Could building houses make you more money than buying existing ones? When should someone use the 1% rule in real estate, and when does this metric point to a cash flow disaster? What’s the best way to get more capital or funding for future real estate deals: get a HELOC on your primary residence or look for investor-only DSCR loans? We’re pulling some of the top questions from the BiggerPockets Forums and giving our answers on today’s show!

Expert investors Dave Meyer, James Dainard, and Kathy Fettke from the BiggerPockets On the Market podcast are on today to answer YOUR real estate investing questions. First, we return to the age-old debate, “Does the 1% rule exist anymore?” With high home prices and lagging rent growth, this once foolproof metric could be an outdated calculation inexperienced real estate investors should avoid. Next, can you make more money building houses than flipping houses? 

Are turnkey rentals the best “low headache” real estate investment? We’ll answer that and give our thoughts on when to use a HELOC (home equity line of credit) vs. a DSCR loan (debt service coverage ratio). Finally, for our out-of-state investors, we share the top metrics to look at BEFORE you invest in a new market. 

Want to ask a real estate investing question? Post yours in the BiggerPockets Forums, and we might select it for our next show!

In This Episode We Cover
The 1% rule explained and when you should (and definitely shouldn’t) use it to decide on deals
Building new construction vs. flipping houses, plus which could make you more in 2024
Turnkey real estate investing and whether the lost value-add potential is worth the passive income
HELOCs (home equity lines of credit) vs. DSCR (debt service coverage ratio) loans
Best tools to use and metrics to track when looking into out-of-state investing markets 
And So Much More!

(00:00) Intro
(00:46) Is the 1% Rule Dead?
(08:24) Building vs. Flipping Houses
(14:30) Are Turnkey Rentals Worth It?
(20:56) HELOCs vs. DSCR Loans
(25:07) Local Market Metrics to Track
(30:46) Ask Us Your Question!

Check out more resources from this show on BiggerPockets.com and  https://www.biggerpockets.com/blog/real-estate-953
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953: Is the 1% Rule Dead? + Why Building (NOT Buying) Could Make You More

On the BiggerPockets Real Estate Podcast, co-hosts David Greene and Rob Abasolo interview real estate investors and entrepreneurs about successes, failures, and hard-earned lessons. Through in-depth conversations, 1-on-1 listener coaching calls, and news analysis, you’ll get a breakdown of real strategies that work for different niches and experience levels. Tune into the #1 real estate investing podcast every Monday, Wednesday, and Friday.

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Real estate investing in 2024 isn’t as easy as a few years ago. When interest rates are low, housing inventory is high, the economy is booming, and everyone’s happy, real estate investors can take considerably more risks with bigger payoffs. But now, only the most savvy investors are finding cash flow, appreciation potential, and wealth-building properties. So, with little hope in sight for lower rates or home prices, how do you ensure you’re building wealth, not getting burnt, in the challenging 2024 housing market?

If there’s one person who knows how to invest during tough times, it’s J Scott. He literally wrote the book on recession-proof real estate investing and has flipped, landlorded, and syndicated through booms, busts, and the in-between periods. Today, J is laying down his six rules for real estate investing in 2024, which he’s following himself to ensure his portfolio doesn’t just survive but thrive, no matter what the housing market throws his way.

First, we dive into the factors causing such a harsh housing market and whether J thinks home prices will rise, flatten, or crash. Next, J walks through the six rules for real estate investing in 2024. We’ll talk about appreciation potential, rising expenses like insurance and property taxes, the riskiest investing strategies of today, loans that’ll put your real estate deals at risk, and why you MUST start paying attention to your local housing laws. 

Support today’s show sponsor, Rent App: the free and easy way to collect rent!

In This Episode We Cover
The six rules for successful real estate investing in 2024 from a time-tested expert
Inflation, interest rates, home values, and why the housing market has significantly slowed down
What rising expenses like insurance premiums, property taxes, and labor will do to your rentals
The one thing you CAN NOT assume when analyzing real estate deals (big potential mistake)
Adjustable-rate mortgages (ARMs) and why J is avoiding these at all costs 
Rent control, short-term rental regulations, and housing laws that could put your rentals at risk
And So Much More!

