[0:00] These were the Bigger Pockets podcast
[0:02] episodes that defined real estate
[0:04] investing in 2025.
[0:11] Hey everyone, Dave here. I hope you're
[0:13] all enjoying the holiday season with
[0:15] your friends and family. It has been
[0:17] another transformative year in real
[0:20] estate. The market continues to evolve
[0:22] and the investors who are thriving are
[0:24] the ones who've adapted their strategies
[0:26] to match current conditions rather than
[0:28] waiting for things to go back to normal.
[0:31] On today's show, we're going to recap
[0:32] some of the biggest investing trends and
[0:34] topics we focused on in 2025 by
[0:37] replaying portions of the year's most
[0:39] popular Bigger Pockets podcast episodes.
[0:42] These are the shows that resonated most
[0:44] with the Bigger Pockets community when
[0:45] they were first published. And so I hope
[0:47] revisiting them today will help inspire
[0:50] you as you plan for investing in 2026.
[0:53] We're going to republish a few other
[0:55] popular episodes of the show and from
[0:57] across the entire Bigger Pockets network
[0:59] over the next week and then we will
[1:01] return with brand new podcasts starting
[1:03] on January 2nd. The first episode I'm
[1:06] going to revisit today is back from
[1:07] January because last year I started off
[1:10] the year by sharing my upside era
[1:13] framework for the first time. The idea
[1:15] behind it is that we are in a new era of
[1:19] investing. And even though real estate
[1:21] may not be as obvious as it was a few
[1:24] years ago, it is still the best path to
[1:27] securing your financial future. And it's
[1:29] better than any other way to invest your
[1:31] money. This episode was called the real
[1:34] estate financial freedom formula has
[1:36] changed. It was released in January
[1:38] 2025. And I think my conversation with
[1:41] Henry Washington holds up just as well
[1:44] now as it did almost a full year ago. I
[1:47] think the problem is that we treat
[1:50] financial independence as binary. It's
[1:53] like either you're financially free or
[1:55] you're not. When in reality like it is a
[1:58] path and the goal, at least for me, has
[2:01] always been to just become more
[2:03] financially independent. like every deal
[2:05] you do, every financial decision you
[2:08] make will hopefully put you in a better
[2:10] financial position so you have more
[2:12] flexibility. For some people like Henry,
[2:14] like that flexibility might be going to,
[2:18] you know, going to Europe and just not
[2:19] working for a couple weeks. For me, I
[2:22] rest easy knowing that if Bigger Pockets
[2:25] decided to fire me tomorrow, you know, I
[2:27] could not work for a couple of years and
[2:29] be very comfortable and to me wouldn't
[2:32] consider myself fully financially
[2:34] independent because if I left my job
[2:36] today, I would need to figure out active
[2:38] income just like you, Henry.
[2:40] >> But I am more financially independent
[2:43] than I was 15 years ago before I started
[2:45] investing. And I am more financially
[2:47] independent this year than I was last
[2:49] year and the year before that. and the
[2:51] year before that. And I feel like that
[2:53] really needs to be the goal is just to
[2:55] like keep moving in that direction
[2:57] because honestly, your definition of
[2:59] what financial independence is going to
[3:01] change. Like the amount of money I
[3:04] thought that I would have needed to feel
[3:05] comfortable when I started 15 years ago,
[3:08] I passed that number a while ago. Last
[3:10] time. Yes. Yes. Yes. and my uh my
[3:13] expectations I try not to have lifestyle
[3:15] creep but like
[3:16] >> when you get older and you just have a
[3:19] more sophisticated life like your
[3:21] expenses just go up and so like that's
[3:23] why I feel like setting this goal and
[3:25] saying like I am financially independent
[3:26] or not it's just not realistic. The goal
[3:28] is just to keep making progress.
[3:29] >> Yeah, that's absolutely true. You know,
[3:31] I I was one of those people when I got
[3:33] started that I thought I would buy
[3:37] enough rental properties to produce
[3:39] enough cash flow in current days
[3:42] >> that I would be able to take the cash
[3:44] flow from the rental properties and then
[3:46] when that number of cash flow hit the
[3:48] number of money I made per month in my
[3:51] day job that I could leave my day job
[3:53] and live off of my cash flow. But as I
[3:56] started to buy properties, I started to
[3:58] realize that that wasn't necessarily
[4:01] going to be a thing.
[4:02] >> Mhm.
[4:03] >> I was absolutely buying properties that
[4:05] cash flow. But your business and your
[4:08] properties, they don't function
[4:11] linearly. Like it's not like you buy it
[4:13] and then it cash flows and nothing ever
[4:15] happens or goes wrong. It just makes you
[4:17] it just prints that money every month
[4:18] and it's perfect and the world is great.
[4:20] But that's not the case. Like the more
[4:22] properties you buy, things break at
[4:24] different times. Things break all at the
[4:26] same time. People move in, people move
[4:28] out. Like there's this constant flow of
[4:32] money that it's hard for you to be able
[4:33] to say, "Okay, well, I bought 10
[4:36] properties and each property cash flows
[4:38] $500 a month." And so now I have $5,000
[4:41] every month that I just will take out of
[4:44] this account and spend on my bills. And
[4:46] it like the money is flowing too fluidly
[4:50] for that to be a reality. And so I
[4:52] realized that like if I truly want these
[4:54] properties to pay me cash flow that I
[4:57] could live off of passively, then it's
[4:59] going to happen far into the future when
[5:02] these assets are paid off. And so I I
[5:04] had to pivot my strategy to think, okay,
[5:06] well, how can I use real estate to still
[5:08] buy rentals, but also make cash now so
[5:11] that I can a continue to grow my
[5:12] portfolio, but also stabilize my
[5:14] portfolio and then start to aggressively
[5:16] pay off those properties so I can hit
[5:18] that goal sooner. That wasn't what I
[5:20] thought starting out.
