Episodi

  • Buying Real Estate in 2026

    Buying Real Estate in 2026
    Feb 18 2026
    What's Working in Today's Real Estate Market (2026) By Lex Levinrad Do you want to learn how to wholesale real estate, buy rentals and fix and flip houses? On the Investing in Real Estate Podcast, I share practical strategies to help investors like you get started investing in real estate. The goal is to help you move one step closer to achieving financial freedom through real estate. I have been investing in real estate buying and selling houses for over 23 years. I have personally purchased and flipped over 1,500 single family homes. Together with students in our Partnership Program, more than 4,500 deals have been completed. I want to share with you the experience that I have from buying and selling over $500 million dollars of real estate over the past 23 years. I will show you a real-world perspective shaped by multiple market cycles including the boom years of 2003 to 2008 (when real estate prices doubled). This was followed by the Financial and Housing Crisis of 2008 which led to the collapse of Bear Stearns, Lehman Brothers,Indymac Bank and Washington Mutual. I started my real estate training program in October 2008, as the foreclosure crisis began and started buying bank owned properties in 2009. That same year we were taking students on bus trips to visit bank owned homes and teaching them how to buy and bid on bank owned homes. There were so many deals that out of necessity we were forced to flip many of them because we could not keep them all. Banks were literally giving them away. After that, we had the recovery and the boom and rapid rise that followed in real estate prices from 2009 to 2020 where prices doubled. And then we had the covid effect, where free money, and low interest rates created a frenzy for investors and prices doubled again. Now, I focus on teaching my students what has happened from 2022 to 2026, and where we are right now in the real estate cycle. As a real estate investor you need to understand this in order to position yourself accordingly to be ready to buy in the next foreclosure crisis (which is rapidly evolving). Today's podcast focuses on what is working in the current market environment in 2026 and what strategies real estate investors like you should be wary of and should approach with caution. This applies to you regardless of whether you are brand new to real estate or are an experienced investor managing multiple properties. My Journey From Stocks to Real Estate My journey into investing in real estate began with uncertainty and zero knowledge. From 1989 to the early 2000s, I was employed as a stock broker and financial advisor (money manager). I made almost a million dollars a year as a top producer for a company that ironically cleared through Bear Stearns (which collapsed in 2008). After the Nasdaq Stock Market crash of 2000, I began questioning whether I wanted my financial future tied entirely to external market forces like the stock market going down and crashing (like it did in 2000). At the time my wife did not work and we had a one year old child. It was very unsettling and destabilizing to watch how quickly the stock market could collapse and ruin your life the way it did. Around that time in mid 2000, I saw an infomercial on late night TV by a guy named Carlton Sheets. He had a program called "No Money Down" and the infomercial introduced the idea of buying property with little money down. The concept resonated with me, especially after losing my stock brokerage business and searching for a new direction. Carlton Sheets was based in Florida and in his program he spoke about how you could buy 3 bedroom houses in Stuart Florida for $45,000. At the time, I was living in Los Angeles, where homes cost $450,000 to $500,000. The idea of purchasing rental properties in Florida for 1/10th of that price made buying rental properties in Florida seem far more attainable. I also liked the fact that there were no State Income Taxes in Florida while in California I was paying over 11%. After discussing it with my wife, we decided to go on a trip to Florida on Memorial Day weekend in May 2003. We loved what we saw and that weekend we made the decision to leave California and move to Boca Raton, Florida. We immediately listed our home in Los Angeles for sale and received multiple offers within 24 hours of listing our home. We sold our house and relocated to Florida. The goal was to pursue a new beginning for my family and to focus on a new career in real estate. The initial plan was simple: buy ten rental properties, own them free and clear and then retire. Looking back, that goal was naive, but it was a starting point. As we purchased more rentals, the goal expanded from ten properties to twenty, then to fifty, and then to 100. Learning the Business from the Ground Up My first year in real estate was essentially an apprenticeship. I worked under my mentor Ben and his partner Alan. I learned how and why motivated sellers sell properties below ...