(00:00) Intro
(01:30) What Affects the Housing Market?
(11:20) 1. Don’t Bet on Appreciation 
(15:46) 2. Expect Higher Expenses, Lower Rent
(20:37) 3. Know the Risks of Flips 
(26:46) 4. Avoid Adjustable-Rate Loans
(28:48) 5. Buy What You Can Hold 
(33:15) 6. Pay Attention to Local Laws 

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-963
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963: BiggerNews: 6 Rules for Real Estate Investing in 2024 w/J Scott

Want to reach financial freedom faster? The BRRRR method is how you do it. Seriously—the BRRRR strategy is almost too good to be true, which is why so many real estate investors use it as the stepping stone to start building wealth. In short, the BRRRR (buy, rehab, rent, refinance, repeat) method allows you to reuse and recycle your money repeatedly, turning one sum of cash into multiple investment properties or an entire portfolio! This allows you to build your real estate portfolio faster WITHOUT having to wait around to save up tons of capital to invest.

But how do you use the BRRRR method to build wealth, passive income, and financial freedom? We’ve got a financially free investor, Dave Meyer, on the show to walk through the three steps of completing a BRRRR real estate deal. From finding the properties to analyzing them for maximum profit potential and refinancing to get your money back out, these are the steps a beginner needs to take to do their first BRRRR deal. Plus, we’ll even show you a tool that runs the numbers for you in just minutes so you can get your first or next investment property even faster!

Want to do BRRRR deals like the pros? Sign up for BiggerPockets Pro to unlock unlimited BRRRR calculator usage and access all the elite investor tools by using code “BUYPOD24” at checkout. Plus, you’ll score a sweet discount and over a thousand dollars in bonuses! 

In This Episode We Cover
The BRRRR method explained and how to use it to “invest on repeat” 
Why BRRRR may be one of the best ways to reach financial freedom FAST
The risks of the BRRRR method (and easy ways to get around them)
How to find perfect properties for the BRRRR method (and Dave’s favorite way to find deals)
Analyzing a BRRRR deal from start to finish (in just minutes!) with the BRRRR calculator 
How to get funding for your first or next BRRRR deal with these investor-friendly lenders 
And So Much More!

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-no-number
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How to Use the BRRRR Method to “Invest on Repeat”

Imagine living in a home where your next-door neighbors are your best friends or family members. We know you’ve thought about it before—starting a compound with all the people you love, everyone helps each other, watches each other’s kids, the community stays safe, and you barely have to drive! This is exactly what co-ownership homes, co-buying, and co-living can do for you! But getting a dozen or so people together to do a real estate deal can be a little tricky; that’s why we have Phil Levin, founder of Live Near Friends, on the show to help.

Phil lives in his own housing “cluster” with nineteen (yes, nineteen) of his closest friends. He believes that being near your loved ones helps you live a happier, safer, and more contented lifestyle—and we agree! There are massive positives to living in a neighborhood with your friends. We’re talking free babysitters, consistent helping hands, less driving and more walking, and, of course, being able to see your best friends almost every day of the week. But practically, how does one start building a community like this?

Phil walks through the different setups anyone can try to begin living with and around their friends and family, from co-buying with one or multiple others to starting a “minihood” and making your own part of the block, or building an ADU (accessory dwelling unit) for a close friend or two to live in. He even talks about the rising demand for this type of co-living and what developers and real estate agents can do to make serious profits from this growing trend. 

In This Episode We Cover
Co-ownership, co-living, and co-buying explained and how to live with your best friends 
The massive benefits of living near family and friends (especially if you have kids!)
The “law of proximity” and boosting your lifestyle by co-living with more happiness and less stress 
Creating a “minihood” where you and your friends all live within walking distance
How real estate developers can get a jump on this fast-growing co-ownership trend 
And So Much More!