[5:20] >> Totally. Yeah. And I want to ask you
[5:22] about how you've pivoted your business,
[5:24] but I'm just curious first, was that
[5:28] disappointing to you and realizing that,
[5:33] >> you know, that's a that's an interesting
[5:35] question. I don't remember feeling
[5:36] disappointed about it. I just because I
[5:38] was actively in the business at that
[5:40] point and knew I knew I had the
[5:43] foundational skill, which is I know how
[5:44] to go buy a good deal. All I had to
[5:46] change was the way I was monetizing that
[5:48] deal, which was, you know, flipping it
[5:50] and getting, you know, more cash up
[5:52] front versus holding on to it and taking
[5:54] the couple hundred here or there. So,
[5:56] no, it wasn't disappointing because I
[5:58] just love the business of real estate.
[6:00] >> Feels like people are avoiding getting
[6:03] into real estate because we people who
[6:06] are real estate educators, Bigger
[6:07] Pockets is part of this have been
[6:09] saying, hey, you know, you can get real
[6:10] estate financial freedom in a couple of
[6:13] years. And like I said, you know, in
[6:15] during the 2010s, it was always
[6:17] difficult, but it was easier than it was
[6:19] today. It was easier for sure. But I
[6:22] guess I still feel like the prospect and
[6:23] the value of real estate investing is
[6:25] still so strong that it frustrates me
[6:27] when people are like, I'm not going to
[6:29] get in because now it's going to take 10
[6:30] years to be financially freedom or 15
[6:33] years to financial freedom. That's
[6:35] incredible. The average career in the
[6:37] United States is like 45 years. So
[6:39] you're saying you can cut it into a
[6:41] third? Like if that doesn't get you
[6:43] excited, I don't really know like what
[6:45] would. But I do feel like I don't know
[6:47] if you hear this too, but I hear people
[6:48] saying like, "Oh, I can't find cash
[6:50] flow. Like I'm not going to get into
[6:51] it." But like the fundamentals haven't
[6:53] really changed. This is kind of always
[6:55] how it's worked.
[6:55] >> The fundamentals are they haven't
[6:57] changed. They're more important now than
[6:58] they've ever been, right? Like it's the
[7:00] fundamentals you have to stick to now in
[7:02] order to be successful. But yeah, this
[7:06] is the best way to accelerate that path
[7:09] in any manner that a normal person
[7:12] could. Can you do it in other pathways?
[7:14] Can you do it in the stock market? Yeah,
[7:15] but you got to get really good at
[7:17] trading stocks. But the average person
[7:20] in real estate can do this without being
[7:23] a professional real estate investor. And
[7:25] that's incredible.
[7:27] >> Given this, given the reality, it sounds
[7:29] like we agree that it's going to take
[7:31] you 12 to 15 years to do it. In my mind,
[7:34] that's fantastic. And you can sort of be
[7:37] agnostic, at least to me, about how you
[7:39] pursue that active income. Yeah.
[7:41] >> I think there's a good argument to be
[7:42] made that you should just pursue
[7:44] whatever active income makes you the
[7:46] most money. And like for me, that's
[7:48] continuing in a regular job. But it
[7:50] sounds like for you, why did you make
[7:52] that choice knowing that you needed
[7:54] active income to do it through real
[7:56] estate rather than you had a good job,
[7:58] right? Like you had a good corporate job
[7:59] and you chose to leave that. Yes, I did
[8:02] have a great corporate job and I enjoyed
[8:04] my job. That's why I kept it as long as
[8:05] humanly possible. I was gonna do both
[8:08] until I could not do both anymore.
[8:10] Right. Like until I just someone was
[8:12] going to stop me from doing both. Right.
[8:14] Right. And I did. That's what happened
[8:16] is I I I quit when it cost me money to
[8:18] have the job when they wanted me to work
[8:20] more hours and I just couldn't give them
[8:21] more hours because it would take away
[8:23] from what I was doing
[8:24] >> in real estate. But the the answer to
[8:27] your question is I had to choose the
[8:29] real estate because I mean I'm I'm just
[8:31] I'm going to throw it all out here. I
[8:32] was making $110,000 a year, which isn't
[8:35] a ton of money, but it's good money,
[8:37] right? Like it's good money. It's hard
[8:40] not to choose real estate as your
[8:42] full-time income path when I'd have to
[8:46] trade 40 hours a week for 12 months to
[8:50] make $110,000. If you count my bonus, I
[8:53] was probably making closer to $140,000
[8:56] when I could flip two houses and make
[8:58] that. And I could flip two houses in the
[9:01] same month.
[9:01] >> Yeah, when you put it that way.
[9:03] >> Right. Right. We just sold a deal and
[9:05] made 70k like last week. So like and
[9:09] yeah, it took us 5 months to make 70k,
[9:11] but that wasn't the only house I was
[9:13] flipping. Like I had to choose the real
[9:15] estate. It made more financial sense.
[9:17] And also I love it so much more than I
[9:20] loved my day job. I just en I liked my
[9:22] day job. I love doing this.
