He Was Right in 2000, 2008, and 2020: Now He’s Saying to Buy

Brian BurkeThe housing market is stalled out. Prices and mortgage rates are flat. Nobody seems to want to buy, but maybe you should. There are always good deals available for people willing to do the work. When it’s easy, anyone can find those properties and grow their portfolio when it’s harder. Like right now, there’s less competition, but even more opportunity. Today we’re talking about how to identify those opportunities, grow your portfolio and advance towards financial freedom even in a slower housing market. Hey everyone. I’m Dave Meyer, housing analyst and head of Real Estate Investing at BiggerPockets. Our guest on the show today backed by Popular Demand is Investor and BiggerPockets author Brian Berg. Brian is going to share his views on where we stand today in the real estate market cycle and whether home prices are likely to rise in the near future. We’ll talk about what types of properties and investing approaches represent the best deals in this environment, and Brian will tell us how property he bought opportunistically a couple of decades ago and just held onto is now paying for his vacation home in Maui. Brian is one of the most successful investors we have on the show. He has a proven track record of understanding market cycles, so this conversation is full of valuable insights. Let’s bring ’em on. Brian Burke, welcome back to the podcast. Thanks for being here.It’s great to be back. Dave,For our audience who hasn’t heard your many appearances on this podcast, can you just tell us a little bit about yourself and your track record as a real estate investor?Yeah, well, I’ve been investing now for 36 years in real estate. Started out in single family homes as a house flipper pretty much like everybody else. Grew up into the big leagues and small multifamily, which was big leagues to me at the time, and then eventually grew up into larger multifamily. In my 36 year career, I’ve bought what about 750 houses, about 4,000 apartment units, a billion dollars worth of real estate. I just crossed that milestone here last month.Wow.And a couple things I’m most proud of is in all the years I’ve been doing this, I’ve never lost investor money, and second is I’ve managed to dodge and navigate market cycles fairly successfully. I think having sold three quarters of my multifamily portfolio right before it tanked here in 2020 via two and similarly avoided the worst of the great financial collapse and yet still took advantage of the run up. So I think my track record is one that I’ve been able to read markets at least. Okay,So share with us, Brian, tell us what you’re thinking broadly where we are in the cycle. Of course there are different ones for commercial and residential real estate. Maybe give us an overview of where you see residential real estate right now.Yeah, you’re right about that, Dave. There’s a lot of different cycles in real estate. I think residential real estate is in kind of this odd phase of a cycle where there’s a bit of a standoff between people who own homes with 2.75% mortgages who refuse to move because they’re locked in, and buyers who are trying to figure out how they’re going to be able to buy with 5%, five and a half percent mortgage rates, even 6% mortgage rates, so single family, I think it’s in a phase of a cycle where if you’re a long-term holder buyer, this might be a really good time to start making some moves and accumulating a portfolio without having to fiercely bid against everybody under the sun to find reasonably priced real estate that you can hold for a long period of time and use somewhat of a retirement vehicle.I agree. We’re in this very strange market that feels quite flat to me and sort of just neutral in every way. When I look at the data, and of course things can change to me it feels like this might last a while though it might not just be a moment in time where things are flat. I kind of see this dragging out a little bit. Do you see it differently?Everybody’s waiting for something to happen, right? Your sellers are waiting for better interest rates before they’ll go on the market and buy another house with a new loan at a higher rate. Buyers are waiting for lower interest rates. Buyers are waiting for better prices, like lower sellers are waiting for better prices, meaning higher. Nobody really wants to do anything, and when you get something that’s in kind of a state of equilibrium, it’s like a nice glassy lake. When there’s no wind, there’s no ripples on the water, something has to get thrown in the water, Augusta wind has to come along, something has to happen to make the water choppy, and right now there’s just nothing like that happening in the residential real estate space that I can see.Me neither. And although that could change maybe the labor market if unemployment really gets bad, but there’s no signs that it’s really heading to a catastrophe yet, it’s probably going to weaken a little bit. Personally, I don’t think mortgage rates are going to move much in any direction because if you extrapolate this out, nothing’s really moving the bond market either something needs to get tossed in