Tailwind Talks
Tailwind Talks is a podcast for high-performing professionals who want to build serious real estate portfolios without leaving their careers. Hosted by an airline and military pilot turned investor, it dives into actionable strategies for scaling your real estate portfolio while balancing the demands of a full-time job.
Tailwind Talks
Start Real Estate in 2025 with Just $5K (and what I wish I would have done) Tailwind Talks 002
Breaking into real estate investing can feel impossible when you're starting with minimal capital. The barrier to entry seems insurmountable with rising property values, high interest rates, and fierce competition. But what if you could launch your real estate journey with just $5,000?
This raw, practical guide cuts through the noise and delivers actionable strategies for getting started in today's challenging market. We explore the house hacking approach—purchasing a small multi-family property where you can live in one unit while renting the others—potentially living for free or even generating positive cash flow while building equity. With FHA loans requiring just 3% down for first-time buyers, this path remains accessible even with limited funds.
Beyond just buying property, we dive into the overlooked power of relationships in real estate. Finding the right broker (preferably an investor themselves), connecting with property managers who understand local markets, and building rapport with community lenders creates an ecosystem of knowledge that prevents costly mistakes. The $1,500 investment in a real estate license could be your most profitable move, providing insider access while allowing you to earn commissions on your own purchases.
For those truly cash-strapped, strategic partnerships offer another avenue. By finding partners who complement your strengths—whether they bring capital, handyman skills, or management expertise—you can accelerate your progress while sharing both risk and reward. The key lies in clear communication and aligned expectations from day one.
The most successful investors understand that real estate wealth isn't built overnight but through compound growth over time. By focusing on properties that offer multiple benefits—reduced living expenses, equity building potential, and management experience—you create a solid foundation for expansion. And by living in properties for the required occupancy period (typically two years), you can sell without capital gains tax, further accelerating your wealth-building journey.
Ready to transform your financial future with real estate, even with minimal starting capital? The path forward isn't about having all the answers—it's about taking that crucial first step while remaining committed to learning and growth along the way.
What's up everybody, welcome back. If you're a returning viewer, I really appreciate the support. Anybody that's watching this really, in general, I really appreciate the support. Today's episode, I think, is gonna be pretty interesting. It's about what I would do if I had no properties.
Speaker 0:It's 2025 and I've got five grand and I wanna buy a property. What would I do? What would it look like? Is it even possible? I know there's a bunch of money and I think that there's still opportunity out there. I'm still buying deals and there's a lot of people bigger than me that are buying way more deals. So, like people are still finding opportunity in the market, and so I want to talk about if you're just starting out, how might you get your foot in the door? And so I think the first thing I would say is it's all about trying to make some money. However, you can, right, you've got the five grand set aside. That's awesome, but then I would say, okay, what else can we do to supplement that? Because five grand, honestly, is going to be tough. I'm from the Midwest, so Midwestern market's awesome for those kind of deals. I just looked at a deal the other day. I talked about it on this channel $74,000. And so that stuff still exists out here. But if you're in the coast and you're in some of the city areas, you're gonna have a really hard time finding anything that's even remotely close in price to what you could get with a $5,000 down payment, right. So I think, let's, I'm going to focus away from the down using that five grand as a down payment. I'm going to focus on what we can do and just keep that in reserve, and so the first thing I would do is what are you doing for work? Does that mean you're working part-time job, a full-time job?
Speaker 0:The way I worked this stuff starting out is I literally had two jobs and two almost full-time jobs. It felt like sometimes I was delivering mail. This is after flight school. I get back from flight school. I'm like man, I love this job. Now what do I do? I didn't have enough hours to get a flying job anywhere, so I was like I guess I'm going to go back to my job that I had before flight school, which was literally delivering mail for the post office, and so I was delivering mail for the post office and flying at night whenever I could basically weekends for drill and stuff like that. So I was doing what I could to supplement my income with those two jobs. I didn't really have a lot of bandwidth for another one because I had that first flip house. But that's what I would focus on is okay.
