How to Invest in Real Estate in 2025 (For Beginners!)

Want to start investing in real estateIf you’ve been dreaming about getting into real estate, there’s no better time than to start today. But let’s be honest, 2025 isn’t the same as it was even a few years ago. Rising interest rates, evolving market trends and new tools have changed the game. The good news, these shifts have also created incredible opportunities for savvy beginners to jump in and build wealth. By the end of this episode, you’ll have a clear roadmap on how to get started. Let’s turn 20, 25 into the year you take action. Welcome to the Real Estate Rookie podcast. I’m Ashley Kehr, and I’m here with Tony J Robinson.And this is the podcast where every week, three times a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. And I’m so excited to get into today’s topic.So let’s start off with talking about why even consider real estate investing and why it’s such a powerful tool, especially going into 2025. So looking back in the past, we had great investing years in 20 20, 20 21, 20 22, and things have definitely changed including interest rates since then. But Tony, what would you say would be a reason that someone should consider investing in real estate or even to continue investing in real estate for 2025?Yeah, I mean, I think the reason is always the reason, right? It’s like why have we ever wanted to get into real estate? And it’s because we get long-term appreciation. We get to purchase these appreciating assets, leveraging a tremendous amount of debt, right? 70%, 80%, 90%, sometimes 100% of the purchase price can be covered with mortgages we can get from banks. We get appreciating assets that we don’t have to put a lot of money down for our tenants or our guests are paying these mortgages down. There are the tax benefits associated with investing in real estate. So you can harbor or find a safe harbor for some of your active income within real estate. Then there’s the cashflow as well. And obviously cashflow is a little bit tougher these days given where interest rates are at. But I think the reason that we invest in real estate in 2025 is the same reason that we’ve always invested in real estate. It’s because it gives us that kind of holy trinity of those things that we’re looking for.I think there’s been a real shift in why you should invest in real estate, especially rentals as far as there was always the hype of quit your job, live off your cashflow, and that’s harder and harder to do now. And I think a lot of real estate influencers, I’ll say, have kind of changed their tone about that and talking about it’s not about the cashflow, it’s about being able to cover the expenses for the property, having some cashflow. So when you have a capital improvement, you have money saved for that, but it’s more about building wealth so that you’re building equity in that property, so you’re getting the mortgage paid down on that property by your tenant. And I think that that is becoming a more realistic strategy going into 2025 is looking more for appreciation and that mortgage pay down of the equity you’ll have in that property when you’re ready to sell it or refinance it, do a 10 31 exchange, whatever that may be, and building that long-term wealth. You’re seeing more and more investors staying in their W2 job instead of quitting and saying, I’m going full-time real estate and living off my cashflow because it has become more difficult. You’re not getting the cashflow you saw in 2021.Yeah, and I think what it’s forced is a lot of real estate investors to become a little bit more creative with how they invest in real estate. And we had the good fortune in 2024 this last year of interviewing a lot of people who are leveraging different strategies to try and really juice the cashflow that they are getting. More people are looking at house hacking as a way to generate more revenue, whether it’s buying a small single or a small multifamily property up to four units, whether it’s buying a five bedroom house and renting out four the bedrooms and sleeping in one or an A DU in the back. We’ve met people who are doing sober living facilities, student housing, there’s so many different strategies co-living that we’ve seen to try and juice the cashflow. So I think one silver lining of where we’re at in the real estate cycle is that it’s forcing people to get a little bit more creative and maybe start testing strategies that are above and beyond the traditional long-term rental. You got a tenant for however many years and then they move out and you swap ’em out with someone else.Let’s look into interest rate predictions. So as always says, it’s just our guests. We have no idea what is going to happen. And anybody that tells you they do know is literally just guessing. Yeah, there’s some data you can look at to try to predict where interest rates will be going, but I think this is a huge factor or metric that so many investors have been focused on as to should I invest now? Should I wait for interest rates to drop? Things like that. So Tony, where do you see interest rates going in the next year?Yeah, I’m trying to see where they’re at today. It looks like where now national average for 30 year fix is just over 7%. So 7.07% average on a 15 year fix is 6.42. A lot of people thought that when the feds started to lower interest rates in Q4 of last year, that we would start to see that trickle down into the mortgage rate industry. And it did for a brief period. There was a moment where we were like sixes, even low sixes at one point, but it’s kind of crept back up, and that’s because a lot of times the mortgage rates, they factor in what they think the Fed is going to do. So they had already lowered rates in anticipation of the Fed lowering rates before. So honestly, I don’t know. And I think a lot of people that I talk to who are much smarter than I am when it comes to the economy and interest rates and the Fed, a lot of them are saying the same thing that maybe we hover around 7% for most of 2025 and maybe towards the back end of the year we start to get back into the sixes.
