Real Estate Deals Are BACK (The Market Just Shifted)

InventoryIf you’re looking to invest in 2025, you need more than just headlines. You need data, and there’s no better guide than our guest today, Dave Meyer.Whether you’re on the sidelines or already in the real estate investing game, Dave’s breaking down what’s really happening in the market and how you can use it to your advantage.This is the Real Estate Rookie podcast. And I’m Ashley,And I am Tony j Robinson. And let’s give a big warm welcome to Dave. Dave, thank you for joining us today, brother. Thanks for having me. I’m excited to beHere.Dave is like our big brother from the OG BiggerPockets podcast who has come today to share his knowledge with rookie investors. So I think Dave, the first thing we want to talk about is kind of what does the 2025 data say? So what is the single most important shift in the housing market that rookie investors should understand right now?Well, my job is getting more fun. I think for the last three years, everything was just always the same. There was tight inventory, it was tough to find deals, but that is actually starting to shift. We’re moving more towards what would be called normally a buyer’s market. And I think this is exciting for investors personally. Just for my own investing, I am getting more excited about looking for and buying deals because there’s just going to be more inventory, there’s going to be more to look at. But the reality is when you have a buyer’s market, there is also the risk of falling prices. That presents the opportunity because you can buy things for cheaper, but it also presents risk. You don’t want to buy something that’s going to decline significantly in the future. And so I think the data suggests we’re entering a period that has a lot of upside and opportunity, but also has some risk. And so I would encourage rookie investors to be active in this type of market, but really just make sure to take some basic precautions. This isn’t crazy stuff, but some basic precautions to make sure that you’re buying the right type of deals in this buyer’s market.Dave, one follow-up question on that, because we hear buyer’s market, seller’s market, but how do we actually from a data perspective, define those two quote markets? What is the data you’re looking at to say, Hey, we’ve crossed over into what is now a buyer’s market?That’s a very good question. The simplest way to do it is you just evaluate the total number of sellers in the market and the total number of buyers, and it’s kind of a little counterintuitive, but if you have more sellers in the market than buyers, that’s considered a buyer’s market because a buyer’s market is referring to who has the power in the negotiation. And when there are more sellers than buyers, buyers have the power in the marketplace because I’m sure you all can imagine, but if there’s, let’s just say a million sellers out there and there’s only 500,000 buyers, those million sellers are going to have to compete for the buyer’s attention and dollars. And the way they compete is either by lowering prices or by offering concessions. And that gives buyers the power to negotiate. And so what we’ve seen recently is after years of having more buyers than sellers, that has flipped. There is actually a recent report from Redfin that shows that there are 500,000 more sellers than buyers in the market right now. And so that is a really big shift from where we’ve been over the last couple of years. I do think it’s important for people to know that that number of 500,000, it sounds like a lot, it’s actually if you go back pre pandemic, not that unusual. It’s kind of a normal amount, but it’s a very big difference from what’s been happening the last couple of years if you’ve been paying attention.Dave, one last follow up to that, and I appreciate that breakdown. Now, I think sellers is an easier number to gauge. As a rookie, you can just look how many homes are currently for sale, but how does one gauge the number of buyers in a market? It’s not like when I go into an agent’s office, I have to register. So how do we gauge number of buyers?There are a couple of different metrics that you can look at to sort of understand the balance between buyers and sellers. I think the two most useful ones are just something called inventory. There are different ways to track this, but when you see inventory go up, that just means properties are sitting on the market longer. It means there aren’t enough buyers to buy every property that gets listed. So inventory, it’s not going to tell you those exact numbers, like there are X number of sellers and y number of buyers, but it will tell you a little bit about the balance between buyers and sellers. And another similar measure would be days on market. These are things you could just look up. We have ’em on biggerpockets.com/markets or all these realtor, Zillow, Redfin, they all have this kind of data. You can look at how many days it takes for the average property to go under contract in your market, and the higher it is, the more of a buyer’ss market you’re in. Vice versa, if there’s very few days on market, you’re