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    1 ora
  • What is Working In Today's Real Estate Market

    What is Working In Today's Real Estate Market
    Feb 11 2026
    What is Working In Today's Real Estate Market Podcast Transcript Hello everyone, and welcome to the Investing in Real Estate Show. I'm your host, Lex Levinrad. In today's episode, I want to discuss two important topics: first, whether we are heading into a new foreclosure crisis, and second, what strategies are currently working for real estate investors in today's market. Let's begin by discussing the overall state of the market and whether we are moving toward a foreclosure crisis. There are several ways to look at this. If you compare today's data to the peak levels seen in 2008—particularly foreclosure numbers and MLS inventory—you could argue that the market is still in relatively good shape. That assessment would be accurate. However, when you examine year-over-year trends, a different picture emerges. Foreclosures have increased significantly, bank-owned properties are up year over year, and MLS inventory has risen substantially. For example, in our local South Florida MLS, there were approximately 15,000 properties for sale in 2022. That number doubled to 30,000 in 2023, increased again to about 45,000 in 2024, and has now reached nearly 60,000 listings. While these numbers are not yet comparable to the levels seen during the 2008–2009 crisis, the market has clearly shifted. We are now in a buyer's market, and sellers are facing increased challenges. There are, of course, exceptions. Certain luxury markets—particularly waterfront properties or ultra-high-end neighborhoods such as Lighthouse Point or Boca Raton—remain relatively unaffected. High-net-worth buyers are generally less sensitive to interest rates and economic fluctuations. However, affordability remains a major issue for the average household, especially in South Florida, where median home prices are often beyond what the typical U.S. income can comfortably support. When you look beyond South Florida and examine markets across the Midwest and other regions of the country, affordability pressures become even more apparent. Florida, in particular, tends to behave as a boom-and-bust market, unlike more stable markets such as Cleveland, where price swings are typically less dramatic. Markets such as Austin, parts of Nevada, Arizona, and Florida have experienced sharper corrections, especially in areas like Southwest Florida, including Cape Coral and Naples. Currently, the situation is widely described as a housing crisis rather than a financial crisis. However, it is possible that financial impacts could increase over time if mortgage defaults and foreclosures continue to rise. Banks may respond by tightening lending standards, particularly institutions that originated large volumes of loans at peak prices or that hold depreciated bond portfolios. From my perspective, what I am seeing on the ground—particularly in what I refer to as "middle America" markets—is a growing shift toward affordability-driven investing. My focus has historically been on affordable markets within Florida and other regions where housing costs align more closely with rental demand and average incomes. Early in my career, while living in Boca Raton, I began purchasing properties further north in areas like Port St. Lucie, where homes were significantly less expensive. As prices increased there, I moved further north again into markets such as Fort Pierce, where properties were even more affordable. These purchases generated strong cash flow despite being located in lower-income neighborhoods, because acquisition prices were low relative to rental income. Today, I see similar opportunities emerging again in certain markets. Investors should pay attention to areas experiencing population growth while still maintaining affordability. For example, parts of Brevard County have seen strong growth and are attracting investor interest as prices in previously affordable areas have risen. In recent months, we have completed several transactions that illustrate current opportunities. In one case, a distressed property listed on the MLS for $100,000 eventually sold after a lot of negotiation for $50,000. Without making any improvements, we relisted the property and sold it for $70,000. In another case, a tax-delinquent property was acquired for $110,000 and resold shortly thereafter for $145,000. Opportunities to buy properties and flip them for a profit exist when you buy at the right price. This leads us to the question of what strategies are working in today's market. The Buy, Repair, Rent, Refinance strategy (BRRR) continues to perform well, particularly if you focus on lower priced affordable housing. Investors benefit from a clear exit strategy because rental demand remains strong, rents are up significantly and financing options such as DSCR loans allow investors to qualify based on rental income rather than personal income. With rents remaining elevated since the pandemic, affordable rental properties—especially those eligible for programs such as ...