Speaker 0:What can I do to trade my time for money right now, because that's what a job is effectively, and what can I do that's going to pay me the most for the hours worked, and that's obvious. That's nothing groundbreaking, but I think so many people think that they just need to go full-time into real estate. I'm going to quit my job, I'm going to go all in and I caution people on that. And, granted, there's people that have done that and have done really well and way better than me, but there's people that do that and then they realize, oh man, like I bit off more than I can chew, my bills are stacking up, I'm taking out credit cards to pay for normal debt and I'm hardly surviving Right. So I think I would recommend to keep the full time job. Don't go full time into real estate right away and maybe stack some money on the side.
Speaker 0:So the first note I have over here is talking about what are you doing for a full-time job and if you could find a job that is also in real estate. That would be key, because then you can leverage your work and also learning the business that you're trying to get into right. So I would recommend that. But, honestly, if you put that aside and you say you know what I'm just going to, I'm going to work as a bartender, let's say, and I'm going to do the real estate thing on the side, perfect, guess what? You got?
Speaker 0:Youtube. Obviously you know how to use YouTube because you're here right now. Youtube has so much valuable information from people that have done it way bigger than me, that are putting content out for free. That is really useful. Spend the time, invest the energy into learning as much as you can for free right off the bat, right? Simple things about how property management works or how to find the right deal, right. You can do all this stuff for free, so you can just binge YouTube, and then you don't have to feel bad about either. You can say you know what. I'm doing this for my own education, to help better myself, and so I'd recommend hey, like, some of the stuff I'm talking about is like talking about looking at actual deals in your market, right?
Speaker 0:So like going out and on Zillow or if you have access to the MLS, potentially looking at deals in your market and saying, okay, what is a good deal and what is a bad deal in my market? Where are the taxes lower? Where are the taxes higher? Are the rents the same across the entire city or is there an arbitrage somewhere where maybe the prices haven't quite caught up to what the rents are? I've saw the last couple of years south side of Milwaukee. I felt like, even though the buildings were older, the prices were well below what the rents were, and the quality of tenants and just the quality of everything besides the buildings themselves being really old early 1900s builds. Besides that, I felt like the area was really pretty solid for what they were getting for prices and so I felt there was an arbitrage there and since then that has closed up and the prices in the south side of Milwaukee have really exploded and we've been a benefactor of that because we've had a bunch of properties down that way and we actually just sold off a couple of them.
Speaker 0:But that's just some. That's a small example, but that applies to all markets. There's always some amount of arbitrage. It's just a matter of do you have the time and energy to invest in trying to find out what that is. I think that's the first place I would start is that education, especially about the specific market you're dealing with Zillow, craigslist, facebook marketplace these are all places that people sell stuff. But ideally one of the things I would say is maybe take some of the money with the 5,000 that you got, and I would take the 1,500 it takes, at least in Milwaukee. I know there's many people that say that's not accurate.
Speaker 0:In my market in Milwaukee you can get your real estate license for about $1,500. And I would recommend that, not because I'm going to try to make you Ryan Serhant and selling stuff across the city. I'm doing it so that way I can learn the business, I can learn the contracts, I can understand everything, and then I can take that license and I'm going to go to a local broker, a small brokerage. In my opinion, the big brokerages they're great and everything but and they offer a lot if you want to be a salesperson, but if your goal is to be a real estate investor and you want to buy rental properties and you want to grow, you want to get in with the investors and ideally you would find an investor that also operates a brokerage, and in my case, that's what I found, and I still think that's one of the best methods you could do, because now you have somebody that's investing in your market, that's selling in your market, that's buying in your market, that understands the business, and having somebody like that in your back pocket is so valuable because they're going to save you so many times from mistakes that other people are making, because they've lived it, they've done it, and if they've done it successfully, then they're a great person to have around.
Speaker 0:And you don't want to be a leech, you don't want to be takes. I'm going to be around, I'm going to try to learn. I think that's a great method and, like, I've tried to do that to some extent in my own life Granted, I've had these other careers to manage between the airline and the military flying but I've tried to do that as best as I could on the side between those two jobs. So I think that's a great opportunity there. I think it's something that's undervalued. The other angle on that, too, is you get your real estate license, you're working for a broker, you're learning the business and you're also benefiting.