there for the mortgage rates to move, and frankly, I just think that we’re in a stalemate there too. If you sort of think about how mortgage rates are created, we have bond investors, half of them are very fearful of a recession, half of them are very fearful of inflation, and until something gives there mortgage rates probably aren’t going to move in either direction either.Yeah, this time reminds me a lot of 19 93, 94. During that period around 1990, home prices fell just a little bit, 10 or 15%, and then they just didn’t move until 1997. So from 93 to 97, there was this long stretch of time when real estate just did absolutely nothing, and it was a great time to accumulate a portfolio even though it didn’t feel like it, because at the time you’re like, well, the values aren’t going anywhere, but by 99, prices were clearly on the rise, and by the mid two thousands we all saw that bubble and what ended up happening there. But even after all that played out, prices now are much higher than they were in the nineties. So if you bought, then you look really smart, but this is just another one of those periods and you can have these long stretches where nothing really happens that’s normal.We’ve actually seen real home prices stall out for, I think it’s like 38 months now, three ish years, and I do think that can continue. You mentioned, Brian, that this is a good time potentially if you’re doing it right to accumulate a portfolio. Do you have any advice for the audience on how to go about targeting specific types of properties in this kind of stalled market?I think going to the old route of contacting brokers and looking at what’s listed and just looking for stuff that has some kind of a problem that you can solve is going to get you a better deal. I mean, there’s a lot of old housing stock, a lot of houses built in the seventies, eighties, even nineties that’s in need of remodel. Rehab roofs, landscaping fences, all that kind of stuff. And you can buy those properties at a little bit of a discount because they need that work and you can fix ’em up and rent ’em out for higher rent than you could have in their present condition. And that’s the old school tried and true mom and pop style real estate investing that’s been around for decades or centuries.Centuries. It is, yeah. We were talking about this at Epco, it’s like real estate investing. We went through this period where it was incredibly easy in 20 13, 20 22 is hard to miss, but you don’t need perfect conditions to be a successful investor. Literally, people have been making profits off real estate for centuries, like you said, in these very normal conditions, but you sort of have to adjust your expectations. The market is probably not going to give you these tailwinds that you got the last couple of years where even if you didn’t run a project super efficiently or you didn’t buy the exact right property, you could count on four or 5% real gains every year for a couple of years. We’re probably not going to see that. And so as Brian said, you’re going to have to work for that a little bit. That’s either by renovating, maybe doing the work in terms of going off market and finding a particularly good deal, adding capacity in the form of Aus or a second unit on top of things, buying into a great location. These are the kinds of things that you can work for and will make real estate investing still profitable for you, but it’s a little bit different from when you could just throw your line in the water and for the tide to push up values forYou. Yeah, I think the difference is is that yesteryear, let’s call that over the last skip the last couple years, but the last five to seven years before that, investing was hard, but results were easy and now it’s the other way around where investing is easy, but results are hard. So it’s just kind of a different way that you have to approach what you’re doing and think about, okay, I don’t have to bid against everyone to buy this property, but once I buy it, I’m going to have to work a little harder to get the outcomes that I was seeking. Whereas before, boy, you’d spend all your time trying to find a deal to acquire and making offers and all this other stuff to get almost nowhere. Then you finally strike something and once you struck it, it’s like you could do absolutely nothing and you’re going to make a ton of money. So it’s a different season and things happen differently in this season than it did in the last season.I’ve been encouraged. I just see better and better deals coming on the market all the time right now, and I mostly look at MLS deals and the ability to buy cash flow, the ability to stabilize rents and generate solid cash on cash returns is better than I’ve seen since probably 2019, I’d say at least. And I do think it’s going to continue heading in that direction. And so for investors, it’s an opportunity to be patient and to wait and walk away from deals, whereas like you said in 2022, if you had something that felt sort of borderline, you might push it a little bit like, Hey, if I just get in the market right now, it’s probably going to do okay. Whereas right now, I think you have to kind of take the