in a seller’s market and the sellers have all the power.So Dave, with there being more inventory, why are we still seeing that home prices have pretty much remained flat and that sellers really aren’t slashing and they’re holding prices? Do you think it’s just that they haven’t realized there’s a shift yet?Yeah, it is a good question because we are seeing just more and more inventory, but prices on a national basis are still going up year over year. And there’s two things. One is inventory can go up, these things can shift for two reasons. You could have more sellers, you can have fewer buyers. But the interesting thing that’s going on is that the amount of buyers has actually stayed pretty similar. People aren’t leaving the market even though there’s high interest rates. There’s all this talk of recession, there’s all these things going on in the economy. There are the same relatively similar amount of buyers right now than there were a year ago. The thing that’s happening is more sellers are putting their homes on the market, and so that’s sort of where this discrepancy comes from. But as Ashley you correctly pointed out, that doesn’t mean that sellers are necessarily going to accept a price less than they want.Some of ’em probably will, but not everyone is in a position where they have to sell. Some people might just be testing the market. Some people might be very patient, some people might just choose to take their property off if they’re not getting the amount of listing or interest that they want in their property. And so I do think there’s kind of a little bit of a stalemate going on. We see this because price drops are going up, and so there does seem to be a little bit of a discrepancy between what sellers are expecting right now and the reality of what buyers are willing to pay.Tony, in your opinion, what’s one tactic that rookie investors can do with this information if they’re looking at their market, things are sitting for a long time, buyers aren’t reducing the price, what’s one way they should go about trying to get these deals?It’s a great question, Ashley, and obviously we’re talking like macro here, but I still think at a very micro level, every seller has a slightly different situation and I still think that fundamentals are fundamentals and we should never assume what a seller’s situation or what their motivation is. So if you do see properties with super high days on market, I would really go after all of those listings. Who cares what it’s listed for? Lemme just get an offer out and either they’re going to reject it and say nothing. They’re going to reject encounter, or maybe they just accept because they’re so happy that they finally got an offer. But those are really the only three outcomes. So I think still leaning into underwriting where the deals make sense for you, increasing the volume of offers you’re getting out and seeing what happens from there. Do you have a different take hash or do you thinkNo, that’s great advice. I think just going to bigger deals and sorting the list of properties by days on market and then start at the end of the list, go to the very last page, say it’s paid in SH nine. You go there and you look and see what’s been on market the longest and start looking at those properties to see what’s available. But I agree, make those a low ball offers because someone like me, I have a property that’s been sitting for over a hundred days on market and I have not done a price reduction. I’ve gotten a couple offers, but I would take a low, listen, 139,000 and I would take 115,000 on it. And I’ve gotten offers around 80, 90. I have one lady right now that’s made an offer of one 15 and we’re waiting to see if she signs a contract and puts an official offer in other than just a verbal offer. And really there is no reason that I haven’t done a price reduction. My agent hasn’t recommended it. She says, you want to wait for that price, let’s just sit and wait. So I don’t know if she has a strategy behind it or what, but an example of someone who is waiting for a certain price, but it’s still a huge discount from what the asking price is of what I would take.That’s super interesting. That’s just such a great point. To Tony’s point, you never know you’re out there willing to take this decline. You’re not going to broadcast that. You’re not going to post that in your Zillow notes and the listing,Then I’ll be worried they’ll be making even lower offers.Exactly. It’s like when you post something on Facebook marketplace, they’re going to just offer you half of what you say, so you have to put it higher. So it’s the same thing. You can’t knowing people are going to negotiate, you have to do it. Hold your guns.I got to tell you guys a really funny sidebar here. I was shopping for an old basketball jersey at one of our local swap meets and the guy selling the jerseys had ’em on sale. It was like, I don’t know, two for 60. And I was trying to negotiate with him and we were going back and forth and I was like, well, what if I just take one? I was like, let me get one for 35. Remember he was initially offering two for 60 and he looks at me and he