Speaker 0:If you go and buy something, you can get paid a commission to buy your own property and or not pay a commission to sell your property, and I think that is a huge advantage by itself, especially as you slowly scale over time. You're learning the business. You're working, hopefully, for somebody at a small brokerage that understands the business and has been successful at it, that isn't a snake oil salesman, and you're also going to benefit from the actual financial side of it, which is what everybody here is watching for right. So I think that's a massive opportunity that gets overlooked and I'd love to see people lean in on that more. Not so much from the sales side, because I'm not a salesperson. I have no sale selling in my bones. I just it's just not a thing I love to do, but I do love learning the deals, understanding what the contracts are. When I saw how simple a lot of these real estate contracts are, I'm like I can do that. I can put some pictures up on MLS and sling it out there and I don't know. I think it's a great opportunity and something that gets overlooked.
Speaker 0:So if I was to take some of that money $1,500 off the top of that $5,000, I would go get a real estate license in your market and start to learn from somebody who's really done it in that specific market. That's the key part, because markets are so different. I might understand Milwaukee pretty decently, or know people that do, but I don't know how San Francisco works. I don't really know how New York works or Miami. Real estate is real estate at the end of the day, but markets are really cyclical and they're very different depending on where you're at. Learning from somebody that knows that specific market is massive and I'll get off my soapbox there. In addition to that, I would add property managers and lenders in your local market.
Speaker 0:Getting the broker and working for a broker is awesome. You're going to get a huge amount of valuable information from them. If they're an owner operator type deal or they're running a property management company, even better, because now they've got every angle of the business covered and you can learn from them. And if they're doing successfully and they're a straight up person and they're not screwing people over, you couldn't ask for anything better, right? That's everything that you need in one little package right there. So working for somebody, that would be massive.
Speaker 0:But if they don't do that, you can go find reputable property managers in the city and guess what. Maybe you can go look around at three, four, five different places and try to see what fits for you best. Like my style and the style of a lot of other people don't really mesh, probably. So I'm gonna find somebody that fits how I am, or maybe what I would like to be, what I would aspire to be, and go talk to them and just ask them hey, if you can give me 30 minutes, I just wanna pick your brain. I'm new and looking to get into the real estate market. I'd love to just get an opportunity to chat with you with you, and you'll be surprised by how many people will take you up on that if you really seem interested and you seem like you're self-motivated. I can't say enough about that opportunity and how valuable it might be. And simultaneously I would do the same thing with local lenders.
Speaker 0:I'm a credit union guy. I think most of my loans are with credit unions. A couple are with a bank, but the credit unions around here at least have been really helpful. If you build a good relationship with them, getting loans with them is very simple. They're not going to let you over-leverage or do anything crazy, but they're at least going to make it simple for you to get a new loan with them. They're not going to make you jump through as many hoops. They know you. You've been making your payments on time for years now. They know the properties that you want are solid, and so starting that relationship, even if you're not necessarily in the position to buy, is a really good idea, because if you plan to do this for the long haul, a lot of times those characters stay in those same positions or maybe move up the chain in that bank that you're working with or that credit union, and knowing them and having that leverage of that relationship is huge.
Speaker 0:This is a relationship business at the end of the day, and if you genuinely want to do this, then you're going to come across as a genuine person that they want to do business with and you're going to write your own ticket. So I would say that's another massive key. And this is all stuff that's free. That's the other thing. Maybe the $1,500 towards a real estate license we've taken off the top, but other than that, everything else is free. It's all marketing, it's all you. Basically, it comes down to you doing it and wanting to do it, and it's easy to see people that don't actually want to do it. I can see right through it. I think the only people that you're going to fool are fools, right? So if you're really serious about this business, it's going to get through to the people that it needs to, and you're going to get with the right crowds to try to get yourself to where you want to be.
Speaker 0:I started with a flip house. I started with a flip house and while it turned into hundreds of thousands of dollars in profit down the road between a couple of deals, I didn't know that was how it's going to work out. I didn't know that it was going to turn into an eight unit, which turned into a bunch of duplexes, which turned into this, and that I had no plans for any of that stuff. So I almost would recommend against what I did, because I spent a ton of money and I wasted like almost two years working on that house, and I think you could do better. And this is what I would consider is if you're paying rent to somebody, right, or you're paying a mortgage, consider the house hacking. I know it's been beaten to death across the internet and it may sound like it's not as good as people make it sound. But in this situation where you're tight on money and everything, you can double dip in a couple of ways. And the way I would look at it, it's okay. I'm working a job now, so I'm making money for my job.
