The Professionalist Real Estate Investing Podcast

Beyond the Wait: Creating Cash Flow When Others Freeze

• The Professionalist Real Estate Investing Podcast

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Tony and Marcus Harvey discuss what's really happening in the 2025 real estate market and how professional investors are adapting to higher interest rates and changing conditions. They share practical strategies for navigating today's market realities rather than waiting for conditions to return to COVID-era norms.

• Avoiding common mistakes like focusing solely on appreciation, waiting indefinitely for lower rates, or buying deals that only make sense at lower interest rates
• Why creative financing strategies (subject-to, seller financing, lease options) have moved from niche to mainstream in 2025
• Exploring emerging cash flow markets in the Midwest and South that offer better returns than coastal regions
• The continued value of house hacking and co-living models as entry points for new investors
• Why treating real estate investing as a professional business with systems and partners is critical for success
• The importance of mindset in separating investors who freeze from those who evolve and thrive
• How ADUs and companies like Boxable are creating new opportunities in markets with housing shortages

Visit professionalistrealestateinvesting.com to submit your information if you'd like to connect with Tony and his team.


Podcast Intro 

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Speaker 1:

Welcome to the Professionals Real Estate Investing Podcast. I'm with my guy, mr Marcus Harvey from Property Relief LLC. How are you doing?

Speaker 2:

today, marcus, I'm doing fantastic, fantastic. How are you doing today?

Speaker 1:

Oh, I'm doing great, doing great. We have another episode right here. It basically I got the title as what's really going on in 2025 with the real estate market industry. Yep, as what's really going on in 2025 with the real estate market industry. We're halfway through this year already and it looks like especially with the interest rate not much activity. I tell people that it's not going to be like it was when the COVID era was, when people were getting that 2% interest rate.

Speaker 2:

Yeah, that's not going to be around anytime soon.

Speaker 1:

That was a chance of a lifetime.

Speaker 2:

That don't happen too.

Speaker 1:

So, um, let's get started. So what does this mean for investors? It means your debt service is higher, cashflow margins are thinner and competition has shifted. It's definitely shifted in a lot of ways and directions. How do you feel about that part right there? Because me and you've been talking a lot about especially the economy, especially nowadays, especially with investors.

Speaker 2:

Yeah, yeah, with the interest rate where it is right now, I just think that the way the market is, the way it's been shifting just over the last two years, and this new administration, I'm hoping that it gets better. I'm hoping the rates get better. I'm hoping Trump turns some stuff around in real estate to where it makes it more beneficial for buyers on the retail side and on the investing side.

Speaker 1:

Yes, me too, because right now it's's like the things that are like a standstill. Right now, these are the things not to do in this market, and this first one, focusing on appreciation instead of cash flow. It's like this is not the time to gamble on the market growth, but for income. If it appreciates, great, but don't bank on it.

Speaker 2:

Right right, don't bank on it. Don't get your hopes up. You know you have to be able to come up with different strategies and different just options right now. You have to be kind of versatile right now.

Speaker 1:

And the second one waiting on the sidelines indefinitely. That's a lot of people just waiting on the sidelines. Why? Because they want that interest rate like it was about five years ago.

Speaker 2:

Yeah, yeah. I don't think you should wait, because interest rates are going to be what it is, so you got to just make sure your numbers are right and you've got to use the right strategy.

Speaker 1:

Yeah, like you said, smart investors move now with the right structure. Once you've got the structure, you've got that structure right. I mean you were talking about earlier. Yeah, make sure the numbers are right because everybody's numbers are different.

Speaker 2:

Yeah, you know there's different areas, different price points and stuff, so you have to adjust accordingly. You have to be able to just make sure when you're trying to buy something, using the right strategy, making sure you qualify and are in the right price point and know what you're doing. Just really know what you're doing. The economy is shaky right now.

Speaker 1:

Yes, it is. Number three says buying deals that only make sense at lower rates. Man, this is a good one too. It says I said well, if the price rates drop, this will cash flow. No, make it work at today's rates. Yeah, pass right. Yeah, because if you don't like. The number two said you're going to be waiting on the sidelines. Then for the right time, then Right, right.

Speaker 2:

Yeah, you have to buy, right, they call it. You make your money on the buy. So if you're investing and you're trying to buy deals, make it make sense, buy deals, make it make sense. It's just with real estate. It's so up and down, the market changes. The interest rate's been changing throughout the years, not this year. Unfortunately, we've had what one. Unfortunately, we've only had what one cut.