But again, I think if anyone’s holding out waiting for the three and 4% interest rates of post covid, you’re going to be waiting for a long time.But I think Tony said it exactly, does it really matter where interest rates are going? Okay, so let’s kind of break down the different examples of why you actually should care or if it shouldn’t matter. So the first thing is if you’re going to wait, if time the market perfectly, when interest rates drop, then you’re probably going to be waiting and maybe they will drop significantly, but you’re literally going to have to time it that day because housing prices are going to skyrocket that same day if all of a sudden you see interest rates back to 3%. So there’s that give and take. Would you rather pay more for a property to get a lower interest rate or would you rather get a higher interest rate and pay a little bit less? So I think looking at what your strategy is, so are you looking for cashflow?
Are you looking for appreciation? What is your investment strategy? Because if you get into a property now that at 6% and rates do drop, you can always go and refinance. You can refinance that property, but if you’re going to wait until rates drop, then you’re going to most likely be paying more for that property than you would today. So I always like to think about it that I would rather pay less for a property a little bit higher interest rate because I can always pay off that property and not have that interest, but I’m always paying less so no matter what, or I can refinance for a lower rate no matter what, you’re always going to owe that balance, that purchase price of that property. So would you rather owe 500,000 or 400,000 and maybe you’re paying less interest, but there’s always ways or strategies to get rid of that interest. There’s this give and take that no matter what, you’re most likely going to have some kind of advantage in the deal. Either it’s the lower price or the lower interest rate, but it’s very hard to get both.It is, right? Because I mean, as you mentioned, as one goes down, the other goes up. So it’s hard to maximize both of those. And I think that brings up a bigger point, and it reminds me the whole interest rate conversation kind reminds me of purchase price for new investors. And there were some new investors who were like, oh, I can’t pay asking price. It must not be a good deal. Or, Hey, this property’s been sitting for 90 days. It must not be a good deal. Those aren’t the things that you look at to consider if the deal is a good deal. The interest rate, the asking price, how long it’s been on the market, those are not indicators of whether or not it’s a good deal or a bad deal. What is the indicator is what is your analysis say? And if you underwrite whatever investment property that it is that you’re looking at and it cash flows and it gives you what you’re looking for at a 7% interest rate, it would be silly not to buy that deal simply because you’re paying a 7% interest rate. But I see so many people who are like, oh, I’m not even going to look because rates are too high. And it’s like think of the disservice that you’re doing yourself or how many opportunities you’re missing out on. So if the deal makes sense, who cares what the interest rate is? Who cares what the purchase price is? If it matches with what it is you’re looking for, I think it makes sense to move forwardWell enough about interest rates. I think the main point of this is is don’t determine your whole investment strategy based off of interest rates. There’s so many other factors, there’s so many other ways to make deals work. Don’t wait for interest rates to drop. We’re going to get into the markets we’re looking out for in 2025, but before that, starting February 11th, we’re kicking off this awesome eight week series that’s going to completely change how you think about real estate investing in 2025.Every Tuesday afternoon, you’re getting direct access to some of these sharpest minds in real estate. We’re talking about 18 guest experts who are crashing it right now, folks who are actually out there doing deals and building serious portfolios.So whether you’re juggling a nine to five or looking to scale your existing business, we’re covering it all. Want to know how to navigate this wild market? Don’t worry. We’ve got, you need to figure out how to keep more of your money at text time. Our experts are