[9:24] >> So that was me and Henry on episode
[9:27] number 1069 from January. Our next
[9:30] episode today was our most popular show
[9:32] of the year on YouTube. It's an investor
[9:35] story with DeAndre McDonald. This
[9:37] episode really struck a chord with many
[9:39] of you because it proves you can start
[9:41] investing in real estate and change your
[9:43] financial trajectory from almost any
[9:45] starting point. Deandra had $35,000 in
[9:49] debt and got rejected by a lender the
[9:51] first time she tried to buy a property.
[9:53] She eventually got her first deal though
[9:55] with a down payment of less than $4,000.
[9:58] And four years later, she was able to
[10:00] quit her job and become a full-time real
[10:03] estate investor. This is an incredibly
[10:06] inspiring story of taking incremental
[10:08] steps to improve your financial
[10:10] position, one property at a time. Here's
[10:13] my conversation with DeAndre McDonald
[10:15] from episode 1105 back in April. What
[10:18] did you buy? Cuz you said you wanted to
[10:20] live in it. Were you looking for a house
[10:21] hack kind of situation?
[10:23] >> Exactly. Cuz that's all I had. With all
[10:24] that savings, the extra two years, I
[10:26] still could come up with about $5,000
[10:28] cuz I had to pay down the credit card
[10:29] debt and just live. Like that was also a
[10:31] necessity.
[10:32] >> Um but my first purchase was a
[10:34] twobedroom townhouse, just half a duplex
[10:38] where the plan was just to lower my
[10:40] rent. But what actually happened was I
[10:42] moved in. I took the smaller room and I
[10:44] rented out the second room to a roommate
[10:45] which covered my mortgage and that
[10:48] started the full addiction to this whole
[10:50] process of like, oh, I see. Okay. Yeah.
[10:54] >> Yeah. I would imagine that generating
[10:56] that income or saving that money was a
[10:58] lot easier than lifeguarding part. Yeah.
[11:00] I mean, for sure.
[11:01] >> So, like you didn't get to quit your job
[11:03] fully, right? I imagine you were still
[11:05] working full-time, but like sounds like
[11:07] at least improve your quality of life
[11:08] just off that first deal, right?
[11:11] >> Yeah. Even just I got to stop
[11:12] lifeguarding. Yeah. Even just that like
[11:14] I had weekends again. I had a day off
[11:17] that I wasn't thinking about how can I
[11:19] pick up an extra shift? How can I make
[11:22] an extra $20 this weekend because that
[11:24] adds to the pot. I could rest. So even
[11:26] if it was just that, my goodness, I I
[11:29] think this is so important because I
[11:31] think in this industry a lot of the
[11:33] focus has been turned to just like
[11:34] quitting your job. But I love hearing
[11:38] stories like yours where you show that
[11:41] every incremental deal can improve your
[11:43] financial situation and can improve like
[11:45] you're saying your quality of life. Like
[11:48] you actually had this tangible benefit
[11:50] to your life just by buying a single
[11:53] real estate deal. And I really encourage
[11:55] everyone maybe if you haven't gotten
[11:57] that first deal yet to think about that
[11:59] because it's a lot less daunting to
[12:01] think about how do I replace my full W2
[12:04] job. It's like, well, just think about
[12:06] how, you know, can you work a little bit
[12:08] less? Will it give you a little bit more
[12:09] peace of mind just to get that first
[12:11] deal? Uh, it sounds like you did that,
[12:13] but then you got the bug. So, what did
[12:15] you do after your first house hack?
[12:17] >> I kept house hacking for a while, right?
[12:20] I got a better job where I was making
[12:22] more money, but didn't change my
[12:23] lifestyle. And so, every year on the
[12:25] dot, we used to have a joke that I had
[12:27] boxes. I didn't even bother unpacking
[12:28] because it was like, for what? I'm going
[12:29] to I'm going to be gone in a year
[12:31] because now I have this system and I'm
[12:33] like, oh, I live here for a year. I rent
[12:35] it while I'm here. I rent it when I
[12:36] leave. All that extra money goes into
[12:37] the next property. So, every property is
[12:39] bigger, better, uh, more efficient than
[12:42] the last one. I can fix stuff up as I go
[12:44] for years is just what I focused on.
[12:46] >> What area of the country is this?
[12:48] >> I'm in central Virginia, specifically
[12:50] Charlottesville.
[12:51] >> Okay. And it sounds like that first
[12:52] deal, did you just put in five grand?
[12:55] Was that all you had to come up with? I
[12:57] think it w we looked at the numbers, it
[12:58] wound up being like $3,800. Yeah.
[13:01] >> Oh my god, that's amazing. Uh, and so
[13:04] everyone listening to this is jealous.
[13:06] Uh, but just as a reminder, back then it
[13:09] was a lot harder to get a loan, too. As
[13:11] Deandra mentioned, you know, there were
[13:13] trade-offs to every time. So, was that
[13:15] sort of the amount you were shooting to
[13:17] save every single year? Like could you
[13:19] repeat the strategy you were using just
[13:22] saving up $3,800 $5,000 a year and
[13:25] buying something new?
[13:27] >> Exactly. It was like, hey, there is an
[13:29] abundance of properties here under
[13:31] $150,000. Right. I remember now times
[13:34] are different. Like Dave was saying, I
[13:36] remember having a $200,000 budget and
[13:38] being picky.
[13:39] >> Yeah.