Speaker 1:

Yeah, just one cut, just one, yeah, and they already predicted that we wasn't going to have much cuts. Anyway's why I told you. People come to me ask like what's the interest rate going to be?

Speaker 2:

I'm like it's not going to be much movement no, no, they're, they're messing around and they're trying to figure out like what this, what these wars and stuff? It all comes together. Yes, it all comes together. So, yeah, buying deals, that only makes sense at lower rates. Um, you have yes all day, so the numbers got to be right.

Speaker 1:

Yes, the next one over-leveraging. It says adjustable rate loans interest only balloons and high-risk leverage will burn you if things shift again. Stay lean, stay liquid. Yes, indeed, that's what you definitely want right there, don't?

Speaker 2:

over-leverage? No, indeed, that's what you definitely want right cash on hand so you can buy deals and, if not know someone that does, and partner up with them and just stay lean with it. Cut off any unnecessary fat. That's not necessary. Keep the projects nice and clean, whatever it is you're investing in.

Speaker 1:

That's pretty good. The next one number five blowing solo. It's like this market the worst partnerships, creative deal-making and share the risk. Don't try to do everything to sell. That's so true because there's a lot of people who get in this and they don't know what to do. They don't know what direction to go to ask them to any type of of the overall real estate investing. So it's good, it's good to ask questions, it's good to talk to people you know, mingle with people that who are dealt with real estate investing.

Speaker 2:

Yeah, birds of a feather, you know just talk who are dealt with at USAID Invest, yeah, birds of a feather. Just talk to those folks, get to know them, get to know what they do and what they can offer them, what you can offer them and what they can possibly offer you.

Speaker 1:

Yes indeed. Then let's just switch it over Five key strategies to winning in 2025. The number one thing is and I would think I just think of pace the creative finance.

Speaker 2:

Yeah, shout out to pace More, be one time all day, all the time.

Speaker 1:

And the thing about pace is he he breaks it down for you how to do creative financing, and creative financing it's nothing new, it's just a strategy that has never been used upon a lot Right, right, right.

Speaker 2:

It hasn't been one of those things where people put it out there in the forefront of hey, try these different, creative financing strategies to help you invest better. But I've heard about them for years, not just from Pace but from other real estate mentors and other folks that are involved in real estate.

Speaker 1:

So what gets me too, is like with the creative financing, is a lot of real estate agents don't even know about creative financing.

Speaker 2:

No, no, and it's so crazy how, like, you can become a real estate broker or agent, get your license and then not educate yourself on the investing side.

Speaker 1:

That's just weird to me it's crazy. You've heard of subject to seller financing lease options, but in 2025, this is going to mainstream, which it has. A lot of people are on board about the creative financing.

Speaker 2:

Yes, yes, with seller financing subject to these options, everything, all the other creative financing strategies you can think of.

Speaker 1:

Yeah, it's to learn how to acquire properties by retaking over existing financing, offering seller carrybacks or negotiation creative terms, right. And the thing about creative financing a lot of people don't know is it's not dealt with. It's not dealt with. All the banks, all the banks and the loans. All they want is their money. But if somebody that's what helps out with like I mean, you're talking about foreclosures, free foreclosures, foreclosures Creative financing is at its best when it comes to those situations with them.

Speaker 2:

Yeah, yeah, I agree totally because, with creative financing, not having to deal with the banks and not have to go to the banks to get qualified, and all that just makes the process so much easier when you're dealing with sellers and buyers and trying to get a deal accomplished and get closed.

Speaker 1:

Yes, that's strategy number one. Create a financing. Number Two invest in emerging cash flow markets. Yep, so I haven't been there, but I would love to go to San Diego, but that's not a market that is not going to prosper like you would like. The Midwest, this is Birmingham, Alabama, Columbus, Ohio, Oklahoma, Augusta, Georgia, those areas, especially like the Midwest and the South. That's where the markets where you're going to do better cash flow in those markets, yeah, that southeast region and yeah that southern states and stuff.

Speaker 2:

Yes, definitely be able to cash flow good right now.

Speaker 1:

Way better than a lot of markets here in California. Oh yeah, right here I tell people who live here in California if you invest, make sure those numbers are right. But if you want to invest and you want to partner with somebody, partner with somebody in the Midwest or the South Right, yeah, partner up with them and make it beneficial for yourself.

Speaker 2:

Make it worth it.