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    27 min
  • Sellers Are Capitulating

    Sellers Are Capitulating
    Oct 28 2025
    🎙️ The Investing in Real Estate Show Sellers Are Capitulating Hosted by Lex Levinrad Hey everyone, and welcome to the Investing in Real Estate Show. I'm your host, Lex Levinrad, and on today's episode, I want to talk about what's happening right now in the real estate market — because things are changing very rapidly. For the first time in a while, we're beginning to see signs of capitulation. Now, capitulation is a term that comes from the stock market. It describes the point when investors give up — when stocks have been falling and people finally throw in the towel and start selling. We're starting to see that same kind of behavior in certain areas of the real estate market today, and I expect we'll see even more of it in the months ahead. Year-over-year, foreclosures are up 17%, bank-owned properties are up 34%, and there's a noticeable increase in short sales, pre-foreclosures, and REO listings on the MLS. Many of my students are now finding deals on auction sites like Auction.com and Hubzu.com, and I believe that trend will continue throughout the next year or two. So, the big question is: Where are we in the cycle, and where might the market bottom out? Historically, the real estate cycle runs about 18 years — roughly 13 to 14 years up, followed by 4 to 5 years down. If we peaked around July 2022, then that would suggest a bottom sometime between mid-2026 and mid-2027. Now, real estate is hyper-local. Condos behave differently from single-family homes, and markets like South Florida don't move the same as the Midwest. Condos in South Florida, for example, have been hit hard — partly due to the unresolved Surfside law, with only about half of buildings having completed inspections. That's why, in our training programs, we focus primarily on single-family homes. It's also important to understand that not all single-family markets are the same. The $350,000–$400,000 "median" home that a typical family buys is a completely different product from a $150,000 starter home — and both are worlds apart from the $5 million waterfront properties here in Deerfield Beach. The luxury market remains relatively resilient because those homes are scarce, and many are purchased with cash by wealthy buyers. But that's not the market I teach or invest in. My focus is middle America — the average family earning $70,000–$80,000 a year, buying a modest 3-bedroom, 2-bath home. For that family, affordability is the key issue. At today's prices and rates, that household can typically afford around $2,000 to $2,100 per month, including taxes and insurance. The challenge is that, with 11 rate hikes since 2022, those numbers often don't make sense for buyers — it's often cheaper to rent than to buy. For affordability to return, home prices and interest rates both need to drop by about 20%. Now, the economy itself is in a strange place — a mix of stagnation and inflation. We've got gold, silver, and stocks rising while more Americans are falling behind on car payments, credit cards, and mortgages. It's a divided economy — the haves and the have-nots. The wealthier segment owns assets like real estate, stocks, and Bitcoin. But 75–80% of Americans fall into the lower or middle-income bracket, and they're feeling the squeeze: higher rents, higher food prices, higher everything — without matching wage growth. We're also seeing record levels of credit card and auto loan defaults, and foreclosures are climbing. Many people are struggling to keep up with mortgage payments, and businesses — including trucking companies — are shutting down at record rates. Given that, I believe the Federal Reserve will have little choice but to cut rates soon, even if inflation remains a concern. Now, let's talk about what this means for real estate investors. Some markets — particularly in the Midwest — remain relatively steady. They don't see huge gains, but they also don't experience massive losses. In contrast, "boom and bust" states like Florida and Texas swing more dramatically in both directions. For example, in markets like Austin, Texas or Phoenix, Arizona, we've seen homes that sold for $420,000 just three years ago now selling for around $240,000 — nearly half the price. In parts of Florida, such as Cape Coral, prices and rents have both fallen, while insurance and property taxes have risen — squeezing investor returns. So, what works right now? The answer is simple: focus on affordability. Forget the luxury market, forget high-priced areas, and concentrate on properties with an ARV (After Repair Value) of $300,000 or less. If you can buy at 60 cents on the dollar, that means targeting homes you can purchase for around $180,000 that are worth about $300,000 fixed up. That's where my students are finding success. For example, one of my students recently bought a home for $105,000 in a market where comps were $220,000, and another paid $107,000 in that same market. We're not seeing deals like that ...