Speaker 0:If I can get on the other side of the balance sheet and reduce expenses, I'm not a Dave Ramsey kind of guy, I'm not going to do the beans and rice thing. But guess what If I can house hack and I can buy a duplex and rent out one half and live in the other and live for maybe not free, but maybe for $500 a month instead of $1,500 a month or whatever the number may be just for housing, if you're in the grind, this might be a great opportunity for you to basically be able to reduce your expenses per month and therefore increase your free cashflow, which you can look at yourself almost like a rental property. I do that myself. It's like I'm bringing in this much money, I have this much expenses and this is the free cashflow that's left over for me to do whatever with. You can look at yourself the same way you look at a property you pay taxes, you have expenses, you have utilities, whatever you want to call it. So if you look through it, if you looked at it, if you look at it with that lens, it clears things up. You say, okay, yeah, like I can understand what's going on here, like I'm just basically another business. And if you look at yourself that way which is scary it might actually help you frame things correctly to make those changes.
Speaker 0:But I really think that the house hacking idea is decent because you can do it up to a four unit, right With an owner-occupied loan. You can go up to a four unit. But even with a duplex, you're going to be doing pretty good. And I've done it with the four family before with a VA loan and that was awesome. And if you're a veteran listening to this, I would highly recommend you just take a look at that. It's not brain surgery. I know a lot of people are selling courses and this and that you don't need a course. Man, you can just go to a bank and tell me you want a VA loan. If they offer that product, you're going to be okay.
Speaker 0:So anyways, house hacking idea I think that's probably the best bet at the beginning. Just, you can get a little bit of everything. Then you're learning how to property manage. You're learning what it takes to actually own a property. What are the expenses that you didn't think about, what are the expenses that aren't captured in a normal loan process that you might experience? And, for example, I've had basement problems, I've had roof problems, I've had people throwing bricks. I just had somebody a couple of days ago that literally threw bricks through the window a window of a property that I have. So you just don't know what's gonna happen.
Speaker 0:But getting yourself into a duplex, a three family, a four family, is a great way to start. In the case of a four family, you're probably living for free, if not making a little bit every month, which at the beginning is huge, and I didn't really appreciate that much. I wasted a lot of money on the flip house that I had. I could have easily shaved off 10, $10, $20,000 in the rehab costs. I just didn't know what I was doing and I was just shooting from the hip the whole time, which is a dangerous place.
Speaker 0:The next point I have is all about partners. There's a lot of people out here that I don't have any partners. I don't need any partners. I don't want any partners. But, man, when you're starting out, if you got five grand and you've got nothing else, or you've got no grand, maybe you got nothing and you need to get this thing going. A partner is one of the best ways you could possibly do it, especially if it's somebody responsible, somebody that you trust, somebody that you know. I wouldn't recommend mind doing it with somebody that you don't know to start off with, and some people would say don't do business with your family and friends. I've totally broken those rules and it's been totally fine, because if you're a straight up person, they're a straight up person. Everybody gets along. You're not trying to screw anybody over. You're not trying to steal any money.
Speaker 0:I think it's pretty straightforward and I've not had any problems with it so far. Knock on wood. But it's something I would consider, because now your money is going to stretch that much further. Granted, your equity is limited as well, but your money is going to stretch further. You're going to be able to grow faster, and this game is all about longevity, and it's all about it really is all about longevity, but it's also about compounding interest, and in this game, the way that things compound is in multiple fashions. You've got the debt pay down on one side. You've got the cashflow. On the other side, you've got equity appreciation on the far end. When you're looking at year to year, with inflation, you're paying back these loans with cheaper dollars. It all works in concert and if you have partners, you can do it faster.