[13:40] >> Right. Go going in to say like, I don't
[13:42] like those cabinets. Show me something
[13:43] else. I don't I don't like the wall
[13:46] colors. And that was okay because you
[13:48] had other options. And I want to say
[13:50] this in certain parts of my state that
[13:53] is still very true,
[13:55] >> right? My my area has gotten very very
[13:57] popular. It got very very popular after
[13:59] the world kind of shut down in 2020, but
[14:01] it wasn't that popular 6 years ago where
[14:04] it was still like you had options. And
[14:06] there are surrounding counties and
[14:08] surrounding cities where there are still
[14:10] plenty of options if you were to walk in
[14:11] right now with $200,000 and a desire to
[14:14] live there. But yeah, what happened was
[14:17] I was paying700 a month in rent. So I
[14:20] went from paying 700 a month in rent to
[14:22] nothing. So all I did was save that
[14:24] money.
[14:25] >> Yeah.
[14:25] >> So now instead of saving 3,000, I could
[14:27] save a lot more per month. I took out
[14:29] HELOCs as I would shift from place to
[14:31] place, I got my Airbnbs would do well.
[14:34] All that money just kept being saved and
[14:36] going to the next property.
[14:37] >> And how long were you doing house hack
[14:39] and when did you start doing something
[14:40] else? I was house hacking exclusively
[14:43] for about three years. On year four is
[14:45] when I started experimenting with
[14:46] midterm and short-term because I had
[14:49] duplexes or I had quads that sometimes I
[14:52] would have two or three months between
[14:54] when this tenant ended and the next
[14:56] tenant who wants to come starts. So what
[14:58] do I do in this time frame? Oh, I could
[14:59] rent to a traveling nurse for two months
[15:02] or put it on short-term rentals cuz I
[15:04] had some extra furniture. And they're
[15:05] like, "Oh, this is great. I can play
[15:08] with all of these whenever I need them
[15:10] instead of sticking to one thing. That
[15:12] was my conversation with DeAndre
[15:13] McDonald on Bigger Pockets podcast
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[15:50] Henry, it's holiday season. What do you
[15:53] get a real estate investor for the
[15:55] holidays?
[15:55] >> Well, if that real estate investor is
[15:57] me, you can get me a 15un apartment
[15:59] building.
[15:59] >> Oh, does that work? Do people just send
[16:00] you apartment buildings?
[16:02] >> They are. now.
[16:03] >> Well, I got a suggestion. Actually, if
[16:05] you are looking for a gift to get a real
[16:07] estate investor, buy them a ticket to
[16:09] the upcoming Texas Cash Flow Road Show.
[16:12] We're going to be in Texas. We're going
[16:13] to Austin, Houston, and Dallas from
[16:15] January 13th to 16th. We're going to be
[16:18] having meetups, workshops, live podcast
[16:20] recording. We'd love to see you all
[16:22] there. So, if you're thinking you got a
[16:23] friend in the Texas area and they're
[16:25] trying to get into real estate
[16:26] investing, they're trying to scale their
[16:28] portfolio, go to biggerpockets.com/tex
[16:31] and go buy them a ticket. Our next clip
[16:33] has a similar theme. Anet Monroe was
[16:36] feeling unfulfilled with her corporate
[16:38] career when she fell into real estate
[16:40] investing almost accidentally.
[16:42] Investing, however, not only gave her
[16:44] the financial freedom to ultimately
[16:47] leave her job, but it also gave her a
[16:49] sense of purpose when she began
[16:51] operating assisted living facilities.
[16:53] Like Deandra, Antuinette's story shows
[16:56] that even a small portfolio can make a
[16:58] huge impact on your financial future and
[17:01] your community. This is me with
[17:03] Antoinette from episode number 1120.
[17:06] So I spent that entire first year kind
[17:09] of digging through all of the Bigger
[17:10] Pockets forums, listening to all the
[17:12] podcasts to understand, okay, what do
[17:15] you do next when you've done this? I
[17:17] learned about house hacking. I realized
[17:18] that that's what I was doing. But then
[17:20] also the burr strategy and that is how I
[17:23] got my second deal. So in 2019, I
[17:26] purchased an offmarket deal from my
[17:29] neighbor in my the neighborhood I grew
[17:31] up in. So I had a direct connect to the
[17:33] seller. Uh, and that deal I was able to
[17:36] get under contract for under 200,000. It
[17:39] only needed about 30 or 40 worth of
[17:41] work. And through some tips that I got
[17:44] off the Bigger Pockets forum, I was able
[17:45] to refinance that house and get all of
[17:48] my cash back within 45 days of closing.
[17:50] >> Wow. Amazing. I'd love to dig into that
[17:52] because I think this is one of these
[17:54] deals that people listening are going to
[17:55] be like, I want one of those. Give me
[17:57] that. So, tell me a little bit how the
[18:00] offmarket deal comes up because we
[18:03] always hear about offmarket deals.
[18:04] They're great and they kind of just this
[18:06] magical thing and I think how how did
[18:09] this one come about? Did your neighbor
[18:11] know you were buying houses or tell us
[18:14] about it.
[18:15] >> Well, no, cuz at the time I wasn't. I
[18:17] just had the the one house. But my mom
[18:19] knew that I I was learning to be a real
[18:21] estate investor and I wanted to do that.