(00:00) Intro
(01:24) Compound Living 
(04:00) How to Start Coliving 
(07:15) Benefits to Living with Friends 
(10:51) “Cobuying” with Friends/Family
(16:39) Huge Demand for This Housing 

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-962
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962: How to Buy a Home (or Entire Neighborhood) With Your Friends and Family w/Phil Levin

One of the biggest hurdles to rental property investing? High down payments. Most lenders want you to come to the table with twenty to thirty percent down, but with home prices averaging around $400,000, it might not be easy to come up with $80,000 to $120,000 on your next deal, especially with today’s high cost of living. So, how do you skirt the high down payment requirements while still locking up solid real estate deals? We’re showing you how in today’s Seeing Greene!

First, a Hawaii investor struggles to scale his real estate portfolio with the state’s significant down payment requirements. David and Rob give him some creative ways to still get deals done. A median-income-earning new investor wants to know whether to buy a new construction home or BRRRR his way to wealth. Then, we debate whether a high down payment with cash flow beats a low down payment with negative cash flow. Looking for a better interest rate on your next deal? We’ll share the seller finance strategies you can use to buy off-market properties, plus whether or not you can buy two houses at once with the same preapproval. 

Want to ask David a question? If so, submit your question here so David can answer it on the next episode of Seeing Greene. Hop on the BiggerPockets forums and ask other investors their take, or follow David on Instagram to see when he’s going live so you can jump on a live Q&A and get your question answered on the spot! 

Support today's show sponsor, Rent to Retirement, by checking out their turnkey rental properties for sale! 

In This Episode We Cover
How to get around high down payment requirements on your next deal
BRRRRing (buy, rehab, rent, refinance, repeat) vs. buying new build homes 
Weighing the pros and cons of a high down payment with higher cash flow 
The ONLY type of investor who should purchase negative cash flow properties
Seller financing 101 and how to find these hidden deals with rock-bottom rates
Buying two houses with the same preapproval and whether it’s even possible 
And So Much More!

(00:00) Intro
(01:07) How to Avoid High Down Payments
(11:36) BRRRR or Buy a New Build?
(20:35) Take Negative Cash Flow? 
(24:50) Comment Section Callout 
(27:36) Getting Seller Finance Deals  
(34:24) Buying Two Houses at Once?
(36:53) Ask Us Your Question! 

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-961
Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com.
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961: Seeing Greene: How to Avoid High Down Payments and When to BRRRR vs. Buy New

Looking for monthly cash flow but live in an expensive real estate market? It sounds like you need to start buying rental property OUT of state. After realizing that real estate investing could be the wealth-builder they needed, Jessica and Shyd Coloma wanted to get in the game. But in pricey Southern California, finding passive-income generating rental properties was next to impossible. So, they began looking out of state. Thanks to BiggerPockets Agent Finder, they met Ohio-based agent Michael Gallagher, and now, just a couple of years later, they have a cash-flowing rental property portfolio!

Michael was able to quickly show the couple which cities offered cash flow, appreciation, and a bit of both, as well as the parts of town that were seeing the most growth. They ended up buying a duplex for under $100,000, saw instant cash flow, and decided they needed more! In today’s show, they’ll walk through all the numbers of their first and second deals, how their rock star agent saved the day multiple times, and what you MUST look for in an out-of-state investing market.

Need an investor-friendly agent? Use BiggerPockets Agent Finder to connect with local agents in your investing area for free! 

In This Episode We Cover
Long-distance real estate investing and how to buy rentals from 2,000+ miles away 
Building your "buy box" so you know exactly what you want in an out-of-state market
Cash flow vs. appreciation and which cities in Ohio offer which benefits 
Finding a property manager remotely and whether local managers beat national ones 
Short-term rentals, medium-term rentals, and the strategies to get even more cash flow out of your rental
One huge closing hiccup Jessica and Shyd ran into that you should be on the lookout for
And So Much More!

(00:00) Intro
(01:22) Investing Out of State  
(08:24) $87K First Rental Property! 
(13:07) Finding a Property Manager 
(15:06) 2nd Deal in Columbus 
(23:34) Closing Hiccups and Final Numbers
(29:09) Keep Investing in Ohio?
(31:29) Ready to Invest Out of State? 

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-960
Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com.
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953: Is the 1% Rule Dead? + Why Building (NOT Buying) Could Make You More

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