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    32 min
  • The Current State Of The Real Estate Market in 2025

    The Current State Of The Real Estate Market in 2025
    Sep 16 2025
    TRANSCRIPT: Hey everyone, welcome to the Investing in Real Estate Show. This is your host, Lex Levinrad. In today's episode, I want to talk about the changing real estate market. And I've got to tell you—things are changing quickly. I had a Boot Camp event a couple of weeks back, the Buying Rentals and Building Wealth Boot Camp. We were showcasing some case studies, and one of our students, Manny and Haley, had acquired a property for just $105,000 in Palm Bay. They decided to wholesale and flip that property. I was actually the buyer—I ended up purchasing that property for $110,000. Now, what's interesting is when I went to look at the property and the surrounding neighborhood, I saw three houses listed for sale on Realtor.com. One was listed at $270,000, another at $275,000, and another at $330,000. I looked at the ARV. They told me they thought the ARV was around $210,000 to $220,000. That's probably accurate. Let's say $220,000. At my previous Boot Camp, I even pulled this up on the screen and showed everyone how they found the house—by using Driving for Dollars and direct mail. Ironically, this house actually hit two lists: it was both on a tax-delinquent list and a Driving for Dollars list. Originally, they offered around $125,000 to $130,000, but they negotiated down to $105,000 and the seller accepted. Then they just turned around and flipped that house to me. So when I hear people saying things like, "You can't find deals right now," or "Fixing and flipping is dead," or "Rentals are dead"—I've got to push back. If you're only looking at surface-level information (what you see on social media or in an article), you'll never dig deep enough to see what's really going on. I actually made a public Facebook post about this about a week ago. I talked about how many investors were buying at the bottom of the market in 2009, when I was buying in Miami. Back then, there were about 300 investors active. Fast forward to the peak of 2022, and according to Redfin data, there were 4,400 investor buyers. The numbers correlate inversely: when the market was cheapest, the fewest people wanted to buy. When the market was the most expensive, the most people wanted to buy. On the surface that makes no sense, but if you study history, it makes perfect sense. Back when I worked on the trading floor in Chicago, one of the required books was Extraordinary Popular Delusions and the Madness of Crowds. It explains why people buy the most at the top and why no one wants to buy at the bottom. Think about it: Tesla stock at $200, then $300, then $400, then $500, and people say, "Man, I should have bought it." By the time it's at $800 or $900, they finally jump in—and then it crashes back down to $300 or $400. Same story with Bitcoin. Same story with real estate in 2006–2007, when people were lining up all night in Boynton Beach to buy houses. Why? Because people felt they couldn't go wrong—it had worked in the past. That's the fallacy: investing by looking in the rearview mirror. "It worked last year, so it'll work this year." But markets ebb and flow. For example, rental properties are normally priced when they sell at about 100 times monthly rent. At 200–250 times rent, they're overpriced. At 50 times rent, they're underpriced. At the peak of 2022–2023, many deals were selling at 250 times rent—clearly overpriced. During the 2008 financial crisis, we were buying at 30 times rent. We bought houses in Port St. Lucie—three-bed, two-bath homes—for $36,000 or $37,000 that had previously sold for $200,000, and they rented for $975 a month. That's instant cash flow. So why wasn't everyone buying then? And yet, when those same houses went back up to $325,000 or $350,000, then everybody wanted to buy. That's human psychology. Fast forward to today: I've seen these cycles over 23 years in real estate. We just turned the corner from a seller's market into a buyer's market. Inventory is up, prices are down, and sellers are slashing prices. Yet investors are fleeing. Why? Because they're listening to the noise instead of the numbers. At my Foreclosures Boot Camp in February 2022, there were only 15,000 houses listed on our local MLS. By February 2023, that doubled to 30,000. By 2024, it was 45,000. Today, it's close to 70,000. Inventory has quadrupled in just a few years. At the same time, prices have fallen 15–20% on average, and in some markets like Miami or Kissimmee, as much as 25–30%. That's a massive pullback. Yet most people still think real estate is "fine." They don't realize investors stopped buying in 2022—the hedge funds, Zillow, Opendoor, all the iBuyers—they pulled back first. The average mom-and-pop investor only started to realize in 2024 and 2025 that prices weren't going up anymore. That's why right now, this is a better environment to buy than it was a year or two ago. Deals at 60 cents on the dollar are increasing. But only the real buyers—the ones who understand value—are still...