bringing their A game with real strategies you can use right now,But here’s what makes this really special. You’re not just sitting back and listening. You’ll be connecting with other investors in small mastermind groups. Think about it, real feedback on your deals, brainstorming sessions with people who actually get this and direct access to the pros who’ve built massive portfoliosAnd we’re throwing in over $1,200 worth of resources. So books, planners, even discounts to our next BiggerPockets conference. Everything you need to hit the ground running,Head over to biggerpockets.com/summit 25 to grab your spot.Don’t miss the early bird deal. So if you sign up before January 11th, 2025, you can snag a 30% discount.Alright guys, welcome back to the show.So Tony, let’s kind of move into what are some of the things that a rookie investor can do in 2025? What’s the first thing right now you’re getting started, you’re excited. What should be the first thing you’re doing to actually get your first deal or your next deal in 2025?I think one of the biggest things is that you’ve got to have some confidence and a process for analyzing properties. I think a lot of new rookies, they sometimes get into trouble when they’re thinking about buying that first deal because they don’t really have a rock solid process for analyzing these deals that they’re looking at. And maybe they take the pro forma from the listing agent, which isn’t worth the paper that is printed on because the goal of the listing agent is to get the property sold, not necessarily get you the best deal, and they tend to be overly optimistic most of the times. So I think the first thing is giving yourself a very strong and solid foundation for what good deal analysis looks like. Now, luckily, within the BP community, and actually both you and I as we were rookie investors, we went to the same exact tool to help us build our confidence and our skillset when it came to analyzing deals, and that’s the BiggerPockets calculators.
So for all of you rookies who are listening, I think one of the best things for you to do as go signer for BiggerPockets membership, start running some deals to the calculator. And the calculator is so good because it forces you to call out all of the potential things that you might forget if you were doing this by yourself. Actually, you always talk about snowplowing on the east coast. For me it was flood insurance In the Louisiana, there’s so many different things that you maybe don’t consider when you’re buying that first deal. So having a good proven process I think is probably the first step. Ash, what do you think is in addition to the analyzing numbers is important for Ricky’s,But one thing I really like too is next to every box that you fill out as you’re analyzing, you can, there’s a little question mark and it tells you exactly why you’re looking at that, where to find that number from. So I think that’s really beneficial, especially for rookies, is to be able to learn what exactly goes into analyzing a deal. So the next thing I would say is really important is to knowing what you want to buy. So think about you’re going to the mall, you’re shopping and you’re window shopping. For me at least, it gets overwhelming. Okay, you go into a TJ Maxx and they just got racks and racks and racks of clothes just thrown in there and you have to literally sift through every little thing. That is too overwhelming for me. So if I don’t know intentionally what I’m looking, what I need to go, so example, I have a conference at event, I need a dress.
So okay, I’ve narrowed it down. I need a dress, it’s going to be summer weather, I need a dress. Okay, shopping online, the supply suit too. But the same goes with purchasing your investments property. You need to have your buy box. You need to know what you’re actually shopping for because it’s so easy to get distracted. How many times have you gone into the mall or have you gone to online shop and you end up buying something else that you weren’t even looking for? So writing down the market, what market are you looking in? Narrow that down. What’s your purchase price? What’s your budget? Depending on what kind of funding you’re getting, are you, and what strategy is that you’re doing short-term rental, long-term rental? Are you looking for a single family, a duplex? Is it going to be a house hack? Do you want to have parking?