[18:23] So talking to her one day, she
[18:25] mentioned, "Hey, the neighbor across the
[18:26] street, she's planning to move to
[18:27] Georgia to be with her kids because
[18:29] she's getting older." And I was like,
[18:30] "Ah, I know what this is. I heard that
[18:32] podcast. This is a wholesale deal." So I
[18:34] was like, "Get her number. I'm going to
[18:36] call her." And so I called her, found
[18:40] out what she was interested in doing. I
[18:42] went through all of the steps of the
[18:44] things that I learned about from a
[18:45] wholesale deal. I was not a good
[18:47] negotiator, so I was just like, you
[18:48] know, what is it that you want for it?
[18:50] I'll agree to that because the numbers
[18:52] worked out.
[18:53] >> Yeah. Which is kind of a win-win
[18:55] situation right?
[18:56] >> Yeah. And so she still talked to a
[18:58] couple different wholesalers and I
[18:59] explained to her I was like, you know,
[19:01] they're going to give you offers, then
[19:02] they're going to come and look at it and
[19:04] then they're going to whittle that offer
[19:05] down based on the expenses that they
[19:07] have. So they'll they'll do whatever to
[19:08] get you under contract. But ultimately,
[19:10] I think I was able to get that deal
[19:12] because of the personal relationship and
[19:14] she was getting the price that she
[19:15] wanted and that was enough for her. So
[19:17] it's one of those, you know, sometimes
[19:18] right place, right time. You know, you
[19:20] never know when that deal will come, but
[19:22] if you're putting out what you're
[19:23] interested in or what you're looking
[19:24] for, then people usually try to help.
[19:26] So, I told my mom, I want to be a real
[19:28] estate investor. I want to buy more
[19:29] properties.
[19:30] >> So, anytime now her ears are open when
[19:32] she hears about opportunities, she's
[19:34] going to think of me and give me a call.
[19:36] >> Well, I love that. Good for you. That's
[19:38] amazing story about sort of this
[19:40] combination of like serendipity and
[19:42] circumstance, but also being prepared
[19:44] for it.
[19:45] >> Prepared. Yes. If I hadn't been
[19:47] listening to the podcast, if I hadn't
[19:49] been doing the research and
[19:50] understanding, that opportunity would
[19:52] have came and I wouldn't have known what
[19:53] to do with it or how to like actually
[19:56] make it work.
[19:57] >> Yeah. Your mom would have said, "Hey,
[19:58] our neighbors moving." You've been like,
[19:59] "Oh, cool. I hope they enjoy Georgia."
[20:01] You know, like you wouldn't have been
[20:03] thinking about how could you potentially
[20:05] create a mutually beneficial situation
[20:08] for yourself and for this person. So,
[20:10] you it was single family home, I assume,
[20:12] and you were just your plan was to turn
[20:14] into a rental. Yes. So, it was a single
[20:17] family. I put it under contract before I
[20:19] saw it. I just had like the memories I'd
[20:21] been in here before as a kid, you know,
[20:23] similar to my house.
[20:24] >> That's kind of fun.
[20:25] >> But once I closed on it, I came down and
[20:27] saw that they had done addition to it
[20:29] that made it a much larger single family
[20:31] than I knew. And the layout made it, you
[20:33] know, conducive for a split, which is
[20:35] what I did with the first house. I
[20:36] bought a single family, split it in
[20:39] half, and kind of made two units out of
[20:41] it right up to the line of being in
[20:43] trouble with code. like just
[20:45] >> just towing that line. Yeah. Okay.
[20:47] >> Yeah. So, I saw this opportunity in that
[20:49] house as well and I did the same thing.
[20:50] I just dropped a wall through the middle
[20:52] of it, made a one bed, one bath studio
[20:55] in the back with a kitchenette cuz
[20:57] kitchens mean code issues. And then kept
[20:59] the 31 in the front. And I was able to
[21:03] rent both sides out. Um, one to a family
[21:07] member because anytime you're doing
[21:08] something, there's always somebody
[21:10] watching. So immediately one half went
[21:12] to a family member and the other half I
[21:14] used a realtor to get rented out.
[21:16] >> Okay, great. You said you bought it for
[21:18] under 200 grand. You had to put like 30
[21:20] or 40 grand in. How did you finance all
[21:22] of that?
[21:22] >> So with the first project, I had
[21:26] improved it and then added 700 ft². So
[21:28] there was a good bit of equity in that
[21:30] home.
[21:30] >> Um I learned on the forms that I should
[21:32] pull home equity lines of credit. So I
[21:34] had one existing and ready to go on that
[21:37] first home. So, I was able to buy this
[21:39] outright in cash using the equity from
[21:41] the home equity loan. And then I
[21:44] borrowed private money from my
[21:46] brother-in-law to complete the
[21:48] renovation on that second home. So, it
[21:50] was a combination of all the things you
[21:51] learn. There was that home equity line
[21:53] of credit.
[21:54] >> There was borrowing money from my
[21:56] brother-in-law. And then the hack that I
[21:58] use as my strategy to make single
[22:00] families have twice as much cash flow.
[22:02] >> That's great.
[22:03] >> Which is splitting them in half. If you
[22:05] want to hear more of Antwanet's amazing
[22:07] investing journey, make sure to check
[22:09] out episode 1120. Next up is a
[22:12] conversation I had with Henry Washington
[22:14] in August about the Burr method.
[22:16] Popularizing the Burr is one of Bigger
[22:18] Pocket's biggest contributions to real
[22:20] estate investing. It's an extremely
[22:22] powerful strategy that allows investors
[22:25] to recycle their cash and scale quickly.