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    19 min
  • The Opportunity With Section 8 Rental Properties

    The Opportunity With Section 8 Rental Properties
    Aug 15 2025
    TRANSCRIPT Hi everyone, welcome to the Investing in Real Estate Show. This is your host, Lex Levinrad. On today's episode, I want to talk to you about the opportunities in today's market with rental properties. We have a very unique set of circumstances that have led us to where we are now. The first thing we saw was the absolutely crazy increase in prices that happened after COVID, from 2020 to 2022. There was a huge jump—most areas increased at least 50%. In some areas, prices went up as much as 70%, 80%, even 100%. With this huge price increase, it became nearly impossible to find cash flow. It just didn't exist. But there was another thing that happened after COVID—a direct result of COVID—and that was the inflation effect. The government pumped a lot of money into the economy with EIDL loans and PPP loans, and people were flush with cash. This is one of the reasons prices went up so much. And it wasn't just real estate—everything went up. Even the prices of Rolex watches increased. There was simply too much money floating around in the system. The net result of that was inflation, which we were all aware of. Suddenly, rents were going up, along with the price of food, gas, and everything else. The concept of rents going up is very important. Regular market rents increased quite a bit. Looking at my own rentals, for example, a property that rented for $1,300 went to $1,475, then the following year to $1,550, and the next year to $1,675. That's a significant increase. I have a HUD Fair Market Rent tool on my website at www.lexlevinrad.com/hud. You can use it to see fair market rents. You simply select your state and city, and then you can view all the ZIP codes in that city. For example, if you're in Florida, you could choose Broward County, then Fort Lauderdale, and then view the rents HUD pays for a three-bedroom in each ZIP code. This tool works nationwide. One thing to note is that the number you see is the maximum amount, including utilities. If HUD lists the maximum at $2,100, my experience is that actual Section 8 rents end up around $1,900. I generally deduct $200–$250 from the HUD number to get a realistic rent amount. Before buying a property, I recommend calling the housing authority in the area. If you're thinking about renting a property with Section 8 in Deerfield Beach, Florida, for example, call the Deerfield Beach Housing Authority and say, "I'm a landlord with a three-bedroom, two-bathroom rental. What rent could I get for Section 8?" Even better, visit them in person. Many times, they have flyers or TV monitors showing current rental listings. You must first understand what you can get for rent because cash flow is your top priority when buying rental properties. Many people in real estate have heard the phrase "location, location, location." I think this is often misleading. You can buy in the best location in the world—even Beverly Hills—but if you overpay or it doesn't have cash flow, you'll lose money. Yes, location is important, but if you had to choose between a great location with a bad return or a less desirable location with a strong return, I would choose the strong return. For example, I lived in Boca Raton, Florida, for 20 years. It's an upscale, highly desirable area. If you're buying for appreciation potential, that makes sense. But if you're buying rentals, you're not living in the property—your tenant is. When you buy rentals, what matters most is how much rent you can get and whether it will cash flow. Cash flow is rule number one. If you're starting out, Section 8 is a good place to begin. I'm not saying you'll stay there forever—eventually, you may want to own rentals in higher-quality neighborhoods with higher-quality tenants—but when starting, cash flow is key. Areas with low prices and high rents give the best returns. A great place to start is by checking Section 8 rent amounts with the HUD tool at www.lexlevinrad.com/hud. You enter your state, city, and ZIP code to see what HUD will pay for a three- or four-bedroom. That's tool number one. Tool number two is price. We currently have an unusual set of circumstances making rentals an especially good opportunity. First, real estate prices peaked in 2022. In Florida—especially the condo market—prices have since dropped significantly. In some areas, I've seen 30% declines from the peak. Some markets, like Boca Raton, are holding strong, but others—Palm Bay, Kissimmee, and similar—have dropped more. It's not just Florida. Markets like Houston, Las Vegas, and Phoenix have cooled considerably. The second factor is how much rent you are getting. Section 8 rents are set by the government, and because of inflation, HUD's rent amounts have increased dramatically. Properties renting for $1,500 two years ago may now rent for $2,000. This means that while prices have come down, rents have gone up, creating cash flow opportunities. For example, in Florida, a $200,000 ARV (after-repair value) ...
