---
title: 'Want to Invest in Real Estate in 2026? Watch This FIRST.'
source: 'https://youtube.com/watch?v=2IeTG-WbTPA'
video_id: '2IeTG-WbTPA'
date: 2026-07-01
duration_sec: 2178
---

# Want to Invest in Real Estate in 2026? Watch This FIRST.

> Source: [Want to Invest in Real Estate in 2026? Watch This FIRST.](https://youtube.com/watch?v=2IeTG-WbTPA)

## Summary

This video recaps the most popular Bigger Pockets podcast episodes of 2025, focusing on key investing trends and strategies for the upcoming year. It features interviews with successful investors who share their journeys from debt to financial independence, and discusses adapting classic methods like the BRRRR to current market conditions. The core message is that real estate remains a powerful path to financial freedom, but requires a shift in mindset and strategy.

### Key Points

- **Redefining Financial Independence** [01:50] — Financial independence is not a binary state but a continuous path of improvement. Every deal should put you in a better financial position.
- **DeAndre McDonald's Journey** [09:45] — DeAndre McDonald started with $35,000 in debt and a $3,800 down payment, eventually quitting her job in four years through house hacking and incremental deals.
- **Antoinette Monroe's BRRRR Success** [17:20] — Antoinette Monroe used an off-market deal from a neighbor and the BRRRR strategy to get all her cash back within 45 days, scaling her portfolio.
- **The Delayed BRRRR** [23:50] — The BRRRR method is not dead; it has evolved into a 'delayed BRRRR' where you take a longer timeline to renovate and refinance, still recycling capital.
- **Low-Cost Value-Add Example** [28:45] — Converting a sunroom into a bedroom for $5,000 can increase a property's value by $20,000, demonstrating the power of low-cost value-add strategies.
- **Identifying Value-Add Opportunities** [32:50] — Look for properties with large square footage relative to bedroom count, sunrooms, or single-car garages that can be converted to add value.

## Transcript

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