[22:27] But there has been a narrative recently
[22:30] that the burr is debt. Some people say
[22:32] it's outdated in an era with mortgage
[22:35] rates over 6%. So Henry and I wanted to
[22:38] talk this through and discuss whether
[22:40] that's true and how you can update the
[22:42] burr to still make it work today. This
[22:45] is from episode 1165.
[22:48] >> It was a whole lot easier to find deals
[22:51] to burr 3 years ago. We still find them
[22:54] now, but less frequently. Flip numbers
[22:57] tend to make more sense in this market
[22:59] than than rental numbers. But because
[23:02] we're looking for deals in volume and
[23:05] we're finding deals in volume, every so
[23:07] often we get one that makes a great
[23:09] burr. And then I think you have to put
[23:11] some parameters around burr mostly like
[23:14] a timeline.
[23:15] >> Yeah. Because you can buy, renovate,
[23:19] rent, and then refinance in a short
[23:22] period of time, or you can do it in a
[23:24] much longer period of time. I've
[23:27] refinanced multiple properties this year
[23:30] and pulled cash out of them. When I
[23:33] bought them 3 to 5 years ago,
[23:36] >> and I just put them on adjustable rates,
[23:38] and that adjustable rate now came due. I
[23:41] refinanced it into a 30-year fixed and
[23:43] pulled cash out. And those long-term
[23:46] burrs are still burrs.
[23:47] >> Henry, that's a great point. I think
[23:48] it's a really important caveat cuz I've
[23:50] been calling it the delayed burr or
[23:53] people in YouTube gave me new ideas of
[23:55] what to call it cuz I suck at this, but
[23:57] I couldn't come up with a better name of
[23:58] it. We'll call it the delayed burr. But
[24:00] I think there's two different things
[24:01] that you can do. One thing I' I've been
[24:02] doing is delaying the renovation. You
[24:04] buy something that's actually fully
[24:07] occupied rather than vacant. and not
[24:10] trying to do the burr on this flip
[24:12] timeline cuz like as you said there is
[24:14] this approach to take doing the burr
[24:16] method which is like I'm going to do
[24:18] this in 6 months or whatever. I'm going
[24:19] to get in there. I'm going to renovate
[24:20] it quickly. I'm going to get rents up to
[24:22] market rate. Then I'm going to do this
[24:24] cash out and I'm going to go acquire the
[24:26] next deal really rapidly. And that did
[24:29] work really well for a while. I think
[24:31] it's hard to line up two deals like
[24:34] you're saying. I I can't do it right now
[24:36] realistically, but even you, Kenry, it
[24:38] sounds like it it would be hard to even
[24:40] line up to Burrs in that time frame
[24:43] where it would even be advantageous for
[24:45] you to even do that. And so what you
[24:47] could do is either take sort of the more
[24:49] delayed approach, which is getting the
[24:51] occupied units and opportunistically
[24:53] renovating when there's time or, you
[24:56] know, doing the renovation up front, but
[24:58] not refinancing until you need the
[25:00] capital. I'm actually looking at
[25:02] refinancing a deal I bought like six
[25:05] years ago because it's cash flowing
[25:07] well, but like I think that there's
[25:08] going to be good deals coming and I'm
[25:10] seeing more deals coming and I just
[25:11] might want to free up some capital and
[25:13] so I'll just do the refinance, but it's
[25:15] way later.
[25:15] >> Yep. I think when when Burr was
[25:17] originally pitched, it was pitched as a
[25:20] way to scale a real estate business
[25:22] because you could line up backtoback
[25:25] burrs and you could repeat this process
[25:28] and you can still repeat it. I think the
[25:30] timeline for the normal investor is just
[25:33] going to be longer.
[25:34] >> I think that's right. There is this
[25:36] assumption in this question and I get
[25:38] this question all the time. I'm sure you
[25:39] do too. Like, do burrs work? Is it dead?
[25:42] There is this assumption that the only
[25:44] reason to do a burr is that you can
[25:47] refinance 100% of your capital.
[25:50] >> Full burr. You got to
[25:52] >> Right. Exactly. You need the per quote
[25:54] unquote perfect burr or full burr. But
[25:57] that is not that common. like yeah maybe
[26:00] if you're doing Henry's kind of deals
[26:01] and you're in the right market at the
[26:03] right time that can be common but I
[26:05] think if you just kind of like reframe
[26:07] the conversation and don't assume that
[26:09] you need to take 100% of your capital
[26:12] out then I would say burr is absolutely
[26:14] still a way to grow your business you're
[26:16] still able to refinance some of your
[26:18] money out and you're buying ideally if
[26:21] you're doing it right a cash flowing
[26:23] rental property that has you've built
[26:25] equity in you're getting some of your
[26:27] money out of it to go scale Again,
[26:29] that's still a win even if it's not
[26:31] perfectly super 100% recycling of your
[26:34] capital like it was for that brief
[26:36] moment in time.
[26:37] >> Can I give you a hot take?
[26:39] >> Yes. That's why you're here.
[26:41] >> Even when burrs were easy to do, I
[26:44] didn't really like doing them.
[26:46] >> Really? Why?
[26:47] >> I didn't like pulling my cash out. Like
[26:49] I liked the cash flow.
[26:50] >> That's the other thing. Yeah.
[26:51] >> When you refinance a deal, what's
[26:54] essentially what you're doing is you're
[26:55] getting a new loan at a higher amount.
[26:58] >> Yeah. And that new loan at a higher
[26:59] amount comes with a mortgage payment.