opposite approach. Be patient, wait, it’s hard for sellers, but if you are a buyer, take your time finding great assets because as Brian said, it’s going to take some work, but the results will come if you sort of leverage what the market is giving you right now.Well, I think it’s important to think different too. And so here’s my approach to investing in stocks. I’ll buy shares of a stock and my hope is that the shares go down and you think, well, why on earth would you want that? And it’s because then I can buy more shares and as the price keeps going down, I can keep buying more shares. Now obviously I don’t want this to happen in perpetuity. I want it to happen for some reasonable span of time where I can collect and accumulate a portfolio and I’d look at real estate, especially if you’re getting started in real estate investing. Look at this the same way where you want the market to stay flat for a little while if you’re just beginning to accumulate a portfolio, because the longer it stays like that, the more of a portfolio you can accumulate and position yourself for when the market does make a move because it will make a move and it’s more likely than not that move will be to the upside. And even if it does make a move to the downside and you get the opportunity to collect even more assets at even lower prices, it’s going to move back in a favorable direction at some point, and you’re going to be really glad that you did that.I sort of agree with you about that approach. The better basis, you can come in at the lower the price you can enter in if you believe long-term that prices are going to go up, that is absolutely the approach to do is to keep accumulating even if prices are falling.I would agree with that, the whole idea, right? You want to build a base of assets and then let that asset base grow over time. Real estate, even though it’s sometimes been called a wealth strategy or a get rich, some people think of a get rich quick strategy. It’s not a get rich quick strategy. It is a get rich slow strategy. The idea is you accumulate a base of assets, you wait for market movements, those assets go up in value, and then you have a variety of strategies you can deploy to take advantage of that. But this is a retirement strategy more than anything else, and that’s one of the primary reasons I got driven into real estate early on in my career is I felt like by the time I’m old enough to collect social security, it’s going to be bankrupt. No one in my family has a dime that I’m going to inherit, so what am I going to do to build myself up for a very secure retirement? And real estate is exactly that.Real estate investing, the whole point of being in this industry and putting your time and effort and money into it is you have a very high probability 10, 15, 20 years from now for being financially independent. And that’s not even doing anything fancy. That’s not even doing anything crazy that’s doing exactly what Brian said. You buy assets, you get into the market, no one really knows, maybe other than you Brian, but no one really knows when we’re going to see these pops of real gains, right? They happen every couple of years, but it’s pretty hard to know. I don’t think a lot of people saw the COVID pop coming, for example, but you had to be in the market. And so if you can buy assets that are good and stabilize and can sustain themselves and still provide a solid return during these flat markets, then you have the ability to take advantage of those pops when they do eventually come. And if you got two or three of those pops over your career, you’re probably going to be fine. They can be real wealth accelerators. You just can’t force them to happen.And it works a lot better if you’ve already accumulated the assets before the pop, because what a lot of people do is they think that the pop is the time to buy. And that’s what kind of creates the pop and makes it a self-fulfilling prophecy is everybody starts going all in at the exact wrong time, which is if you need the cash, that’s the time to be a seller more than it is to be a buyer. But the pop, as you said, you can’t predict when it’s going to arrive, so don’t try to time your entry point right before the pop accumulate your assets, wait for the pop. Then when the pop happens, that’s your payoff.It is. Well, I think you’ve given our audience here today, Brian, a very good framework and way of thinking about investing right now. So thank you at least on the residential side. But I do want to turn our conversation to multifamily because earlier in the year you said you thought there was a sweet spot with certain parts of multifamily, other parts of multifamily, not yet time to buy. I’d love to get your updated take on that, but we have to take a quick break. We’ll be right back. They say real estate investing is passive income, but if you’ve spent a Sunday night buried in spreadsheets, you know better. We hear it from investors all the time, spending hours every month sorting through receipts and bank transactions, trying to guess if you’re making any money. And when tax season hits, it’s like trying to solve a Rubik’s cube blindfolded. That’s where baseline comes in. BiggerPockets official banking platform. It tags every rent, payment and expense to the right property and schedule E category as you bank. So you get tax ready financial reports in real time, not at the end of the year. 