in that home as effectively, and I did the identical factor. I simply dropped a wall by way of the center of it, made a one mattress, one bathtub studio within the again with a kitchenette as a result of kitchens imply code points, after which saved the three one within the entrance. And I used to be capable of hire each side out, one to a member of the family, as a result of anytime you’re doing one thing, there’s at all times any individual watching. So instantly one half went to a member of the family, and the opposite half I used a realtor to get rented out.

Dave Meyer:
Okay, nice. You mentioned you got it for underneath 200 grand, you needed to put 30 or 40 grand in. How did you fiscal all of that?

Antoinette Monroe:
So with the primary mission, I had improved it after which added 700 sq. ft. So there was an excellent little bit of fairness in that house.
Good. I realized on the varieties that I ought to pull house fairness strains of credit score. So I had one current and able to go on that first house. So I used to be capable of purchase this outright in money utilizing the fairness from the house fairness mortgage. After which I borrowed personal cash from my brother-in-law to finish the renovation on that second house. So it was a mix of all of the belongings you realized. There was that house fairness line of credit score, there was borrowing cash from my brother-in-law, after which the hack that I take advantage of is my technique to make single households have twice as a lot money stream.

Dave Meyer:
That’s nice.

Antoinette Monroe:
Which is splitting them in half.

Dave Meyer:
If you wish to hear extra of Antoinette’s wonderful investing journey, be certain that to take a look at episode 1120. Subsequent up is a dialog I had with Henry Washington in August in regards to the BRRR methodology. Popularizing the BER is one among BiggerPockets’ greatest contributions to actual property investing. It’s an especially highly effective technique that permits buyers to recycle their money and scale shortly. However there was a story lately that the BRRR is debt. Some folks say it’s outdated in an period with mortgage charges over 6%. So Henry and I needed to speak this by way of and focus on whether or not that’s true and how one can replace the BER to nonetheless make it work at this time. That is from episode 1165.

Henry Washington:
It was a complete lot simpler to seek out offers to BER three years in the past. We nonetheless discover them now, however much less regularly. Flip numbers are inclined to make extra sense on this market than rental numbers, however as a result of we’re on the lookout for offers in quantity and we’re discovering offers in quantity, every now and then we get one which makes an amazing BER. After which I feel it’s important to put some parameters round BER, largely like a timeline as a result of you should purchase, renovate, hire, after which refinance in a brief time frame, or you are able to do it in a for much longer time frame. I’ve refinanced a number of properties this 12 months and pulled money out of them once I purchased them three to 5 years in the past and I simply put them on adjustable charges and that adjustable fee now got here due. I refinanced it right into a 30-year fastened and pulled money out.
And people long-term BERS are nonetheless BERS.

Dave Meyer:
Hernia, that’s an amazing level. I feel it’s a very necessary caveat as a result of I’ve been calling it the delayed BER or folks in YouTube gave me new concepts of what to name it as a result of I suck at this, however I couldn’t provide you with a greater title of it. We’ll name it the delayed bur. However I feel there’s two various things that you are able to do. One factor I’ve been doing is delaying the renovation. You purchase one thing that’s really absolutely occupied moderately than vacant and never making an attempt to do the BER on this flipped timeline. As a result of as you mentioned, there’s this strategy to doing the BRRR methodology, which is like, I’m going to do that in six months or no matter. I’m going to get in there, I’m going to renovate it shortly, I’m going to get hire as much as market fee, then I’m going to do that money out and I’m going to go purchase the subsequent deal actually quickly.
And that did work very well for some time. I feel it’s arduous to line up two offers. Such as you’re saying, I can’t do it proper now realistically, however even you, Henry, it feels like it will be arduous to even line as much as Burr’s in that timeframe the place it will even be advantageous so that you can even try this. And so what you may do is both take kind of the extra delayed strategy, which is getting the occupied models and opportunistically renovating when there’s time, or doing the renovation upfront, however not refinancing till you want the capital. I’m really refinancing a deal I purchased like six years in the past as a result of it’s money flowing effectively, however I feel that there’s going to be good offers coming and I’m seeing extra offers coming and I simply may need to unlock some capital. And so I’ll simply do the refinance, however it’s approach

Henry Washington:
Later. Yep. I feel when Burr was initially pitched, it was pitched as a solution to scale an actual property enterprise since you might line up again to again Burr’s and you may repeat this course of and you may nonetheless repeat it. I feel the timeline for the conventional investor is simply going to be longer.

Dave Meyer:
I feel that’s proper. There’s this assumption on this query, and I get this query on a regular basis. I’m certain you do too. Do BER’s work? Is it useless? There’s this assumption that the one motive to do a BERR is which you could refinance 100% of your capital out.

Henry Washington:
Full BERS. You bought a full BER.