No parking? What are the aspects of the property that are important to you? Do you want to have cashflow? What kind of cashflow? Any other general requirements you can have? The more specific, I think the better that you’re going to get because it will help you analyze deals faster because you know exactly what you want and a deal can come in front of you and you go through your checklist of these are the things I want in my deal. And if they don’t fit, then okay onto the next deal. And then when you find a deal that actually fits your box, it’s in the school district, you want everything, then you can go ahead and do that deep analysis in the BiggerPockets calculator reports too. But it can be really time consuming, searching for deals, and as fun as it is to scroll Zillow and look at everything out there, it’s a waste of time. And you should really be focused on what you actually can buy and kind of figure out a system to narrow those down. And that’s having your buy box, your checklist,And I think you touched on a super important part to actually the buy box, but it’s kind of having an idea of where you want to invest and what market that is. And I feel like maybe even before you think about the market, you’ve got to understand what your purchasing power is because I think I see new investors get into trouble because they start thinking about these different markets and build out this buy box. And then I ask them, okay, well how much have you gotten pre-approved for? And like, oh, I haven’t gotten pre-approved yet. Well, okay, well, how can you identify a market if you don’t know what the upper limit of your purchasing power is? So I think before even maybe putting together the exits at the buy box, it’s like, how much can I actually afford? So go talk to a lender.
It’s never too early to talk to a lender, just go talk to me. The worst case they’re going to tell you is that, Hey, you can’t get approved for anything right now. In the best case, they give you a number or somewhere in the middle where they say, Hey, right now you’re approved for this, but if you do X, Y and z, I can get you approved for this. So I think having that clarity on what your ability is to get a mortgage is super important. And then also having clarity on how much liquid cash you have access to cover your down payment, your closing costs and your renovation setup costs, whatever it may be. Because it’s the combination of those two things that gives you clarity on what kind of market you should be focusing on. Because even say maybe you’re a really high W2 income earner, you’ve got limited debt and you get approved for a million bucks, but if you’ve only got $50,000 that you want to invest into a deal, okay, well you got to pull that purchase pricing on to match that cash investment. So I think that’s another super important part of the buy box is just knowing your purchasing powerGoing into 2025. Tony, what are some of the markets that you’re looking at for short-term rentals? So we all know that you’ve invested in the Smoky Mountains Joshua Tree. Where’s your motel? In Utah, right?In Utah, yeah. Yeah.So are you continuing in 2025 to go into these markets or are you looking elsewhere?We’re definitely looking to expand beyond those markets, and part of the reason is just like we talked about interest rates driving up prices in a lot of those markets and most of the markets that we’re in, we’ve seen that happen. And we bought our first five bedroom cabin for I think it was $560,000. And that same cabin is probably worth close to a million today, and it’s almost doubled in value, but the revenue hasn’t doubled in that timeframe. So what does that do to your return? So I think for us, a bigger focus is trying to identify what we call secondary or tertiary Airbnb destinations that probably aren’t super big on anyone’s list nationally, but in that regional area it tends to be a decent destination for people. We’re looking at parts of Arkansas, south of Branson, there’s parts of Oklahoma that we like as well.