[27:01] Yeah. And that mortgage payment is going
[27:02] to be higher than the previous one
[27:04] because now it's a higher mortgage. When
[27:07] you get a new mortgage, they frontload
[27:09] the interest in the first 5 to seven
[27:11] years. And so most of your payment is
[27:13] going to interest. And so you put this
[27:15] money in your pocket.
[27:17] >> And a lot of people, especially the
[27:20] casual investor, may not have had the
[27:21] next burr lined up. They pulled their
[27:24] cash out of their last spur and then
[27:26] they blow a chunk of it before they get
[27:29] to their next deal and then that kills
[27:31] the like it kills the purpose. What I
[27:33] was doing and what I still like to do is
[27:35] instead of refinance, I just get access
[27:37] to a line of credit on that equity and
[27:39] then that way I don't get a new loan at
[27:41] a higher amount. I keep my lower
[27:43] mortgage payment, which keeps my cash
[27:44] flow, and then I have access to the
[27:47] money in the event I need it instead of
[27:49] just pulling it out and starting to pay
[27:51] on a new loan and then not spending that
[27:54] money wisely.
[27:55] >> Yeah, cuz that's a great point. If you
[27:56] don't immediately reinvest your capital
[27:58] that you pull out,
[28:00] >> you're essentially just reducing your
[28:01] cash flow for no reason, right?
[28:03] >> That to me is a is a really important
[28:05] thing.
[28:07] Adding value to your properties is one
[28:09] of the key skills for almost every
[28:11] investor making deals right now. Because
[28:13] in most places, you can't just go out
[28:15] there and buy properties off the MLS and
[28:18] get a lot of cash flow. But with just a
[28:20] little bit of effort, a little bit of
[28:22] improvement, you can drive up values and
[28:24] rent at the same time and make deals
[28:26] work. That's what episode 1088 from
[28:29] February was all about. Here's me and
[28:31] Henry again. Now, before we move on, you
[28:34] can sometimes add direct value for under
[28:39] five grand if your property is set up
[28:41] for you to do so.
[28:42] >> Yes.
[28:43] >> An example of this that we did recently,
[28:45] this wasn't a flip, but could have been
[28:46] a rental, right? And so, what happened
[28:48] was we had a two bed, onebath house, and
[28:51] that one bath house had a laundry room.
[28:55] And that laundry room was very big. Big
[28:58] enough that it could have been a small
[28:59] bedroom. Mhm.
[29:00] >> This house also had a sun room. Now,
[29:05] this sun room was not heated and cooled
[29:07] and was dilapidated. And so, what we
[29:09] were able to do was to move the laundry
[29:13] into the sun room. We finished the sun
[29:15] room
[29:16] >> by just putting insulation in the walls
[29:19] and drywalling the ceiling cuz it was
[29:21] just kind of like an open beam ceiling.
[29:24] We added insulation and drywall in the
[29:26] ceiling. We painted the concrete floor.
[29:28] We moved the laundry in there. And then
[29:30] we added a mini split air conditioning
[29:32] unit into that sun room.
[29:34] >> Yes.
[29:34] >> So by doing that, we were able to spend
[29:37] probably about five grand. And so we
[29:40] added square footage. Even though it was
[29:42] already under roof, that square footage
[29:44] wasn't counted in the heated and cooled
[29:46] square footage of the house because
[29:47] there was no air conditioning. So by
[29:49] adding a mini split, we added about 200
[29:51] ft² to the house. And by moving the
[29:53] laundry into that room, we were able to
[29:55] create a third bedroom. And so that
[29:58] $5,000 allowed us to sell this house for
[30:01] $220,000
[30:02] instead of $200,000. So I spent five and
[30:06] I sold it for an extra 20. So that's
[30:08] $15,000 worth of additional value for
[30:10] spending $5,000
[30:11] >> and not that much work, right? Like not
[30:13] even that that much time.
[30:15] >> So if you have a property, if you're
[30:16] listening to this and you have a
[30:18] property and you're considering doing
[30:19] something like this, do you have a room
[30:20] in that property that is not under roof?
[30:23] Do you have a room in that property that
[30:25] could be a bedroom instead of like a
[30:26] dining room? Right. People don't really
[30:28] use formal dining rooms. I like to
[30:30] convert those to bedrooms.
[30:31] >> I just did that in a property the other
[30:34] day. There was like a front little
[30:35] thing. I just put a door up. It costs
[30:37] like $600. I'm getting probably 22 250
[30:41] more a month in rent because of that.
[30:43] >> Boom. Can you convert a garage? A lot of
[30:46] the times singlecar garages people don't
[30:48] use to park in. They use to store stuff.
[30:51] I have a couple units in Joplain,
[30:52] Missouri where their singlecar garages.
[30:55] And when I bought the properties, every
[30:57] single one of the garages was using was
[30:59] stored stuff. No one was parking in it,
[31:01] right?
[31:01] >> So, we spend about five grand, convert
[31:03] the garage uh into a bedroom, and now we
[31:07] get an extra $300 to $500 a month rent
[31:10] out of each one of those units.
[31:11] >> This is really sort of the best advice
[31:13] because I think it's important for
[31:15] people to realize that this isn't luck.
[31:18] It's not like Henry bought this house
[31:20] and was like, "Oh, I found this sun room
[31:22] and I can convert it." Like, this is the
[31:24] stuff you need to be looking for when
[31:26] you're actually going to buy properties.