starts laughing and my wife was with me. She’s like, babe, you’re going the wrong way. So yeah, just be careful when you’re negotiating. You’re not negotiating yourself into a corner. It was a throwback Lakers jersey actually is what I ended up picking up.So what’d you end up buying it for? Did you get it?I talked him back down to his original price after I offered more. So that’s the worst negotiating tactic ever.Very clever negotiating tactic.Dave, I want to talk a little bit more about inventory. I saw a data point. We’re recording this in summer of 2025. I saw a data point that April of this same year inventory nationally was up I think 20% year over year with inventory being up 20%. Where are we at in the history of supply or where we’re at in terms of months of supply? Is this normal because things are obviously super constrained coming out of COVID. Are we getting back to our normal state or are we kind of in a danger zone right now?Oh no. I think, well, I guess you could say there’s a little bit of both. We’re going back to normal. If you just look at the total number of inventory, which again, just the amount of homes that are for sale at any given time in April of 2025, it was like 1.34 million. So just to give you, I’m looking this up. I do not memorize these things even though people think I do. If I look at April, 2019, it was 1.6 million, so we’re still 250,000, what is that? Like 15% lower than we were back then? And so I think that’s important to remember, but I do think there is some risk in the fact that it’s going up rapidly. And I also believe that because we’re in a period now of lower affordability that we might not get back to that level anytime soon of pre COVID levels.We might not necessarily get back to historic averages. And I think that’s just an unfortunate reality of us being in a much less affordable housing market than we were in 2019. And so I do think there are ways, and I’ll just tell you, I do think prices on a national basis will probably fall a little bit by the end of the year. So I do think you will see prices fall even though we probably, we might not necessarily get back to that 20 18, 20 19 level of inventory. That said, I am not like a crash person. I don’t think we’re going to see double digit price declines, but I do think we’ll see what is sort of a normal correction as part of a real estate and business cycle.So for real, managing tenants can feel like a lot of work, but they don’t have to be. For me, it all changed when I found Turbo Tenant. They’re a free software that makes managing rentals super easy. I used to waste so much time on paperwork chasing down rent, but now with Turbo Tenant, I have everything in one place. They even have state specific leases, digital condition reports, and a simple way to schedule showings without all of the back and forth. Their automated rent collection saves me hours every month and their maintenance management keeps me organized. Everything’s in one place on your phone so you can be a landlord from anywhere. I’m actually good at managing rentals now, not just finding deals. Check it out at turbo tenant.com/biggerpockets and create your free account today.So Dave, we’ve talked a lot about what’s happening in the market, but what about how to make sense of it as a rookie investor? Let’s shift gears into how investors can develop a data lens like yours. This can be overwhelming for a rookie hearing all of this information, this market data, what should they actually be paying attention to? What are the things they shouldn’t ignore?So I think if you really want to get the big picture, there are just a couple of buckets that I would try and understand. First and foremost is which direction prices and inventory are going in your market? Just like we were talking about before the break, if inventory is going up, that means there is a risk of price declines. That doesn’t mean you can’t invest, but these are the things that can help you formulate your strategy. Like Tony said earlier, if inventory is going up, this just means it’s a market where you can negotiate and offer under asking price. Whereas if it’s sort of the opposite scenario, inventory is falling sellers of all the power, you’re going to have to bid aggressively and wave your contingencies, sort of all the crazy stuff that we saw going on during the pandemic. And so it’s not, this data doesn’t tell you whether or not to invest.I really sort of recommend people not try and time the market in that way, but you should use it to inform how you’re going to offer and how you’re going to invest the type of strategies. So just which way these inventory numbers are really important. And then trying to understand just some basic things about your market, which are, if you really want to boil it down to one or two things, I would look at demographic trends. So is the population growing? If you want a little bit of extra credit, look up something called household formation. It’s like, but it’s a little more relevant to housing and see where that’s going. And then just look at job creation. Job creation from my analysis and work over a lot of years at