Speaker 1:

Yes, you know, like I said, you look at the population growth, you look at the landlord friendly laws, because those ones right there, that's the ones you want, right there, that's where you're going to get the money that you put in. Yeah, that's what you're going to receive. Come back even more Exactly, exactly. And then number three strategy home hack or co-living models, it says for new investors, this is still the best way to get in Live in one unit, rent the rest or turn your home into income with furnished or co-living setups. The bonus part of it you can use owner-occupant financing for lower down payments.

Speaker 2:

Right, that's a great strategy right there. Yeah, that is a perfect beginning strategy when you get into real estate house hacking along with wholesaling. You know, house hacking slash co -living yeah, that's just one of the entry ways, along with wholesaling and a little bit of creative finance, that you could get into real estate. It's a good strategy. I definitely will recommend it because it's just a low barrier entry to get in.

Speaker 1:

Yeah, and I know like the live-in one unit. A lot of people use that when it comes to the plexus, the triplex or the fourplex.

Speaker 2:

Yeah, the twos, threes and fours.

Speaker 1:

Yeah, they use that when it comes to that because that's so beneficial. Like you stay in your quiet. Is that with the FHA?

Speaker 2:

Yeah, I believe the two to four you can get the FHA loan and still do the house hacking. Well, I think, like with the two to four units, house hacking would be a lot better because you actually get your own unit. But when you just get a single family with that FHA, then it's pretty much like renting rooms out at that point. But with this new ADU law thing you can put ADUs now behind these single family homes. So that's another strategy you can use as far as house hacking.

Speaker 1:

I wasn't thinking about that. Me and Rock, we did an episode about the ADU. I saw that yeah. It's prospering like crazy.

Speaker 2:

Oh yeah, there's, I think, specific laws for California than other states to put up these ADUs in the back of these backyards and on these properties, these single family properties.

Speaker 1:

Yeah, and then I read about it about. I was listening. Actually, I was listening to a gentleman about it and he was in Seattle, he was talking about it and then he was bringing the information that he had here in California and the ADU, like I know, a lot of people are doing the best they can with the shortage of homes. Yeah, this helps out a whole lot, but we still need a whole lot of help. At least it's something, yeah, at least it's something.

Speaker 2:

Yeah, it's just the start of the process. I was looking at something yesterday about those ADUs, some company called Boxable.

Speaker 1:

Yes, I've heard of them. Yes.

Speaker 2:

Boxable. They're like coming up and these box homes that people are getting to put in their backyards or put on their properties just in general, and they're just cheap and efficient and just oh nice. Yeah. Yeah, I was just looking at a video the other day. On it there's other companies too that do the same, but I don't know if they do what Boxable does. Shout out to Boxable Sponsor no.

Speaker 1:

Number four strategy partnering up for bigger deals. I think I can honestly say, with real estate this part, right here is my thing the multi-family you've always talked about that. Oh yeah, higher interest doesn't hurt as bad when you have equity partners, private lenders, syndication strength absolutely you gotta when you'll have a great team when it comes to ss. Real estate is a team sport. Yeah, now more than ever, if you find the deal, someone else will find it, we'll find it we'll fund it, excuse me, it's all good.

Speaker 1:

But if you have to know how to present it and protect it on both sides it's like basically a family Everyone comes together. You will be up to date on everything that's going on. Why? Because you're a partner Communication Most indeed. Yes, you need to operate it like it's a business. That's the main thing.

Speaker 2:

Like, if you want to succeed in real estate investing, you need to operate your life like it's a business on podcasts and stuff like tracking kpis, making sure, like you just said, running it like an actual business, making sure you you're taking notes and keeping track of, uh, of everything that comes in from marketing and responses from marketing and, um, just everything you want to, like you know, keep good notes and good track. Tracking of everything, yes, everything.

Speaker 1:

That's the way to go about it. It says make sure you have systems. Stessa is actually a good system to help you with everything that's going on. It's a great tool for investing. I have checked that out. And RentReady also. I've heard of RentReady, I've heard of that. And then and a lot of people use the Google sheets with live passwords but you got to treat it like it's a million dollar business because that's what it will, that's what it can become.

Speaker 2:

Sky's the limit, especially in real estate. Yeah, Just right from the house to right from a home office, it's possible. You can really grow this thing and scale it to a multimillion dollar business. You put the right systems in place, connect with the right people, the right network of people, the right partners. And, yeah, you can really just do this from home laptop phone.

