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

[00:00] These were the Bigger Pockets podcast

[00:02] episodes that defined real estate

[00:04] investing in 2025.

[00:11] Hey everyone, Dave here. I hope you're

[00:13] all enjoying the holiday season with

[00:15] your friends and family. It has been

[00:17] another transformative year in real

[00:20] estate. The market continues to evolve

[00:22] and the investors who are thriving are

[00:24] the ones who've adapted their strategies

[00:26] to match current conditions rather than

[00:28] waiting for things to go back to normal.

[00:31] On today's show, we're going to recap

[00:32] some of the biggest investing trends and

[00:34] topics we focused on in 2025 by

[00:37] replaying portions of the year's most

[00:39] popular Bigger Pockets podcast episodes.

[00:42] These are the shows that resonated most

[00:44] with the Bigger Pockets community when

[00:45] they were first published. And so I hope

[00:47] revisiting them today will help inspire

[00:50] you as you plan for investing in 2026.

[00:53] We're going to republish a few other

[00:55] popular episodes of the show and from

[00:57] across the entire Bigger Pockets network

[00:59] over the next week and then we will

[01:01] return with brand new podcasts starting

[01:03] on January 2nd. The first episode I'm

[01:06] going to revisit today is back from

[01:07] January because last year I started off

[01:10] the year by sharing my upside era

[01:13] framework for the first time. The idea

[01:15] behind it is that we are in a new era of

[01:19] investing. And even though real estate

[01:21] may not be as obvious as it was a few

[01:24] years ago, it is still the best path to

[01:27] securing your financial future. And it's

[01:29] better than any other way to invest your

[01:31] money. This episode was called the real

[01:34] estate financial freedom formula has

[01:36] changed. It was released in January

[01:38] 2025. And I think my conversation with

[01:41] Henry Washington holds up just as well

[01:44] now as it did almost a full year ago. I

[01:47] think the problem is that we treat

[01:50] financial independence as binary. It's

[01:53] like either you're financially free or

[01:55] you're not. When in reality like it is a

[01:58] path and the goal, at least for me, has

[02:01] always been to just become more

[02:03] financially independent. like every deal

[02:05] you do, every financial decision you

[02:08] make will hopefully put you in a better

[02:10] financial position so you have more

[02:12] flexibility. For some people like Henry,

[02:14] like that flexibility might be going to,

[02:18] you know, going to Europe and just not

[02:19] working for a couple weeks. For me, I

[02:22] rest easy knowing that if Bigger Pockets

[02:25] decided to fire me tomorrow, you know, I

[02:27] could not work for a couple of years and

[02:29] be very comfortable and to me wouldn't

[02:32] consider myself fully financially

[02:34] independent because if I left my job

[02:36] today, I would need to figure out active

[02:38] income just like you, Henry.

[02:40] >> But I am more financially independent

[02:43] than I was 15 years ago before I started

[02:45] investing. And I am more financially

[02:47] independent this year than I was last

[02:49] year and the year before that. and the

[02:51] year before that. And I feel like that

[02:53] really needs to be the goal is just to

[02:55] like keep moving in that direction

[02:57] because honestly, your definition of

[02:59] what financial independence is going to

[03:01] change. Like the amount of money I

[03:04] thought that I would have needed to feel

[03:05] comfortable when I started 15 years ago,

[03:08] I passed that number a while ago. Last

[03:10] time. Yes. Yes. Yes. and my uh my

[03:13] expectations I try not to have lifestyle

[03:15] creep but like

[03:16] >> when you get older and you just have a

[03:19] more sophisticated life like your

[03:21] expenses just go up and so like that's

[03:23] why I feel like setting this goal and

[03:25] saying like I am financially independent

[03:26] or not it's just not realistic. The goal

[03:28] is just to keep making progress.

[03:29] >> Yeah, that's absolutely true. You know,

[03:31] I I was one of those people when I got

[03:33] started that I thought I would buy

[03:37] enough rental properties to produce

[03:39] enough cash flow in current days

[03:42] >> that I would be able to take the cash

[03:44] flow from the rental properties and then

[03:46] when that number of cash flow hit the

[03:48] number of money I made per month in my

[03:51] day job that I could leave my day job

[03:53] and live off of my cash flow. But as I

[03:56] started to buy properties, I started to

[03:58] realize that that wasn't necessarily

[04:01] going to be a thing.

[04:02] >> Mhm.

[04:03] >> I was absolutely buying properties that

[04:05] cash flow. But your business and your

[04:08] properties, they don't function

[04:11] linearly. Like it's not like you buy it

[04:13] and then it cash flows and nothing ever

[04:15] happens or goes wrong. It just makes you

[04:17] it just prints that money every month

[04:18] and it's perfect and the world is great.

[04:20] But that's not the case. Like the more

[04:22] properties you buy, things break at

[04:24] different times. Things break all at the

[04:26] same time. People move in, people move

[04:28] out. Like there's this constant flow of

[04:32] money that it's hard for you to be able

[04:33] to say, "Okay, well, I bought 10

[04:36] properties and each property cash flows

[04:38] $500 a month." And so now I have $5,000

[04:41] every month that I just will take out of

[04:44] this account and spend on my bills. And

[04:46] it like the money is flowing too fluidly

[04:50] for that to be a reality. And so I

[04:52] realized that like if I truly want these

[04:54] properties to pay me cash flow that I

[04:57] could live off of passively, then it's

[04:59] going to happen far into the future when

[05:02] these assets are paid off. And so I I

[05:04] had to pivot my strategy to think, okay,

[05:06] well, how can I use real estate to still

[05:08] buy rentals, but also make cash now so

[05:11] that I can a continue to grow my

[05:12] portfolio, but also stabilize my

[05:14] portfolio and then start to aggressively

[05:16] pay off those properties so I can hit

[05:18] that goal sooner. That wasn't what I

[05:20] thought starting out.