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Welcome back to the BiggerPockets podcast here with Brian Burke, spent the first half of the show talking a lot about the residential market, but Brian, maybe you can give us an update on how you’re feeling about the multifamily market.Well, I’ve been on this show quite a few times, really sacking on the multifamily market the last couple of years, haven’t I? Dave?Yes. I mean, I love your brutal honesty about it. You are, or at least a large part of your career has been as a multifamily operator, you raised money in this space and I love your brutal honesty about how rough it’s been.Yeah, I’ve raised at least 400 million for acquiring multifamily properties in my career, and I’ve been in multifamily for over two decades, so I’ve got a little bit of experience I can draw from, and I just think that it really depends, I think on what your goals and objectives are. So there’s a difference in my thoughts on multifamily, and the difference isn’t as much about the real estate as it is about you, the listener.
I probably need to expand on that. Going back to our discussion on single family and accumulating assets and a retirement plan and all that kind of stuff. Multifamily is really an extension of any other real estate investment objective, right? It’s just a way of getting larger economies of scale and accumulating more assets like you do in Monopoly. And if that’s your goal, then I think acquiring multifamily right now is a great strategy. The prices have come down considerably from where they were in 2021 and early 2022. The bottom fell out the market in the second quarter of 2022. I can almost time to the day when it happened. And values are down in some cases as much as 50%. And that may seem like dramatic, but it’s true. I’m actually seeing that. So if your goal is to do that retirement plan strategy and accumulating assets, this is a great time to be buying multifamily and it’s a great time to buy, especially kind of those mom and pop multifamilies, the five unit, the 10 unit, the 20 unit, maybe 30 or 40 even if you can swing it.
Those smaller multifamily assets oftentimes have owners who are just in all sorts of distress, all sorts of tired, all sorts of ready to retire and get out of the business. And there’s needles in haystacks out there that you can find that’ll be really good deals. You’re going to have to work for it and it’s going to take a lot of effort and you’re going to need to be patient. But I think you can find some real excellent opportunity and especially small multifamily right now. And I contrast that broadly to my thoughts about larger multifamily and other strategies, which I’m sure you’re probably going to ask me about before we finish up here today.I will. I just wanted for the audience, make sure everyone understands and make sure I understand the reason you’re drawing the difference there. One is just because the asset, but because people who buy large multifamily have a different business plan. It’s usually a syndicator who has to return capital to their investors and five to 10 years, or it’s institutional investors who have very different business models. So is that why you see the difference between small and big? Small might be an investor like me who’s just trying to retire off of this and hold onto this for decades, whereas the larger multifamily is usually trading every 5, 7, 10 years.Yeah, you nailed it. You nailed it in two ways. One is that yes, large multifamily is more of a business now. Most individual investors can’t afford to go buy a 400 unit apartment complex. Now, certainly there are some, but for most people buying a 400 unit apartment complex is a group sport that is a business much more so than it is an investment, so to speak. It’s more like a financial instrument or an investment in a mutual fund. And so the reason for the distinction is twofold. One is that when you look at where you are in the market cycle, if you want to be successful in that business, you have to generate a healthy return for investors. And I think because of where we sit in the market cycle, it’d be difficult to do that. And the second to your point, Dave, is that generally these assets get held for shorter spans of time, three to five years often is common in that business. And I don’t see a market recovery of meaningful nature in the next three years making those business plans just untenable at this point and just a little bit early. So I think that’s the distinction is one is a wealth collection strategy where you’re accumulating a base of assets for your long-term wealth, great time to buy contrasted to a business that’s in place to generate returns for investors in relatively short periods of time. It’s early.Thank you for making that distinction. Unfortunately for our audience, I think most of us fall into that first category. I’m sure there are a few people out there who are currently syndicating or