BiggerPockets, I think boils down to the main thing that can help predict where rents and prices are going to go. And so if you really just, you can look this up, you can Google it, it’s all free or ask chat GPT, which direction or what kind of jobs and what the labor situation in your market is. There’s obviously a lot more to it, but those are the two main things I would focus on as a rookie.Dave, I want to talk a little bit about how you personally would look at a market or a sub-market, but before I do, I guess just one follow-up question. I love the idea of focusing on population growth or household formation. How much weight should a rookie give to national headlines? What you see when you open up whatever new site you go to versus local headlines? How much weight do you give to each of those as you’re evaluating different cities?Oh, if you’re an investor just looking to make a deal, I’d do like 95% your local market and 5% national. I think there are some national things that matter. I probably tend to focus way too much on what’s going on in the bond market because I’m weird and I care about these things, but if you’re just trying to buy your first or second deal, just focus on the fundamentals of your own market, you’ll be fine. You don’t need to understand what’s going on. A national trend, I invest in quite a few different markets and what’s happening in one right now is totally different than what’s happening in another. I live in Seattle, I just bought a house. I got it for probably 10% lower than what it would’ve been sold for three months ago. I’m selling a property in the Midwest for significantly more than I bought it for just a year and a half ago. So there’s just all sorts of things going on and you really just need to know what’s going on in the market you’re operating in.So I guess drilling down a little bit more, Dave, on what you specifically would look at if you’re evaluating a market for its potential for rental real estate investing, you talked about job creation, household formation, are there any other key things you’re going to focus on to say either yes, this makes sense or no, this city doesn’t make sense?Yeah, again, all things being equal, I think most people probably just want to invest in their own backyard. Similar to what I was saying about maybe prices are going down, you could still invest, you just need to adjust. In most markets, you can find something that works, it just might not be aligned with your strategy. So if you live in an expensive market like I do and you want cashflow, you might need to look elsewhere. At least if you want to scale, you might be able to find a deal here and there, but it’s going to be harder. This is kind of what I do. I invest in certain markets for appreciation. I invest in other markets for cash flow. So I just want to caveat that. So when you’re looking at each individual market, you certainly need to understand what you’re trying to accomplish.And if you’re looking for appreciation, the job growth is super important. I think the nerdy thing a lot of people overlook is sort of the supply side of things. So basic econ prices come down to supply and demand. We all want to talk about population growth and people moving there and all that is demand. But as we’ve seen over recent years, one of the main things that impact housing prices and as an investor, we want those to go up steadily, is just how much building there is in certain areas. Actually, there’s a guy, he’s the chief economist at Zillow’s, name is Orfe dung guy. He’s been on the market a few times. He just put on this really cool economic study. I think it’s cool, no one else does, but it’s basically showing that housing prices are directly related in a statistical way to how little or much construction there’s been over the last couple of years.And so that’s something to look into in your market. I invest in Denver, it’s been so overbuilt. Prices have been flat or falling for two or three years and that’s probably not going to get cleaned out for another year or two. And so that’s something I think has also really varies a lot from market to market. So in the Midwest and the Northeast, there’s not a lot of building and I think that’s a good reason why those markets have stayed really strong and probably will and some of the markets in the south and the southeast and the Sunbelt just got so popular that developers overdid it and that’s sort of negatively impacting not just home prices but rent prices as well. And so that’s something 10 years ago I don’t think you would’ve needed to worry about, but in this kind of market it is something you might want to look intoDave, along those lines of finding information in your market. One of my favorite resources is subscribing to, it’s called the Buffalo Business first, and I think they have business first newspapers all over, but in your market, if you can find those local newspapers that cover a lot of the business, they have a real estate section, it gives you a lot of information of what’s happening in that market specifically, and you don’t have to get the physical newspaper. You can subscribe to the