Dave Meyer:
Proper, precisely. You want the quote unquote excellent Burr or full BER. However that isn’t that frequent. Possibly in the event you’re doing Henry’s form of offers and also you’re in the correct market on the proper time, that may be frequent. However I feel in the event you simply form of like reframe the dialog and don’t assume that you want to take 100% of your capital out, then I might say Burr is totally nonetheless a solution to develop your online business. You’re nonetheless capable of refinance a few of your cash out and also you’re shopping for, ideally, in the event you’re doing it proper, a money flowing rental property that you’ve constructed fairness in, you’re getting a few of your cash out of it to go scale once more. That’s nonetheless a win, even when it’s not completely tremendous 100% recycling of your capital prefer it was for that transient second in time.

Henry Washington:
Can I offer you a scorching take?

Dave Meyer:
Sure. That’s why you’re right here.

Henry Washington:
Even when Burrs had been straightforward to do, I didn’t actually like doing them.

Dave Meyer:
Actually? Why?

Henry Washington:
I didn’t like pulling my money out. I preferred the money stream.

Dave Meyer:
That’s the opposite factor. Yeah.

Henry Washington:
If you refinance a deal, what’s primarily what you’re doing is you’re getting a brand new mortgage at a better quantity and that new mortgage at a better quantity comes with a mortgage cost and that mortgage cost goes to be increased than the earlier one as a result of now it’s a better mortgage. If you get a brand new mortgage, they entrance load the curiosity within the first 5 to seven years,
And so most of your cost goes to curiosity. And so you place this cash in your pocket and lots of people, particularly the informal investor, might not have had the subsequent Burr lined up. They pulled the money out of their final Burr after which they blow a piece of it earlier than they get to their subsequent deal. After which it kills the aim. What I used to be doing and what I nonetheless love to do is as a substitute of refinance, I simply get entry to a line of credit score on that fairness after which that approach I don’t get a brand new mortgage at a better quantity. I preserve my decrease mortgage cost, which retains my money stream. After which I’ve entry to the cash within the occasion I would like it as a substitute of simply pulling it out and beginning to pay on a brand new mortgage after which not spending that cash properly.

Dave Meyer:
Yeah, as a result of that’s an amazing level. In the event you don’t instantly reinvest your capital that you just pull out, you’re primarily simply lowering your cashflow for no motive.

Henry Washington:
Yeah, proper.

Dave Meyer:
That to me is a very necessary factor. If you wish to hear extra in regards to the sluggish bur and the way Henry and I are each utilizing it in our personal portfolios, be certain that to return and take a look at episode 1165. We’ll be proper again. We’re again on the BiggerPockets Podcast going by way of a few of our greatest episodes of 2025. One of many causes I personally love having Henry on the present is as a result of he brings a lot information and expertise in relation to renovations and worth add investing. You heard it on that earlier BRRR episode earlier than the break, and also you’re going to listen to it in our subsequent clip too. Including worth to your properties is without doubt one of the key abilities for nearly each investor making offers proper now, as a result of in most locations, you may’t simply go on the market and purchase properties off the MLS and get a number of money stream.
However with just a bit little bit of effort, just a little little bit of enchancment, you may drive up values and hire on the identical time and make offers work. That’s what episode 1088 from February was all about. Right here’s me and Henry once more.

Henry Washington:
Now, earlier than we transfer on, you may generally add direct worth for underneath 5 grand in case your property is about up for you to take action.

Dave Meyer:
Sure.

Henry Washington:
An instance of this that we did lately, this was in a flip, however might have been a rental, proper? And so what occurred was we had a two mattress, one bathtub home, and that one bathtub home had a laundry room, and that laundry room was very massive, sufficiently big that it might have been a small bed room. This home additionally had a sunroom. Now, this sunroom was not heated and cooled and was dilapidated. And so what we had been in a position What to do was to maneuver the laundry into the sunroom. We completed the sunroom by simply placing insulation within the partitions and drywalling the ceiling as a result of it was simply form of like an open beam ceiling. We added insulation and drywall within the ceiling. We painted the concrete ground. We moved the laundry in there, after which we added a mini cut up air-con unit into that sunroom.

Dave Meyer:
Good.

Henry Washington:
So by doing that, we had been capable of spend in all probability about 5 grand. And so we added sq. footage. Despite the fact that it was already underneath roof, that sq. footage wasn’t counted within the heated and cooled sq. footage of the home as a result of there was no air-con. So by including a mini cut up, we added about 200 sq. ft to the home. And by transferring the laundry into that room, we had been capable of create a 3rd bed room. And in order that $5,000 allowed us to promote this home for $220,000 as a substitute of $200,000. So I spent 5 and I offered it for an additional 20. In order that’s $15,000 price of extra worth for spending 5,000.

Dave Meyer:
And never that a lot work. And never even that. Now that’s time.

Henry Washington:
So when you have a property, in the event you’re listening to this and you’ve got a property and also you’re contemplating doing one thing like this, do you will have a room in that property that isn’t underneath roof? Do you will have a room in that property that may very well be a bed room as a substitute of a eating room? Folks don’t actually use formal eating rooms. I prefer to convert these to bedrooms.

Dave Meyer:
I simply did that in a property the opposite day. There was a entrance little factor. I simply put a door up. It prices like $600. I’m getting in all probability two, 250 extra a month in hire due to that.