Speaker 1:

That's it. Yeah, I tell people like, as long as you, as long as you speak it into existence, you need to speak into this exactly what you want. Yeah, there's going to be everything I mean talk about, like, even with this podcast, trial, trial and error, like I've learned so much and I'm still learning, like if I had every day to help me. Oh Lord, yeah, sky, sky's the limit, right there.

Speaker 2:

Oh it's, it'll get to the. It'll get to the point where you'll have to have the budget to be able to hire, hire a mentor to get you through this, this podcast world, you know.

Speaker 1:

Yeah, but I you gotta. You have to run it like a business and I tell people you have to love it also.

Speaker 1:

Yeah, you have to have a love for it and be able to get up every day to enjoy it yes, even though you run it run like such as a business, but you still have to have that love like, yeah, sometimes you might need to sit back and just have a reality check with the, or I call it a moment of truth, be like, hey, look where I came from and where I started, where I started at right now, where I've come from, like right, that speaks volumes by itself. Oh, yeah, right, exactly, exactly. And then the main key to me I know definitely the top five, definitely with you on this one is you got to have the mindset. Yes, you got to have the mindset. It's a professional mindset shift. You have to have that. If you don't have it, you're not going to make it.

Speaker 2:

Yeah, you have to, like I'd say you have to get out of like the works eventually, like real business world works, accounting, um, uh, receivable, receivables, payables, all that. Just you have to uh know a little something about it. You don't have to be the super expert you know you can hire, but you have to like know something and be professional when you're in business as much as excuse me, as much as possible and get out of kind of like the hustle mentality, mentality of just quick, quick, quick, there's got to be processes set up and you have to treat it like you just said, just like a business.

Speaker 1:

Yes, I said, this market has created two types of investors those who froze because it's harder than before. Those who evolved because they realized harder doesn't mean impossible, right? I also say, when it comes to the mind shift also it's actually another way of putting it is it's who you're around. The Bible proverb says bad association spoils useful habits. So if you have useful habits and you're around people, bad association spoils useful habits. So if you have useful habits and you're around people who don't have useful habits, you're going to become a part of them, right? You need to be surrounded by people who have the same, you want that same mindset skill that they have, yep, that they're treating their business such as, just like a business, right, and that they love exactly what they're doing. It's not a nine-to-five job like you.

Speaker 2:

All right, I'm clocked in all right, I'm clocked, yes, not like you're sitting there dreading the whole time oh, when is this going to be over? Like you're when you wake up excited to do it, yeah, wake up, excited to know, okay, something different is going to happen today. So what's that going to be? You know what I mean, and it's not the just mundane like you just said. Nine to five, let me go to my cubicle, let me go to my computer, do my normal work and hopefully just time flies by fast. You have to be able to enjoy the day you do you do?

Speaker 1:

And I'd say it's the love. And also, too I'll put another thing on that too it's like and you're helping people, you're helping people live in a place that is going to be suitable for them in their family, yeah, solving their problems, helping solve problems.

Speaker 1:

The more you got to think it breaks down to. If it's I mean you were talking about remodeling homes and stuff People want to be in a nice place, they want to be surrounded in a nice location, absolutely Like and and if you're a good person, who's an investor, say like you're a landlord and you treat your tenants well they're not moving? No, no, they're not moving. They know like I'm taken care of, I don't have to worry about anything.

Speaker 1:

Right Like if something breaks down, I can get it done the next day, if not the next day, asap right as soon as possible.

Speaker 2:

Yep, just make sure you take care of your attendance as as good as you want um to be taken care of if you were a tenant you know yes yes, so you have to think about those things.

Speaker 1:

And I, I got another, I have another. I've just been in the Bible mode lately, but another proverb is that you know, there's more happiness in giving than there is in receiving. Yes, yeah. So like the joy of you helping someone, that's priceless, yeah.

Speaker 2:

Yeah, it is really priceless to just be able to serve, serve people in that kind of way and then it's showing God or you know, whoever you believe in, is showing the man of above that that you're being of service, you know you're doing his work to, you know helping people and it's just a good feeling.

Speaker 1:

Yeah, it's just a good feeling?

Speaker 2:

Yes, it is, and this's just a good feeling.

Speaker 1:

Yeah, it is. It's just a good feeling, yes, it is, and it says a professional, a professional investor, doesn't wait for the news to give permission. Learns how to create deals, not chase them. That's multiple exit strategies, yes. Knows that in real estate, your skills are more important than your timing.

Speaker 2:

Absolutely, I believe that yeah.

Speaker 1:

This mindset, this is how you create long-term wealth period. Mm-hmm, which is the truth, yeah, yeah, because that mindset will just. It's the foundation of everything.