online edition too. But Dave, what are some other resources that rookie investors can use without paying thousands and thousands of dollars for actual data to get information about their market?I love that one. That is one of my favorite tips is local newspapers. Some of them are free. I do pay for some of them in markets that I go to, it’s like $5 a month and it is worth it if you’re going to try and scale in a city to understand where businesses are investing. Sometimes businesses are closing. Sometimes you hear just about takeovers or all sorts of interesting stuff that I’m going to guess 95% of investors probably don’t really look at this kind of stuff. So it’s just a way to get an advantage over other people who might not be paying as close attention. One of the things I also love, and this sounds sort of archaic, but it’s just paying attention to what the government is doing. In a lot of cities you can sign up for notices by the housing commission or the planning commission or just knowing where the government is spending money in a particular area.A lot of local governments spend a good amount of their resources trying to stimulate the economy, trying to attract businesses to the area, subsidizing housing or building and these kinds of things can help you as an investor. So I really like that too. There’s also local chamber of commerce kind of things or just additional things that are completely free. It’ll probably take you one hour a month to read this maybe less and it gives you a lot of insights. But if you’re just looking for the standard data I was just talking about, we have that on BiggerPockets or you can really use any sort of listing platform you like. There’s also a website called Fred I really like. It’s just aggregates data free data and it’s free for you to use. So it’s just the Federal Reserve Bank of St. Louis puts that out and it’s a really good data sourceFor the town and the city. I always go to their local website and you can find their planning board meeting minutes and I can’t even tell you how many I have read to figure out, okay, where are they at with their short-term rental laws? Is something happening and you can get a glimpse, are they talking about it if they are going to do any kind of new development, that’s where you go first is you go to the planning board to present your plans to see if it even gets approved and you can find out a lot of this information before it’s even announced or they have a sign staked into the ground coming soon. So I think that’s really great advice is scouring those city and the local town websites to find that information.I actually got a deal, just like what you’re talking about in Denver, they were planning this park and this railway and they hadn’t announced exactly where it was going to be yet. They had two different designs that they put up on their website and I think every investor was waiting. It was my agent’s idea. He was like, let’s just go literally measure the different areas and figure out where would be a good house to buy. Would they pick either one? And we actually found one and bought it before they announced it and actually worked out really well. And now I’m one house away from this amazing park that they built because we just were a little bit creative and paid attention to what was going on.That’s such a cool story, a good example.And then they were actually eminent domaining a few houses for this. I was like, you better measured, right? Because they were coming with this spray paint and I was like, this better be right. And he was right. It was one house off.Two other resources too to find information is a investor and neighborhood scout. There are two other websites where you can pull neighborhood and local information to and data.Dave, one last question from you on the data side because obviously you’re a wealth of knowledge and you’ve done a really good job of being able to go through a large amount of data and just like to distill it down into things you can actually action. I think where most rookies get stuck is not an access to the data, but it’s in the analysis paralysis that comes along with having access to so much data. So as a rookie investor, how do I tow that line of getting the information versus acting on that information? How do I make sure that I just don’t get stuck in data aggregation mode, but that I actually get to the point where I can make a decision on the data that I’ve gathered?Yeah, that’s a great question. I think that the main thing people need to do is just pick a market and settle on it and not think too hard about it and obsess about it. I know that I am at fault for these because I put out lists and I talk about different markets, but I think you both correct me if I’m wrong. I think you’d probably agree that if you’re picking a solid market, it’s going to come down to execution, whether you do well or not. One market being superior to the other one, what my rankings and all this stuff that all the data shows you potential, it doesn’t actually show you what you’re going to get in terms of a return. And so as long as the potential is there, focus on