aspire to become larger syndicators, but I think most of us are just looking for retirement. And so I’m glad and a little to hear you say that you think it’s a good time to buy. Is that just because values have fallen so much and have values fallen as much in that, let’s call it the five to twenty five, five to 40 unit kind of propertiesThey have. And I think where you find the most distressed pricing wise is in that workforce tier housing. If you go to that class C stuff, nobody wants that stuff right now. Literally, nobody’s buying your 1960s and 1970 C class product. So if you’re a young energetic investor with a lot of ambition and you need to kind of grow your asset base a lot because that’s what you do when you’re a younger investor is you’ve really got to get pops, then those properties with a lot of hair on it is a really good place to be right now. And there’s deals to be had because us older lazier investors don’t want to fool with it. So I think there’s a lot of opportunity there in thatSector. Yeah, I’m noticing it myself in the markets I operate in just more of that inventory coming online. And I’ve talked to a few sellers and it just seems that there’s also a lot of mom and pop landlords who don’t want to gear up for another market cycle. They have just enjoyed a very nice growth in appreciation. We had huge rent growth and now there’s a little less juice to squeeze without doing the heavy work like you talked about Brian, and maybe they’re just not in it. Maybe it is like we talked about a couple years until we see that big pop and they don’t want to wait. So they’re just saying, I’m going to sell right now. And so I do think the inventory is going to increase, which I’ve been surprised it’s taken this long, honestly, into the tightening cycle to wait for that inventory hasn’t come online, but I think that’s starting to change. So maybe tell us a little bit about if you’re interested in this, what would you target for a buy box right now, broadly speaking? I know it’s different in every market, but what are some things that you think our audience generally speaking should look at?My very first multifamily purchase was a 16 unit property that I bought in connection with doing a 10 31 exchange of a single family home and a condominium that I both had as rental properties that I acquired at foreclosure sales. And I did a 10 31, but the proceeds of my ten one weren’t enough for the entire down payment on the 16 unit building, but the tired, retiring landlord wanted out and he agreed to finance half of my down payment and give me a note for half of the down payment. So I ended up being able to come in with 10% down, 10% from the seller, 80% from a bank. And so for not a ton of money, I bought this 16 unit property and got my entry into multifamily. And I think that’s a great place to enter is in that space. Another example, I bought an 11 unit property in Buffalo, New York of all places. And the reason that I bought there was because it’s a sleepier market. It’s not where everybody’s looking. And I bought an 11 unit property there for like $300,000.Unreal.And the seller financed it. And so I came in with just a small amount of down payment, and then I did some small minor renovations, increased the rents, and that was 20 years ago, or maybe 19 years ago. Well, just last month I made my last mortgage payment.Oh, awesome. I was wondering if you held onto it because Buffalo has really popped,It really has popped. I mean, so the building now is worth three or four times what I paid for it.Amazing.But it’s throwing off $11,000 a month in rent and now there’s no mortgage. So when I talk about using small multifamily as a retirement plan, that is exhibit A of what that looks like. And another example, that 16 unit apartment building I bought, I owned it for almost 20 years when I sold it and did a 10 31 exchange into a oceanfront condominium in Maui, and now I live there. That’s awesome. You can have the vacation home of your dreams, you can have passive income and all that with just two simple multifamily purchases that were both made at low basis at times when the market wasn’t really all that greatUsingCreative financing and help from sellers and tired landlords and renovation strategies. And you can have a life, you can build a life that you never would’ve thought imaginable or that you couldn’t have done without having made those moves early on.I love that approach. Actually, I a, it’s a three unit in Denver, but they’re big units, so it probably already generates eight, $9,000 gross in rent right now. And a couple years ago I was thinking about selling it. I had to replumb the whole house. It’s like 1925 kind of thing. And I was like, you know what? I’m going to do it. I’m going to do all this work because in a couple of years that will be paid off. I’ve owned it for a long time, and nine, $10,000 a month in rent is a very, very significant portion of what I would need to retire that one three unit just from holding onto it, right? It’s like that’s all you need to do is pay off your mortgage over a long period of time and you’re going to be sitting pretty. So I really appreciate that perspective on it.