Speaker 2:

Yeah, it is. It starts in your mind and you have to write down your goals to make sure you stay on track. And you have to be chipping your goals to make sure you stay on track and you have to like be chipping away and making progress at those goals, whether it's real estate, just normal regular business, whatever you're doing, if you're into sports, just got to have that, that mindset. To that You're going to stay focused and you're going to get what you want to get accomplished. You're going to stay focused and you're going to get what you want to get accomplished.

Speaker 1:

Yes, well, like and I'll have to end off with this last sentence, which is very good, I had to put this out it's the professionalist path. It's about using strategy, knowledge and alignment to build real estate. Well, any market, yeah. And I someone, people, people, come to me ask me Tony, is this the right time to buy real estate? I said there's never a wrong time. Yeah, as long as the numbers are right. That's what it comes down to, right? Right, it comes down to your situation as to what you want to do. What, what, how many doors do you want? Right? What do you want to do? Do you, it's like, do you want to turn? It's just so many different options that you have estate, whatever financing that you want to set up that's got to just be all lined up and squared away.

Speaker 2:

You got to have everything in its proper place to be able to do this business. But it starts with your mindset. You got to figure out what you want to do and then just go from there and just write down your goals and what you want to accomplish.

Speaker 1:

Yes, Now, that's the end of this episode right here. But I want to you know, give, you know, give some shout outs real quick. I got it and I showed you, I showed you. It's like a, an email and out of uh, it was out of our neighboring country, canada. That's just investing podcast, that's right. Well, in Canada, yeah, I want to salute everybody in Canada. Oh, yeah, a couple of people in Canada I heard. It's a beautiful, beautiful country to be in. Another thing got some great reviews from an Apple podcast. Right, it's come a long ways, just like with real estate. Like, yeah, start somewhere. Yeah, I started this, I started this and this is not about me. It's about the information I bring about and people who I talk to. Yeah, because there's so many different platforms, but you chose to listen to me and I very much appreciate it. I'm a long ways, yeah.

Speaker 2:

Yes, it has grown organically from from from the start, and we just are going to keep on bringing information to you guys. Real estate is what we really mostly talk about on the show, but let us know too if there's a little bit of finance or maybe business you want to talk touch on as well. Um, and, like you said before on other podcasts, this is about the professional list and being a professional in whatever industry you do.

Speaker 1:

So even in life even in life.

Speaker 2:

You know this just happens to be the professionalist real estate podcast, cause you know we're both interested in real estate, we talk about it. You know this just happens to be the Professionalist Real Estate Podcast because you know we're both interested in real estate, we talk about it. You know we always discuss it.

Speaker 1:

Yes.

Speaker 2:

And that's just what it is right now.

Speaker 1:

So, with that being said, yeah, I know some people are asking why is it called a professionalist? Well, I wanted a different title that can adapt to anyone, yes, yes, and so I'm like this is not about me, it's about who know, who can get the information, who can get the information and who can be on this to give them more information, exactly Because information is power. Information is power, yeah, and like and do it all different facets. So I know I got a couple of podcasts of people coming out that I'm working on right now to put out, and I want to salute everybody who has watched me on the Apple, who watched me on YouTube, apple, spotify. This week, right here alone, I got over 4,000 subscribers. That is awesome. Do not take that lightly. I'm going to keep on going and striving, hopefully get some heavy hitters coming on. Yeah, just talking about.

Speaker 2:

Yeah, earlier, we just need a couple of heavy hitters. Heavy hitters, I mean, I know this is kind of like a beginning kind of podcast on real estate and we're gathering information and learning as we go as well as what we already know. But if we can get a heavy hitter that's interested in real estate, that's in the real estate podcast world, that'll be awesome. That would be great to be able to get some knowledge from someone.

Speaker 1:

Yeah, and if you want to go to professionalistrealestateinvestingcom and just submit your form, that's the website. Just go in there and submit the information and team, aka me and whoever it's dealt with we'll get back in touch with you ASAP and we'll go from there.

Speaker 1:

Sounds good, Sounds good. So, yes, please like subscribe. Yes, Anything that you would love to be on the podcast, let us know and then we'll. We'll keep on going further. But yeah, I got a, I got a few more coming out, Um, with some uh investors who are deep in the industry of real estate investing Nice.

Speaker 2:

Nice, sounds good, sounds good. And, on that note, everybody, have a blessed day. Yes, absolutely Peace and hair grease.