Speaker 0:Now I would caution you. I'm not going to tell you you don't need to syndicate right now. You don't need to find 100 partners and you have 2% of the deal and you're trying to make money off the spread or whatever. You don't need that. What you need is maybe a 50% partner, a 60% partner, maybe a 30% partner whatever the case may be, to help get you your foot in the door. Maybe it's a silent partner, and that's how my partners have been for the most part. They definitely help me out when I need it and if they're watching this, they know they help me out. But something that I really enjoy is that they're hands off and they let me do my thing, and that allows me to make decisions that I think make the most sense.
Speaker 0:My next talking point would be about partners. If I was doing this and I was starting over again and I only had five grand or I had no money, I would find a partner If that's your friend, if that's your family. A lot of people say don't do business with friends and family. But guess what? I would prefer that than doing business with somebody I don't even know. So that's my personal preference.
Speaker 0:What works for you may not be that, but if you're straight up and they're straight up and you guys are all kind of worked towards the same goal, you're all growing in the same direction. I really don't see the problem with it. I've never had an issue with it because I'm not trying to screw people over, right? I'm trying to run a legitimate business and I have my own income and they have their own income. Everybody's got their own full time job, so no one's depending on this income. So a lot of that stress gets alleviated and that's something I'd recommend too.
Speaker 0:You find a partner, whether it's a friend or family or whoever. If they have their full time job, you have your full time job. There's no pressure for this property to perform well every single month, and if there is, that's when you can start to get some animosity and anger if things aren't perfect. But if you guys are doing a part time and there's a lot of ways you can work a partnership Maybe somebody brings all the money and somebody brings the management. Maybe both of you split it 50-50. Maybe there's a 60-30 split.
Speaker 0:And in my case, my first partner I took on he was a 30% partner because I needed the money to get the loan closed on this eight unit. I didn't have enough money. That's literally what it was. I didn't have enough money and so that was the option and I was cool with it and he took a huge chance on me. It was the first property I'd ever bought that was sizable. The only property I had before that was that single family. So he took a chance on me and it worked out awesome. He ended up having to put 20 grand down. He ended up getting 90 grand back, so a huge return for him and pretty stress-free.
Speaker 0:But you have to find what works for you and you have to set expectations, because if you I've seen this so many times I'm talking to one of my buddies about this recently If you don't set expectations for what each of you are going to do in the partnership or not going to do, it can easily create animosity and now what you're expecting to happen doesn't happen, and then now you're angry at this person and then partnership can fizzle out or, worst case, it falls apart and you're in a deal that you really can't get out of easily. You're illiquid. You're in a deal that you really can't get out of easily. You're illiquid, you're upside down. Potentially maybe the equity's eroded away because you're in a cyclical market. And now what do you do? Now? You're really stuck and you're just starting out, which is the last thing. You need starting out. You need to have solid deals and you have solid partnerships and you have everything locked tight your first five deals, because if you make a mistake there or something bad happens there, it's going to be hard to recover, especially if you're working a full-time job. If you're independently wealthy, you probably don't care, but you're also probably not watching this. If you're working a full-time job, this is where that stuff really matters, because you can't necessarily stomach a $5,000, $10,000, $40,000 mistake or a partnership dissolving within its first six months after you just bought a property and tied up a bunch of money with it.
Speaker 0:Obviously, I talked earlier about the real estate license being a really smart idea to get your foot in the door and get to know people in the business and kind of get your feet wet. There's a lot of people that do the wholesaling thing. I'm not a wholesaler, to be clear. I've never wholesaled anything. I have bought properties from wholesalers before, but I just I'm not sold on it personally. I'm all about long term investment properties, and so the wholesaling to me is I've seen guys, these wholesalers, selling these deals that I bought and I'm like why wouldn't they just keep this? They're going to make way more money than the $3,000 or $10,000 finder's fee. They're making off this transaction, but everyone's different and what works for somebody else is not necessarily what works for me, but wholesaling is an option. I wouldn't be the person to go to ask questions about that. Like I just said, I know how it works, but it's not my cup of tea necessarily, so I'm not the expert there. I'm not really an expert in general, but I'm certainly not an expert there. So I'd recommend you go seek out an expert for that, but be careful, because there's a lot of snake oil in the wholesale world. Just be careful, but it is an option out there.