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    37 min
  • How To Make more Money

    How To Make more Money
    May 20 2025
    On today's podcast episode I talk about how to make more money. I talk to some students at my real estate training events who are looking for ways to increase their income. Not everyone is interested in waiting years to build wealth and equity with rental properties. Some people are looking to make more money now. And that is what today's podcast episode is about. Many new real estate investors are attracted to real estate investing and specifically wholesaling and flipping houses, because they are looking for an easy way to make more money. But I have noticed that these people who are looking to make more money usually have either a spending issue or an income issue. People that are looking for more income usually have a few things in common. They have too much credit card debt, may have student loans, have too many expenses, and not enough income to cover all of those expenses. The net result is a struggle to pay the bills every month. What we call the "rat race". How do you get out of that struggle of living paycheck to paycheck? For some it's a spending issue where they simply spend too much money relative to their income. For other's it's an income issue where they simply need to learn how to make more money. For most people it's a combination of both too much spending and not enough income. And what is surprising is that I see this even with people who have relatively high incomes of $150,000 or more. People tend to increase their expenses as they increase their income. And that is what keeps them stuck in the rat race. Keeping up with the Joneses, buying new cars and nicer houses to impress your neighbors is a poverty cycle that will keep you broke forever. So how does one learn how to make more money? Is the answer to get a better job? Or is it to switch jobs or even get a second job? The answer lies with none of these. Instead what is needed in order to make more income is to gain specialized knowledge. A person working at a fast food restaurant does not have specialized knowledge and that is why they make $13 an hour. Anyone could do their job. Few want to. They have no specialized knowledge. The more specialized knowledge you have, the more money you will make. You need to learn specialized skills. A good example of a specialized skill is learning how to be a property scout or deal locator. We call these people "real estate bird dogs" in the industry. If I paid you $5,000 or $10,000 for every house that you found for me, then how many houses would you need to find per month to exceed the income from your job? The answer is not many at all. If you knew how to find houses you would have a specialized skill that could make you a lot more money than what you are currently making. If you become good at locating wholesale real estate deals at discounted prices, then getting paid to find these deals by an investor like me will make you a lot of money. Learning how to flip these deals to other investors for a profit is a specialized skill called "wholesaling" which can make you a lot more money than what you are getting paid at your job. It's a specialized skill. And it's a skill that you can learn. I teach this skill at the Wholesaling Real Estate Boot Camp. Learning how to buy foreclosures and bank owned properties is a specialized skill too. I teach this at the Foreclosures and Bank Owned Properties Boot Camp. Even learning how to buy rental properties at a discount and how to employ the Buy, Repair, Rent and Refinance Method is a specialized skill. I teach my students how to do this at the Buying Rentals and Building Wealth Boot Camp. These specialized skills will make you a lot of money because most people do not possess this knowledge. Regardless of your real estate investing strategy, whether you want to buy and rent, fix and flip, or wholesale and flip you need to know how to find deals. The more deals you can find, the more money you will make. And that skill set of knowing how to find deals is very valuable. Doctors and dentists, and other busy professionals that want to buy rental properties don't have time to search for and locate deals. They want someone to bring deals to them. That is why wholesalers get paid so much to locate deals. The skill set of learning how to locate deals is a skill set that you can learn. I have taught over 7,000 students these skill sets at my real estate training events. Learn how to buy foreclosures and bank owned properties at the Foreclosures and Bank Owned Properties Boot Camp. Learn how to be a deal finder and get paid to find deals with my Real Estate Bird Dog and Partnership Program. Learn how to find wholesale deals at the Wholesaling Real Estate Boot Camp. Learn how to fix and flip houses at the Fixing and Flipping Houses Boot Camp. Learn how to buy rental properties and build wealth at the Buying Rentals and Building Wealth Boot Camp. These are all specialized skills that can be learned. If you learn these specialized ...