So Brian though, earlier this year you talked a little bit to me about eight to 25 units. I’ve been curious about them. I see good pricing on some of those, but I need to be honest with you, the reason I have been a little hesitant personally about pulling the trigger on them is that this approach of owning things 10, 20, 30 years and the debt that you have to get on those properties often, which are adjustable rate or have a balloon payment on them, sort of seem at odds to me. And I have a hard time squaring that where I’m like, I want to buy this property and just sit on it and not think about it, which is what I’ve done with my small, I have fixed rate debt on them. But how do you do this? How do you buy these 8, 10, 12, 20 units and have that kind of debt and still sit pretty or do you buy fixed rate debt on it? How do you approach that?Well, I’ve got good news for you. You can get fixed rate debt on that stuff. For example, the property I told you about in Buffalo, I just made my last mortgage payment when I first bought that property, I think the interest rate on it was like seven or 8%. It was pretty high, and it was with a local bank and it was a fixed interest rate. And then about, I don’t know, some number of years later, interest rates fell dramatically. And so I called the bank and I said, I’m thinking of refinancing this property because interest rates have fallen so much. And they’re like, well, before you do that, what if we’ll just agree to drop your rate by 2% and just you can sign one paper and you’re done. And I’m like, done. Okay. Yeah. So they send me the form, I signed it, I got my rate lowered by like 2%, but I said, I want you to keep a C hing the same mortgage payment that you’ve been doing all alongTo pay down the principle.Oh, yeah, it paid down the principle. So that loan, it was a 30 year fixed rate, fully amortizing loan, and I think I paid it off in 17 or 18 years. Awesome. And so you can do stuff like that today, it’s a little bit of a higher rate environment, so rates are maybe 6%, but in two years they might be five and you could refinance and even lower your payments or maybe convince your lender to lower the rate for you. So there is fixed debt out there for some of this smaller multi stuff. Now, the disadvantage is twofold. One is you’re going to have to personally guarantee the debt. You’re not going to find fully amortizing, non-recourse, fixed rate debt. Two, you might have a prepayment penalty, but if you’re going to hold it for the long-term, who cares,Right?Three, you’re going to have to look around for that money. And I think one of the best places to look is local community banks. And this is a source of debt that’s oftentimes overlooked in the multifamily space because people want to go Fannie Freddy debt funds, bridge loans, easier to get DSCR, all the people that are on the internet advertising you to loan you money, and they forget about the corner bank in town that’s lending to all the local bigwigs. Don’t forget about those guys. They have some great products that you should look at.And that’s one of the benefits of this market. Like we were talking about in 20 21, 20 22, you had to close quickly, so you’d have to go get the loan that you could acquire in a week. Now, if you’re considering buying a multifamily property, you can go shop around for a loan, you can look for these things. And I’m glad you said that because I have really been thinking about this. I’ve looked at a couple deals, I’ve just been so busy this summer, but I’m starting to look at a couple more right now. And that’s sort of where I landed on it, is that because my strategy is long-term retirement, and if I buy an eight unit of 15 unit, I’m going to want to hold onto it for 10 or 20 years. I am willing to pay a little bit higher interest rate right now. I’m willing to personally guarantee my loan.