Speaker 0:Now we're going to switch back to where we were just recently talking about house hacking, right? What am I looking for, though? What am I really trying to achieve? And I think, the thing that you most likely are going to be able to achieve is probably just breaking even every month. So I would go through the property and I would say, okay, this is what the property costs, right, go pull up a mortgage calculator and say, okay, this is what the payment is on $100,000. The payment is $600 a month at 7.5% interest or whatever it is. And then I would add in the taxes, I would add in the taxes, I would add in utilities, I would add in insurance, but add in all the all the expenses that you can think of. And then I would figure out whatever that number is.
Speaker 0:Let's say it's $1,200 a month and I would look at the property and say, okay, can the other units sustain a $1,200 a month payment? Will somebody actually apply and live there for that kind of price? And if the answer is yes, then it might be a property worth looking into. If the answer is no, then it might not be the best case scenario, but you could still live there for relatively inexpensively. The big thing would be to figure out how much does it rent for right, and can I live there for cheap or free? And that would be the ideal situation. So that's something I would look at.
Speaker 0:Now there's a second side of it. If you get that property and you can live there for free or close to free awesome. But even better yet would be a property that also has an equity play to it, which means it's undervalued for some reason. Maybe that means the rents are really low there. Maybe that means the property is in a little bit rougher shape. There's some reason that it's not really at full market value and that presents you an opportunity to potentially go in there and learn how to paint and paint the walls and learn how to replace flooring or replace the floor and do a bathroom whatever the case may be, to force that equity right. So you're getting you're almost getting the best of both worlds between a flip house and a rental, and you're getting both. You can live for cheaper, you can potentially have an equity play, and or you can live for free or close to free.
Speaker 0:To me that's like the trifecta. We'll call that the trifecta right. So we'll go back to the property. If you're going to live in one, if you found a property that you're going to be able to pull off and buy because you're going to be a first-time home buyer, so it's going to be 3% down. It may be potentially 0% down if you're a VA buyer, so you've got some options right and so owe on it and or makes a little bit of money, boom, you got the rental play right there. If it's beat up and needs some paint, it needs some flooring, it needs a kitchen, it needs some landscaping, okay you might have the equity play there.
Speaker 0:And then, lastly, I'd be looking at okay, I have those two things. If I can also learn how to property manage, I can learn how to manage an investment relationship. Potentially, if you're going to live there and it's an investment property and goes through an investment loan, you would potentially have that angle too. Now the problem with that is you're going to lose the ability to do that three percent down. You're probably more like 20 25 down. So it might not be the move right away, but at least if you can get the equity and the the rental play, that would be huge, because then you can get the best of both worlds and you have your own little flip house in a way and you also have a rental property all in one and you're living for basically free and or making a little bit of money. That would be awesome. So I think that would be a really interesting way to start and that's what I would recommend people start with, because it's small enough that you can understand it and get a hold of it and not get bankrupted by the slightest inconvenience.
Speaker 0:And, as I say, if you look at this whole thing as like an elephant, how do you start eating an elephant? A bite at a time? This would be your first bite, I would think. So another strategy that goes in line with all that is let's say you buy a property that is cash flowing a little bit. It's spinning off a little bit of money. Let's just say you buy this property and it's actually losing you some money, right? So it's costing you $300 a month to live there. Whatever $300 a month, that's way better than what it would be as a market rent if you were just renting a place.
Speaker 0:But then you have an added benefit of living there In Wisconsin. That's two years. You live there for two years as an owner-occupant. When you go to sell it, you're not going to get taxed on capital gains. So if you have a gain to be seen which hopefully you would, if you have something that has an equity play to it and or inflation erodes away your debt and it ends up being worth a little bit more. Now when you sell it, you're not going to get hit on capital gains, so now your money can be propelled even further forward without being penalized by the government. So that's a huge play right there, and if you're starting out, every dollar matters and that's a great way to get yourself going. So that's an awesome addition and something that people don't really think about, because they get that check at closing. They say I made $150,000. Uncle Sam is going to say buddy, let me get a piece of that. So just keep that in mind.