execution. That is true of every business I think and real estate is true there as well.And so don’t obsess about it. Find a market that has positive population growth, good job growth and a price point that you can afford. And if it’s cashflow or appreciation, kind of a question. And then really just focus on the specifics of the deal. And I know people get really caught up in deal analysis. The recommendation I make, I think we’ve all said this, I’m sure you guys have too, but it just comes down to doing enough analysis to be able to spot the outlier. So if you just analyze one deal, it’s almost impossible to say if it’s a good deal or not. You have no frame of reference, but if you did 10, you could start to see that one might be a little better and one might be awful. If you do 50, you’re going to really start to be able to see which deals are better than the other ones.And I keep spreadsheets all the time of deals that I’m analyzing. Even when I’m not looking to buy deals, I still analyze deals and I just save them by month. I’ll be like, these are all the deals I did April of 2025. These are all the deals I looked at in May, 2025, even though the last couple months I’ve been pretty busy, I wasn’t planning to really buy anything, but now I am starting this summer to start looking at more deals. And I have this frame of reference in my head that’s like, okay, the average deal in this market is like a 4% cash on cash return. I’m paying 200 grand a unit. Now if I go out there and I say, Hey, I’m paying 200 grand a unit and I got a 6% cash on cash return on this one, I know that that’s a good one to buy.And so I think that frame of reference really helps rather than comparing it to every other option out there, narrow down to the options that are realistic for you. These 50 deals are potential things you can buy. And of those 50, which one’s the best? And to me that might be overly simplistic, but I sort of subscribe to the belief of dollar cost averaging and just buying consistently even if the market is up or down. And so kind of doing that, I still want to buy the best possible deal at that moment in time and this kind of approach at least allows me to do that.And now with bigger deals, you really don’t have to spend a lot of time analyzing deals. You literally could go through and look at what they are and convert it right into your BiggerPockets calculator report and then save all those reports and go back and reference them.Exactly. Yeah, that makes it so much easier to just get this benchmark that’s going to, I think really help people do less of this over analysis and can just really focus on, here are my options. Here’s the best one for me,Tony. What we have to do for a future episode is pull some of those reports that we did years ago and what 2017 when we joined BiggerPockets and go through and analyze it and say, okay, should we have bought this deal? What would this deal look like now? Or how bad did we analyze this deal? So we should definitely do it. I like that. Going into the archives,I can tell you right now one deal that didn’t work out was the second deal I bought in Shreveport, Louisiana that cost me $30,000. So we want your opinion, how can we take this data and answer the question, what investing strategy should rookies actually focus on in today’s market? And we’ll get an answer from you on that question right after a quick break. Alright Dave, so we’ve got the market picture and now we’ve got the tools to track and understand it, but let’s bring this all together. What should rookies be doing with this information? Given all the trends that we’ve talked about in your professional opinion, what types of investing strategies do you think are best suited for 2025 conditions?I love this question. Everyone calls strategy something different. For me, I prefer the strategy and for rookies what I would recommend is I guess one of two different strategies. Generally speaking, I think buy and hold is just the right move, right? This is what works well in good markets, in bad markets. If you’re investing for the long run, which you should be, real estate is not a get rich quick kind of thing, then buy and hold is the right move. And I personally, I honestly am indifferent to whether you long-term rent it, short-term, rent it or midterm rent it. I think those are kind of tactics that you can use within this strategy of I’m going to buy great assets and hold onto them for as long as I can. And if one rental strategy works better for you, go for it. If in your market, short-term rentals is the best way to do it, do it.If midterm rentals great, I am sort of indifferent to those things. So I just think real estate over time, prices go up, the debt works. There’s so many reasons you guys talk about on the show all the time. So buying and holding is great and I think we can get more into that. The second bucket is just owner occupied strategies. House hacking I think is always a great idea, but as Ashley and I talked about on the other show recently, we’re both dabbling. You’re doing it, I’m about to start a live and flip. I just think these are really good low risk ways to