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    30 min
  • Understanding the BRRR Method

    Understanding the BRRR Method
    Apr 29 2025
    On today's podcast episode I talk about the Buy, Repair, Rent and Refinance strategy commonly referred to as the BRRR Method. This is one of my favorite real estate strategies and one of the easiest ways that I know to create long term wealth with real estate. The Buy, Repair, Rent and Refinance Strategy was the method that I used to make my first million dollars in real estate. It has helped me, and many of my students become multi millionaires. Ironically, out of all the real estate investing strategies that there are, it's the easiest strategy to employ for a beginner and requires the least amount of effort. The BRRR Method consists of four components BUYREPAIRRENTREFINANCE BUY The first step is to find a rental property that would work using the BRRR Method. Your goal is to find a property that you can buy, repair, rent and refinance where all of the costs of the purchase and renovation of the property are covered. Once you locate a property, you purchase it using a loan from a private lender. I teach my students how to get private lender loans at my real estate training events. REPAIR The second step is to repair and renovate the property. We call this stage the "rehab" stage. Before you can rent the house to a tenant, you will need to make the property rent ready. How much work is required to make the property rent ready depends on the property. Some houses only need a new coat of paint and fresh carpets. Others require more renovation like updating the flooring, the kitchen, and the bathrooms. Some houses require major renovation like new roofs, central air conditioning, plumbing or electrical work. In some cases you may be able to buy a property that is already rented (with a tenant in place). In this scenario you can skip the repairs because the house is already rented and does not need to be repaired. However, usually, for the BRRR Method to work, you would need to buy the property at a substantial discount to market value. And that means that most of the time the property would require repairs. RENT The third step is to rent the property. You will need to have a tenant in place in order to be able to refinance your mortgage. The bank will want to see the amount of rent that the tenant is paying, and will want to verify this by getting a copy of the lease, and also by confirming that the rent is being deposited into your bank account. You would typically collect the first month's rent, last month's rent and a security deposit from the tenant when renting out the house. REFINANCE The fourth step is to refinance the mortgage to a lower interest rate fixed mortgage. In order to refinance the mortgage the bank will require an appraisal. For investment properties, banks will typically lend 75% of the appraisal value. A house that appraises for $200,000 would be able to get a mortgage for $150,000. The goal with the refinance is to get enough money from the bank in the refinance to pay off the private lender and to cover the purchase price and the repairs plus all closing costs and other fees like points, interest, and insurance. Done correctly, (like in the example I used in this podcast episode) you can buy a house with no money down using the BRRR Method. EXAMPLE On the podcast episode I spoke about a house that could be purchased for a purchase Price $80,000. Assume you could get a private lender loan from someone like me for $70,000. If this property required repairs of $30,000 and fees and points and closings costs were $10,000 then your total cost to purchase and repair this property would be $120,000. After the house was repaired, let's say you rented it to a tenant for $2,000 which is the going market rate. Now that the house is rented, your goal would be to refinance the mortgage so your mortgage broker orders and appraisal and the house appraises for $200,000. The bank is willing to lend you 75% of the appraisal amount which is $150,000. I recommend the 15 year fixed rate mortgage so that your house is paid off in 15 years (or less if you pay a little extra each month). You have to pay back the private lender loan of $70,000. You also want to pay yourself back the cost of the repairs ($30,000) plus the cost of the fees and points and closing costs from when you purchased the house ($10,000). In some cases you may have used Home Depot cards to pay for materials and you may have paid your contractor with a credit card. HERE IS THE BREAKDOWN Purchase Price $80,000 Private Lender Loan $70,000 Fees and Points $10,000 Total Cost $90,000 Repairs $30,000 Total Cost Including Repairs $120,000 Your Cash Out of Pocket (or credit cards used or a combination of both) would be the $10,000 down payment, plus $10,000 in closing costs, points, fees and insurance plus the $30,000 in repairs. The total cash out of pocket would be $50,000. This could be borrowed from a relative or friend or it could be a combination of credit cards, savings and Home Depot cards. APPRAISAL Appraisal ...