Speaker 0:Some things to avoid I would say flip houses, not in general, but definitely the higher end flips. If you have five grand and you're working a job or maybe two jobs to get through this, I really would not recommend a flip house right away, because the costs are just going to be really expensive. You're not only going to have that flip house, but you're also going to have your own residence that you're paying for, and so financially it's going to be painful. If you think you can stomach it, if you make the kind of money that you think you could do it, it may still be on play and it may be worth talking about in a future video, but if you're just trying to get your foot in the door in 2025 and get started in rental real estate, I really would recommend that you stay away from a flip, even if it looks enticing it's quick money and all this.
Speaker 0:I think there's a lot of ways that people go broke. I see these deals come through all the time, with people that get through three quarters of a flip. They run out of money and suddenly it's back on the market or it's given back to the hard money lender that gave them money to work on it and it's just going to be really messy. So I would really just be cautious with that. Don't get in over your head and really understand the numbers before you get going and or be able to fix it yourself, and if the more stuff you can do yourself, the more money you're going to save. If you can trade your time for labor instead of paying for somebody for labor, you're going to be in a better spot.
Speaker 0:People get enticed with the burr strategy stuff in like horrible neighborhoods, and I would also recommend against that, just like I would recommend against buying a property that's not in your local area. That may be tough for some of you who live in really expensive areas, but it's really tough to get good at this business if you're buying out of state and you don't even understand what you're buying. And I've been the benefactor of this stuff. I've sold properties to people from out of state that are paying what I believe to be a really inflated price, but they don't get it because they're coming from California or they're coming from somewhere else and they just don't. It's a totally different market for them. It's worked to my advantage, but I don't want you to be disadvantaged by that same thing. So I would really recommend to invest where, aka where you live, or move to somewhere where it's more palatable.
Speaker 0:A podcast I used to love listening to is the Real Estate Guys Radio, I think it was called, and I'm sure they're still around, but they had way too many ads and it started driving me nuts. But they always used to say live where you want to live, but invest where the numbers make sense. Obviously, it's easy when you're rich to do that, but when you're starting out, not so easy. But if you're not really tied to where you're at and you'd like to go to a location that maybe is more favorable for rental property. I would recommend it because some of the places that people end up just by happenstance living in are really not landlord friendly and or achievable for somebody on a very minimal income. Midwest has been pretty good. It's been hot lately just because people are trying to go to cheaper places with how bad inflation has been. But I would at least keep that as an option open if you're really serious about this business.
Speaker 0:High interest, dscr loans, debt service coverage ratio loans the great product for certain things. But I wouldn't recommend staying away from it, probably to start. It's really expensive debt. It's just. It's something I would recommend for somebody down the road that's just trying to place debt on a property and get out of maybe a hard money loan or something like that. But if you're just starting out, if you're going to plan on keeping the property and do like a house hacking type strategy, you want to be on the best interest rate you can possibly get and DSCRs are usually higher interest rate and a little bit more expensive. Basically all around. That's including, like your origination costs, your closing costs in general and then also servicing the debt on the loan. So I would recommend maybe staying away from that at the beginning.
Speaker 0:To close this out, I would say I would really think about how to find something that's sustainable, and to me, the most sustainable route right now, in a 2025 world, is something that has a low down payment aka you're going to live in it and something that has both an equity and a rental play. So if I was going to do this, I would be looking really hard for a duplex, a three family or a four family, probably mostly a duplex that I can live in, rent out the other side and live for either free or very close to free. Best case scenario I'm turning a profit, but the biggest thing I would want is some sort of equity play. It's beat up, it's been owned by the same person for 30 years. They haven't done anything to it.
Speaker 0:That's what I'd be looking for right now, because I think that's the best case scenario for you.
Speaker 0:It's the best chance of you to find something that not only can make you money when you sell it let's say, two years down the road, once you deferred the capital gains in my state I don't know how it is everywhere but you also have the play of living for almost free or living getting paid to live there. You have a bunch of options to choose from there and I think that's your best chance to get yourself a nice, solid foundation to launch yourself forward through and you'll understand the business. You're going to learn property management, you're going gonna learn what it's like to have tenants, you're gonna learn all the unexpected expenses that people come across in rentals and you can apply that knowledge down the road to your next rental and make that one even more successful. So if it was me in 2025, that would be my strategy going forward. I appreciate anybody that's taking the time to watch to this point in the video and I hope you guys have a great night. I'll talk to you guys.