Henry Washington:
Increase. Can you exchange a storage? Quite a lot of the occasions, single automotive garages, folks don’t use to park in. They use to retailer stuff. I’ve a pair models in Joplin, Missouri the place there’s single automotive garages. And once I purchased the properties, each single one of many garages was saved stuff. Nobody was parking in it. So we spend about 5 grand, convert the storage right into a bed room, and now we get an additional three to $500 a month of hire out of every a kind of models.

Dave Meyer:
That is actually kind of the very best recommendation as a result of I feel it’s necessary for folks to comprehend that this isn’t luck. It’s not like Henry purchased this home and was like, “Oh, I discovered this sunroom and I can convert it. “That is the stuff you want to be on the lookout for if you’re really going to purchase properties as a result of anybody can theoretically add a bed room. However in the event you’re popping a high and taking off a roof and rebuilding that, that’s going to be a really costly proposition. That’s going to take a very long time. Or you will discover these properties which are arrange for it. These are good examples. I did one thing very related with my short-term rental. I needed a 4 bed room home. I wanted that to get my income. All of them had been tremendous costly, however I discovered a 3 bed room home that had a 400 sq. foot second front room.
Nobody was utilizing it. And it’s in a walkout, however it already had an egress window constructed. So I didn’t even have to do this. It had a closet. It was mainly all I wanted to do was put up drywall, one other bed room, particularly in the event you’re new to worth add. These are the sorts of properties which you could actually begin to goal. The opposite factor the place I make investments a number of locations at basements and ending them out is form of a no brainer. You search for ones which have the correct ceiling top,
Which have an excellent basis, which have sufficiently big home windows for egress. You don’t need to dig out the inspiration, however these varieties of issues, that’s simply very easy varieties of worth add that actually have a tangible, measurable, confirmed approach of including worth.

Henry Washington:
One of many first belongings you need to search for are search for properties which have bed room and toilet counts the place the sq. footage appears too massive for that bed room and toilet

Dave Meyer:
Rely. Sure. Yeah. Like a 2,400 sq. foot with two beds.

Henry Washington:
Sure,

Dave Meyer:
Precisely. That’s not proper.

Henry Washington:
In the event you’ve bought over 2,000 sq. ft, two bed room home, there’s room to transform one thing to a bed room. There’s room so as to add some worth. In the event you’re a 3 mattress, two bathhouse and it’s bought 2,500 to three,500 sq. ft, there’s in all probability room. Search for properties which have sunrooms. Sunrooms sometimes are usually not heated and cooled. And you may simply add some drywall and add some flooring and add some insulation and a mini cut up air-con unit and you may get added sq. footage.

Dave Meyer:
No, sorry. I’m simply laughing as a result of that is simply citing my childhood. My dad did this the place he transformed a sunroom to my bed room. I simply assume he skipped the insulation and including warmth half as a result of it was simply freezing my whole life. And this was in New York. I used to be simply at all times chilly. There was by no means warmth. I feel he may’ve missed that important step.

Henry Washington:
Sure. Sure. Sunrooms, we’ve made some huge cash by changing sunrooms to heated and cooled sq. footage. They usually’re straightforward properties to seek out. It’s sometimes known as out on the MLS listings that they’ve these options. And so you may actually seek for them. Quite a lot of them are usually not heated and cooled. And sure, you may search for properties with basement models. And Dave is totally proper. If you’re properties with basements, you need to be sure you test that ceiling top and test the egress dimension of the home windows since you need to have the ability to legally get any individual out and in of that window within the case of an emergency for it to be counted as an precise bed room. After which you too can have a look at properties with single automotive garages as a result of properties with single automotive garages provide the choice. You may convert these single automotive garages to bedrooms.
However if you’re on the lookout for that, you need to be sure you test the competing properties in that neighborhood since you don’t need to be the one home with a transformed storage. You need to ensure that that’s one thing that’s taking place inside the neighborhood as a result of in the event you’re the one one, then your desirability goes down.

Dave Meyer:
My private favourite nowadays that I’ve been on the lookout for, and I’ve finished this up to now too, is I really like a basement that’s the ceiling top that has a separate entrance.

Henry Washington:
Oh yeah, completely.

Dave Meyer:
Particularly now with all of the upzoning that’s happening in areas, you may flip locations into second models. Test the zoning, however the upside of including a complete nother unit
Is simply monumental. And yeah, we’ve kind of gone on a tangent right here. We began with 5 grand. Now we’re simply speaking about the very best worth. That’s 30 grand, 40 grand, one thing like that. However a complete unit, I imply, that’s going to pay for itself in a 12 months or two. That’s an unbelievable return in your funding. In order that’s one thing I undoubtedly search for. All proper. These had been highlights from our high episodes of 2025. I hope you all loved revisiting these nice episodes as a lot as I did. I hope you might be all having fun with the vacation season as effectively together with your family and friends. We will probably be again within the new 12 months with model new episodes beginning on January 2nd. I’ll see you then.