get started in real estate investing. And although it’s called a live and flip and flipping sounds scary and risky doing it in this owner occupied strategy way, I’ve sort of just had an epiphany recently that this is just a very good risk adjusted way to earn returns, especially for new people.And what’s the worst case scenario? You have to live in the house longer. You’re usually making the house pretty nice if that’s your worst case scenario is you have to live in the house longer, that’s not that bad. So say you go to sell it and it’s not going to sell for what you want, the market has shifted. Okay, well then you hold onto it longer. And I think a big part of that is purchasing within your means, making sure that it’s a house you can afford and not banking on selling it on when that 24 month mark hits. So yeah, I totally agree and I’ve been thinking about it more and more after our conversation as to even more just the benefits of it and how there’s not a lot of risk that can actually have bad things that can happen. The worst case scenario is pretty much other people’s, every day you are stuck in a house.It takes, the big risk to me in flipping is market timing, right? You need to do the renovation really quickly and you need it to sell it at a good time. If the market tanks in the six to nine months that you’re holding this property, that’s the risk. But property prices recover. And so if you’re living in a house that really gives you the opportunity to time your exit really well and it takes the pressure off knee off to having to renovate in six months. So I think these things are really interesting. I will say I’ve been investing for 15 years, but I am a renovation rookie for sure. I’ve done them, but I haven’t done big full scale down to the studs kind of renovations before. And so I might regret what I’m saying. So take this all with a grain of salt.Everybody that’s watching on YouTube, I need you to comment below renovation rookie, and we’re going to get Dave to do a YouTube series of him going through this renovation process will be mandatory to wear a hard hat and your tool belt and we’ll send you some tools.I’ll go on Amazon to buy construction worker Halloween costume and wear it aroundAnd it’ll end up being a little kid set costume.Yes, exactly. So we’ll see. But I do think that the numbers really make sense and the lifestyle thing makes sense to me too, which is super important too. It just fits into what I want for my lifestyle. So that’s great.And Dave, that was my next question is if you were starting over, you’ve been doing this or you said 15 years, but if you were starting over today as a rookie, what strategy would you focus on? And it sounds like at least for where you’re at in your life, the live and flip makes sense. So I guess let me ask both of you guys, because Ashley, I know you’re going down this path as well, but when we think about a typical renovation, it’s, hey, I’m going to go out there and maybe get hard money or private money to buy this flip. Maybe I’m cash flowing some of the renovations or my portion of the down payment. But when you’re doing a live and flip, what kind of financing options did both of you choose? Did you choose traditional primary residence funding or did you go more so the traditional flipping route funding? And Dave, we can start with you.Yeah, I actually wound up doing traditional loan, a conventional mortgage, and that’s because I picked a property that is move-in ready. It does need some love. It is definitely dated, but my wife and I are actually moving in tomorrow and it’s totally livable. The bathrooms work, the kitchen works, and so I was able to get a conventional loan on that for people listening, if you buy something that’s super distressed, you might not be able to go this route. And we deliberately targeted something that was going to be livable. We don’t want to be max inconvenient to ourselves and just move it to a place where there’s no shower. So for us that was important. But I actually did something I haven’t done before, which I got an adjustable rate mortgage because I do intend to refinance this not relatively quickly because after I do all the renovations, I’m either going to sell it or if we live there I will refinance it. So I am giving myself that option. And the adjustable rate mortgage was a good 1% lower than a 30 year fixed rate mortgage. So that will save me a couple hundred bucks every month while I’m doing this. And I know people have different opinions about adjustable rate mortgages, but I think for this kind of situation it actually makes sense. And so that’s how I did it.Dave, I appreciate you sharing that. How long is your rate locked in for before it adjusts? I know you said it was a point lower, but ballpark, what was the interest rate on it?Yeah, it’s a seven year arm, so I’ve seven years to refinance it, which is plenty in my opinion. And then it adjusts every six months after that. So that’s called the seven six arm. Well, I’ll just tell you I got a very good rate. It’s 5.2%, but part of that I got a half point discount because this is actually a good tip for anyone who