I’m willing to do the work of shopping around to just have the sense of security that I know my mortgage payments aren’t going to change because I agree with you. I think the most likely course for mortgage rates in the next year or two is probably slightly down. But I think there’s a lot of big questions about where mortgage rates are going five years from now, 10 years from now, 15 years from now. It’s anyone’s guess, right? And I don’t want to leave my retirement plan that I’m buying now to hold onto for 20 years to chance, whereas I could see a huge increase in my payments when my debt resets in five to 10 years. So that’s the way I’m thinking about is go find these awesome assets I want to hold onto forever, but focus on fixed rate debt rather than trying to eek every dollar of cash flow out of it.
Because as we talked about, that’s the advantage I have and a lot of us have as individual investors. I don’t need to show my LPs that I’m getting this great term on my debt so that they’re getting the best possible cashflow. I’m willing to eat the cashflow because I still work. I don’t need the cashflow today. I want a situation where that cashflow is going to be there for me 10 years from now, and I’m willing to sacrifice, honestly, a pretty small sacrifice in terms of cashflow in the short term to have the sense of security that comes in the long term.Well, I think that’s smart. And again, this always, it depends on your individual circumstance and yours is a little bit different than maybe somebody else’s. But this goes back to when I told the bank Keep Aach Hing my original mortgage payment. I didn’t need the cashflow. I was earning cash from somewhere else. I want to pay this loan off. I refinanced most of my other small rental properties with 15 year loans because I don’t need the cashflow right now. And I wanted to have ’em paid off because my goal was to have this as a retirement vehicle that was always going to be there, even if everything else I did didn’t pan out. And fortunately things panned out pretty well, but had they not, I wanted this backup plan. But everybody’s circumstances is a little bit different. And when you’re in a position like you can say, Hey, I don’t want to take on a lot of risk. I’m going to go get fixed rate debt, which the downside is it means that you’re probably going to have to have a little bit larger downPayment.And so that’s another one of the trade-offs. Now, somebody else listening to this right now might go, well, that’s great, Dave, but I don’t have a 25% down payment for a 10 unit apartment building. So you have two choices. If this is your situation, you can go buy a four unit building and the down payment would be equivalent, or if you want it more scale, but are willing to take on more risk, there are ways that you can get in with a lower down payment. And case in point, I’ll go back to my Buffalo property again just because such a great example for so many things. But when I bought that property, the seller financed it for me. So number one, as you alluded to earlier, people want to get that financing that’s quick enough to close so the sellers aren’t patient enough to wait for a better loan to go through. Well, if the seller’s willing to finance it, then that takes that off the table. Second
Is the seller financed a much larger percentage of the purchase price than any lender would, and that allowed me to go in and make improvements, and I borrowed money on credit lines to make these improvements, but I made improvements on the property, which increased the rent, which increased the value, which then I was able to go to the bank and say, okay, now the property’s worth this much. I owed the seller this much. I owe my credit line this much. Can you write me a loan for that much to cover? Both of those things. And that’s how I got the long-term fixed rate loan. So you don’t necessarily have to go straight into the deal with the long-term fixed rate loan. You can go in with other creative financing vehicles and improve the asset and then transition into that fixed rate loan if that’s the position that you’re in. And so I just want everybody that’s listening that’s in different positions to kind of see some different ways that they could still do the same thing just in a bit of a different way if they’re willing to take on that kind of risk.So we do have to get out of here now, Brian, but any last advice for our audience about how to navigate the current market cycle?I would say keep after it. Don’t get discouraged, and especially don’t get discouraged in a market like this because this is a market where you don’t get the instantaneous gratification. So it’s easy to get discouraged. Yet this is kind of the best time to actually collect assets so that you don’t get discouraged, even if that makes any sense at all. It does. It makes you discouraged. This is the time when you shouldn’t get discouraged. It’s just a weird of the market.I totally agree. Well, thank you so much, Brian. This is great stuff. As always, we really appreciate you being here.Yeah, thanks for having me. I really appreciate it.And thank you all so much for listening to this episode of the BiggerPockets Podcast. We’ll see you all next time.