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    38 min
  • How To Buy Houses in 2025

    How To Buy Houses in 2025
    Apr 17 2025
    On today's podcast episode I talk about how to buy houses in 2025 and what to look out for as an investor when buying in today's market. The past 3 years have been an interesting time for real estate investors - especially in Florida. We have seen interest rates move up from a low of 2.65% in 2022 to above 7% by October 2023. This rapid increase in interest rates which was orchestrated by the Fed to reduce inflation had a very sobering effect on the real estate market. Prices peaked around July 2022 and have been on a gradual decline ever since. Over the past year, the market has shifted from a seller's market where it was easy to sell, to a buyer's market where buyers can be very selective. Sellers have been slashing prices on properties listed on the MLS and inventory has been rapidly increasing in many areas. In some areas like Southwest Florida, in some cities the number of listings on the MLS has quadrupled over the past few years. Some of the notable changes that have occured over the past few years are: Hedge Funds, Private Equity Funds and iBuyers stopped buying houses.These same hedge funds and private equity funds are now selling houses.Builders have had to slash prices and provide incentives to lure buyers in.Higher interest rates and prices means less buyers can qualify for a mortgage.Banks and mortgage lenders are becoming much more cautious on lending. So how have these changes affected real estate investors who are wholesaling and flipping houses, fixing and flipping houses, and buying rentals and Airbnb's? The first major change is you have to be very weary of sold comps (comparable sales). A house that sold 3 months ago may have gone under contract 5 months ago, and prices may have been ten percent higher. If you are planning on fixing and flipping and it usually takes you four to six months from purchase to sale, it may now take you longer to sell, and you may have to decrease the asking price. During that longer holding period, you will have additional interest payments. You may also be looking at an additional ten percent decline in pricing by the time the house sells. For investors that are fixing and flipping, they have a situation where prices are coming down and they may continue to come down. I recommend that you build in a profit margin of 10% from sold comps, and then add an additional 10% for potential price declines. This is a very conservative assumption, but it will help you stay profitable and out of trouble. It will also make you reject almost all deals that are presented to you. In this market you will need to buy at deep discounts. Keep an eye on home builders and the pricing of new homes because that is also putting downward pressure on comparable sales. If a brand new 1,800 square foot home that was built in 2025 is selling for $380,000 then why would someone pay $350,000 for your 1989 house that you fixed up which is only 1,200 square feet? Don't only look at sold comps because if you do you will over estimate the ARV and what the house could be sold for. Always pay attention to the home builders because their pricing puts a ceiling on comparable sales. If you are watching the builders, then you will know when they are slashing prices and you will be able to adjust your comparable sales and ARV accordingly. In today's market it is more important to look instead at current listings on the MLS than comparble sales. Pay attention to how long homes have been listed (days on market) and how much sellers are slashing their asking prices. Sold comps may tell you a house is worth $350,000, but if there are 3 houses listed for sale at $320,000 then ask yourself if you called the realtor and made an offer would the seller accept $310,000 or $300,000?. If the answer is yes, then the ARV today is $300,000 (not $350,000). And yes that is a shocking price decline. But it's also reality. If you are fixing and flipping, if today's ARV is $300,000 what will it be in six months? I recommend that you consider reducing your ARV estimate by an additional 10% to account for potential additional price declines and you run your offer price off of those numbers. If you are fixing and flipping be very conservative and buy at deep discounts! This means you probably will need to reject most deals that are presented to you. You won't find a great deal from a wholesaler who is marking up their price by $50,000 or $100,000. Also watch out for ARV estimates from wholesalers (they are probably too high). If you are wholesaling, consider that your cash buyer investors are the fixers and flippers described above. If they are buying deep, you will need to get houses under contract at deeper discounts in order to be able to flip them to those buyers for a profit. If you are buying at 60 cents on the dollar, you will not have a problem flipping houses. The days of paying 80% of ARV and flipping a house for 90% of ARV are over. Wholesalers will have less cash buyers to flip houses to because ...
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    43 min