invests in the stock market. Certain stock brokers will offer you mortgages if you have your stock portfolio with them. So I did mine through Charles Schwab and they gave me a half point discount. I think they’re more motivated these days because mortgage volume is low and so I got a half point discount. So if I didn’t have that relationship, it would’ve been like 5.75, which is still really good. And so I was able to get it to 5.25. I was shocked. I underwrote this at six and a half. So when I got that, I was delightfully surprised.So you go with the arm for the financing and what’s your game plan for the actual renovation? Did you get any of that covered with the mortgage or are you just going to cashflow those renovations over the next 12 to 24 months?Yeah, I’ve been doing this long enough, so I’m and fortunate financial position, so I’m going to just pay for that in cash. And that’s why if I wind up staying there, I’ll refinance because I’ll want to pull that cash back out. But so I’m going to just finance it again. I just want to have my holding costs be as low as possible. And if I was getting either hard money or private loans or trying to finance this, it would just increase my holding costs and that’s not the strategy for this deal.Last question for you on this one, Dave. Do you think you’ll be able to force equity or I guess enough equity to get to that refinance on the backend, you feel what you bought it for and where the market’s moving? You’ll have that room there.So I think the difference between what I bought it for and the A RV is probably somewhere around 400 and 450,000. That’s kind of conservative, maybe up to 500. Yeah. Well, I live in Seattle, so prices are very expensive here and I think it’ll cost me like 2 25 to renovate ish. That’s my estimate that James Dard gave me. And he knows stuff, so I’m trusting him.Okay. Dave, before we wrap up here, what is the mindset that rookies should really adopt when entering this new normal market instead of the hype market that we’ve had the last several years?I think the mindset is not to compare potential returns to historical returns and instead to focus on what is the best thing to do with your money today. I understand it. It is tempting to say, Hey, if you invested in 2015, you could have gotten an 8% cash on cash return and things would’ve been cheaper. And that is appealing. It’s great. I’m sorry to say that’s just not available anymore. And so you need to think about you have X amount of dollars. Is real estate, the best place to put it is a savings account. The best place to put it is the stock market. The best place to put it. For me, I invest primarily in real estate. I invest in those other things too. I hold cash, I have stock investments, but for me, I keep about two thirds of my net worth in real estate.And I’m going to continue to do that. And I just look for the best deals possible today because even though a deal that I buy right now may not be the grand slam I hit in 2014, but it’s still better in my opinion than any other option than I have for my money and is the best thing to move me forward towards financial freedom. And I know that’s sometimes hard for people to wrap their head around, but that’s just the reality of being an investor, right? You need to just decide where to allocate your resources. And to me, it’s still predominantly real estate and everyone needs to make that decision for themselves. But I’m guessing if you listen to the show, you already have an inkling that real estate might be right for you. And just to adopt that mindset, is this deal better than putting in the stock market? Is it better than putting in a savings account? If yes, move forward. Like take control, start pursuing financial freedom. That’s kind of the mindset I’ve adopted and I guess it’s working for me, so maybe it’ll work for you.Well, Dave, thank you so much for joining us today on the Real Estate Rookie Podcast. Can you let everyone know where they can find out more information about you?Yeah, you can find me on the BiggerPockets podcast or on the market podcast. I’m on BiggerPockets all the time, or I’m on Instagram where I’m at the data deli.Oh yeah, I saw big controversy today on your Instagram. Dave posted about a really hot topic today that probably going to bring out some haters.Yes, this is my wife’s idea. Have you seen those trends where it’s like propaganda, I’m not falling for my wife was makes fun of me. If I order a sandwich and it comes out as an open face sandwich, I get so mad. Nothing makes me more mad. It’s false advertising. I want a refund if you only bring me one slice of bread. And so I just was starting that up. Now, people inevitably get this conversation. It’s like, is a hot dog a sandwich? Is a taco a sandwich? I have very strong opinions about this, so if you want to argue with me, go check out my Instagram.I have to say, you did definitely post the most controversial picture because it looks so good that who cares if it’s on one slice of bread. Well, Dave, thank you so much for joining us today. I’m Ashley. He’s Tony, and we’ll see you guys on the next episode of Real Estate Ricky.