[31:29] Cuz anyone can theoretically add a
[31:32] bedroom, but if you're popping a top and
[31:35] taking off a roof and rebuilding that,
[31:37] that's going to be a very expensive
[31:38] proposition. That's going to take a long
[31:40] time. Or you can find these properties
[31:42] that are set up for it. You know, those
[31:45] are good examples. I did something very
[31:47] similar. I would uh uh with my
[31:48] short-term rental, I wanted a 4bedroom
[31:52] house. I I needed that to get my
[31:54] revenue. All of them were super
[31:56] expensive. But I found a three-bedroom
[31:58] house with that had like a 400 square ft
[32:02] second living room. No one was using it.
[32:05] And it's in a walk out, but it already
[32:06] had an egress window built, so I didn't
[32:08] even have to do that. It had a closet.
[32:11] It was basically all I needed to do was
[32:12] put up drywall, another bedroom.
[32:14] especially if you're new to value ad.
[32:16] These are the kinds of properties that
[32:18] you can really start to target. The
[32:21] other thing where I invest a lot of
[32:23] places at basement and finishing them
[32:25] out is kind of a no-brainer. You look
[32:28] for ones that have the right ceiling
[32:30] height. Yep.
[32:30] >> Um that have a good foundation that have
[32:33] big enough windows for egress. Like you
[32:36] don't want to dig out the foundation.
[32:37] But those types of things, like that's
[32:40] just really easy types of of value ad
[32:44] that really have a tangible, measurable,
[32:48] proven way of adding value.
[32:50] >> One of the first things you want to look
[32:51] for are look for homes that have bedroom
[32:55] and bathroom counts where the square
[32:57] footage seems too big for that bedroom
[33:00] and bathroom count.
[33:01] >> Yes. Yeah. Like a 2400 square foot with
[33:04] two beds. Exactly. That's not right. If
[33:06] you've got over 2,000 square ft,
[33:08] two-bedroom house, there is room to
[33:10] convert something to a bedroom. There is
[33:12] room to add some value. If you're
[33:15] looking at a three bed, two bath house
[33:16] and it's got 2500 to 3500 ft², there's
[33:20] probably room.
[33:21] >> Look for properties that have sun rooms.
[33:24] Sunrooms typically are not heated and
[33:27] cooled. And you can easily add some
[33:29] drywall and add some flooring and add
[33:32] some insulation and a mini split air
[33:34] conditioning unit and you can get added
[33:37] square footage.
[33:38] >> No, sorry. I'm just laughing cuz this is
[33:40] this is just bringing up my childhood.
[33:43] My dad did this where he like converted
[33:44] a sun room to my bedroom. I just think
[33:47] he skipped the insulation and adding
[33:49] heat part because it was just freezing
[33:52] my entire life. And it was this was in
[33:54] New York. I was just always cold. There
[33:56] was never heat. I think he he might have
[33:58] missed that critical step.
[34:00] >> Yes. Yes. Sun rooms. We have we have
[34:03] made a lot of money by converting sun
[34:06] rooms to heated and cooled square
[34:07] footage and they're easy properties to
[34:09] find. It's typically called out on the
[34:12] MLS listings that they have those
[34:14] features and so you can literally search
[34:16] for them. A lot of them are not heated
[34:17] and cooled. And yes, you can look for
[34:19] properties with basement units. And uh
[34:22] Dave is absolutely right. When you're
[34:24] looking at properties with basements,
[34:25] you want to make sure you check that
[34:26] ceiling height and check the egress size
[34:28] of the windows because you want to be
[34:31] able to legally get somebody in and out
[34:33] of that window in the case of an
[34:34] emergency for it to be counted as an
[34:36] actual bedroom. And then you can also
[34:37] look at properties with singlecar
[34:40] garages because properties with
[34:41] singlecar garages give you the option
[34:43] you can convert those singlecar garages
[34:45] to bedrooms. But when you're looking for
[34:47] that, you want to make sure you check
[34:48] the competing properties in that
[34:50] neighborhood because you don't want to
[34:51] be the only house with a converted
[34:53] garage. You want to make sure that that
[34:55] is something that is happening within
[34:56] the neighborhood because if you're the
[34:58] only one, then your desiraability goes
[35:00] down.
[35:01] >> My personal favorite these days that
[35:03] I've been looking for, and I've done
[35:04] this in the past, too, is I love a
[35:07] basement that is the ceiling height that
[35:09] has a separate entry.
[35:10] >> Oh, yeah. Absolutely. Especially now
[35:12] with all the upzoning that's going on in
[35:14] in areas like you could turn places into
[35:17] second units. Check the zoning, but the
[35:19] upside of adding a whole another unit is
[35:21] just enormous. And yeah, we've sort of
[35:24] gone on a in a tangent here. We started
[35:25] with five grand. Now we're just talking
[35:27] about the best value that's 30 grand, 40
[35:29] grand, you know, something like that.
[35:30] But a whole unit, I mean, that's going
[35:32] to pay for itself in a year or two.
[35:33] That's an incredible return on your
[35:35] investment. So that that's something I
[35:36] definitely look for. All right, those
[35:39] were highlights from our top episodes of
[35:41] 2025. I hope you all enjoyed revisiting
[35:44] these great episodes as much as I did. I
[35:47] hope you are all enjoying the holiday
[35:50] season as well with your friends and
[35:52] family. We will be back in the new year
[35:54] with brand new episodes starting on
[35:56] January 2nd. I'll see you then.
[36:03] Heat