[05:20] >> Totally. Yeah. And I want to ask you

[05:22] about how you've pivoted your business,

[05:24] but I'm just curious first, was that

[05:28] disappointing to you and realizing that,

[05:33] >> you know, that's a that's an interesting

[05:35] question. I don't remember feeling

[05:36] disappointed about it. I just because I

[05:38] was actively in the business at that

[05:40] point and knew I knew I had the

[05:43] foundational skill, which is I know how

[05:44] to go buy a good deal. All I had to

[05:46] change was the way I was monetizing that

[05:48] deal, which was, you know, flipping it

[05:50] and getting, you know, more cash up

[05:52] front versus holding on to it and taking

[05:54] the couple hundred here or there. So,

[05:56] no, it wasn't disappointing because I

[05:58] just love the business of real estate.

[06:00] >> Feels like people are avoiding getting

[06:03] into real estate because we people who

[06:06] are real estate educators, Bigger

[06:07] Pockets is part of this have been

[06:09] saying, hey, you know, you can get real

[06:10] estate financial freedom in a couple of

[06:13] years. And like I said, you know, in

[06:15] during the 2010s, it was always

[06:17] difficult, but it was easier than it was

[06:19] today. It was easier for sure. But I

[06:22] guess I still feel like the prospect and

[06:23] the value of real estate investing is

[06:25] still so strong that it frustrates me

[06:27] when people are like, I'm not going to

[06:29] get in because now it's going to take 10

[06:30] years to be financially freedom or 15

[06:33] years to financial freedom. That's

[06:35] incredible. The average career in the

[06:37] United States is like 45 years. So

[06:39] you're saying you can cut it into a

[06:41] third? Like if that doesn't get you

[06:43] excited, I don't really know like what

[06:45] would. But I do feel like I don't know

[06:47] if you hear this too, but I hear people

[06:48] saying like, "Oh, I can't find cash

[06:50] flow. Like I'm not going to get into

[06:51] it." But like the fundamentals haven't

[06:53] really changed. This is kind of always

[06:55] how it's worked.

[06:55] >> The fundamentals are they haven't

[06:57] changed. They're more important now than

[06:58] they've ever been, right? Like it's the

[07:00] fundamentals you have to stick to now in

[07:02] order to be successful. But yeah, this

[07:06] is the best way to accelerate that path

[07:09] in any manner that a normal person

[07:12] could. Can you do it in other pathways?

[07:14] Can you do it in the stock market? Yeah,

[07:15] but you got to get really good at

[07:17] trading stocks. But the average person

[07:20] in real estate can do this without being

[07:23] a professional real estate investor. And

[07:25] that's incredible.

[07:27] >> Given this, given the reality, it sounds

[07:29] like we agree that it's going to take

[07:31] you 12 to 15 years to do it. In my mind,

[07:34] that's fantastic. And you can sort of be

[07:37] agnostic, at least to me, about how you

[07:39] pursue that active income. Yeah.

[07:41] >> I think there's a good argument to be

[07:42] made that you should just pursue

[07:44] whatever active income makes you the

[07:46] most money. And like for me, that's

[07:48] continuing in a regular job. But it

[07:50] sounds like for you, why did you make

[07:52] that choice knowing that you needed

[07:54] active income to do it through real

[07:56] estate rather than you had a good job,

[07:58] right? Like you had a good corporate job

[07:59] and you chose to leave that. Yes, I did

[08:02] have a great corporate job and I enjoyed

[08:04] my job. That's why I kept it as long as

[08:05] humanly possible. I was gonna do both

[08:08] until I could not do both anymore.

[08:10] Right. Like until I just someone was

[08:12] going to stop me from doing both. Right.

[08:14] Right. And I did. That's what happened

[08:16] is I I I quit when it cost me money to

[08:18] have the job when they wanted me to work

[08:20] more hours and I just couldn't give them

[08:21] more hours because it would take away

[08:23] from what I was doing

[08:24] >> in real estate. But the the answer to

[08:27] your question is I had to choose the

[08:29] real estate because I mean I'm I'm just

[08:31] I'm going to throw it all out here. I

[08:32] was making $110,000 a year, which isn't

[08:35] a ton of money, but it's good money,

[08:37] right? Like it's good money. It's hard

[08:40] not to choose real estate as your

[08:42] full-time income path when I'd have to

[08:46] trade 40 hours a week for 12 months to

[08:50] make $110,000. If you count my bonus, I

[08:53] was probably making closer to $140,000

[08:56] when I could flip two houses and make

[08:58] that. And I could flip two houses in the

[09:01] same month.

[09:01] >> Yeah, when you put it that way.

[09:03] >> Right. Right. We just sold a deal and

[09:05] made 70k like last week. So like and

[09:09] yeah, it took us 5 months to make 70k,

[09:11] but that wasn't the only house I was

[09:13] flipping. Like I had to choose the real

[09:15] estate. It made more financial sense.

[09:17] And also I love it so much more than I

[09:20] loved my day job. I just en I liked my

[09:22] day job. I love doing this.

[09:24] >> So that was me and Henry on episode

[09:27] number 1069 from January. Our next

[09:30] episode today was our most popular show

[09:32] of the year on YouTube. It's an investor

[09:35] story with DeAndre McDonald. This

[09:37] episode really struck a chord with many

[09:39] of you because it proves you can start

[09:41] investing in real estate and change your

[09:43] financial trajectory from almost any

[09:45] starting point. Deandra had $35,000 in

[09:49] debt and got rejected by a lender the

[09:51] first time she tried to buy a property.

[09:53] She eventually got her first deal though

[09:55] with a down payment of less than $4,000.

[09:58] 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

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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