So we’re just looking and seeing where the data is taking us, but specifically we’re looking for places where the supply versus demand relationship is pretty strong. There are a lot of markets across the country, especially the bigger markets that have seen tremendous increases in supply, so much so that it outpaces the increase in demand. So we’re looking for places that have a good balance there and the places that still have opportunities for growth in terms of revenue. So if we could identify those markets, we’re casting a bit of a wider net in 2025, so we’re trying to find the place that we can go. And I am looking actually on not the long-term side, but more so to start flipping in some other markets, and we actually talked about this on one of the podcasts, but Oklahoma City, it’s a place that I feel has pretty good underlying metrics. And maybe after the baby I was trying to get out there before the baby came, but maybe after the baby comes, I plan to take a trip out to OKC as well.Well, I think that’s interesting. I was actually at a mastermind this weekend and I was talking to an investor who did a lot of flips but had some short-term rentals and he said one of his best performing was like 30 to 45 minutes out of the main actual attraction. I can’t remember specifically what it was or where it was, but he said it did so well because it wasn’t exactly a secondary market, but it was outside of the main attraction. So it was cheaper to stay there. You weren’t in the hustle and bustle of things and it was more remote, but they had so many people that would come in and stay there because it was more affordable and they had obviously paid less for that property than they would’ve if they stayed right or had bought a property where the main attraction was too. So I think you’re saying secondary market, you’re saying maybe a smaller state park or something like that that’s not as well known. And then this would be another kind of strategy I guess, as to being more on the outskirts of that actual attraction.What about you, Ashley? Do you have any plans? I know you partnered on some flips outside of Buffalo, but are there any more plans to kind of expand beyond the backyard?Yeah, I had this nightmare eviction that will not end and it’s going to small claims court now. So I have said to myself, and I’ve written this out for my goals, is that for any long-term rentals, I’m going to invest outside of New York state. So I’ve been looking in Pennsylvania and Ohio because they are a more landlord friendly state. I actually been looking on the outskirts of Pittsburgh and actually along the Rust Belt, which I did an episode with Dave Meyer and Henry Washington where they called it Lake Effect cashflow, which I’ve always known it as the Rust Belt as. But that is definitely something that I’ve realized is really important to me is the tenant landlord laws. So I started out investing in New York because it was comfortable to me. I knew the market and it worked out great for the past 10 years, and now I realize that I just don’t want to deal with some of the things that are coming up as great as the cashflow has been, some of the headaches with doing evictions and things are just not worth it to me anymore.
So I’m going to go out and look into a different market. So I would say that should also be something when you are doing market analysis, if you are going to invest out of state, so you just have this wide realm across the country of where you can start is actually looking, if you’re doing long-term rentals, looking into what states are tenant landlord friendly, and you can find that right on biggerpockets.com too, or just a simple Google search as to what the tenant landlord laws are. There’s a website of val.co and they actually have a list of, you can click state by state as to what each of the tenant landlord laws are. They kind of give you a brief summary for each state too, which I think is super helpful.Yeah, well actually this is kind of a big deal. I mean, the podcast turns five years old here in a little bit, and the entire time of the podcast you’ve been really focused on your backyard. So it is cool to see you getting to the point where you’re looking to go elsewhere.So I got to build a whole team and I’ll keep you guys updated as to where I specifically pick. I think I’m going to be able to still manage it, but I’m going to need a handyman, boots on the ground, things like that. But I think the setup I have with my virtual assistant to kind of manage the tenants and the communication, everything like that. So I don’t think I’ll specifically need a property and management company, but so I’m actually really looking forward to it. So I’ve been starting doing a little due diligence into my market analysis. So if you guys saw my rookie resource video and market analysis, that’s exactly what I’m doing for some towns in Pennsylvania and in Ohio.Yeah, super cool. And like side note, it’s funny you say Pittsburgh, because I was literally just looking in Pittsburgh last night from a short-term perspective, I know quite a few people who have purchased in that market and done pretty well. And even though it’s by no means a secondary market, it’s obviously maybe a smaller major market, but from a short-term perspective, there just isn’t a ton of super experienced hosts in that market. So I think there’s a little bit of an opportunity there.We have to take the final ad break, but stick around for more. We’ll be right back.Alright guys, let’s jump back into the show. Let’s shift a little bit, Ashley, and talk about the mindset piece for Ricky Investors going into 2025. I do believe that the tactical part is important, but also just getting in the right headspace is really important as well. What do you think are maybe some of the common fears that stop Ricky’s from potentially buying? And then how do you think that they could maybe overcome some of those fears?Yeah, so the biggest thing is is that they’re not going to have enough money to cover expenses or that it’s going to bankrupt them or drain them of everything they have. I think that is one of the biggest fears. So one way to overcome that is purchasing a property where you can really do your due diligence and you have trusted people around you that can assist with that as to going through the property and pointing things out to you. And really that is hard because sometimes when you’re looking at a property, especially if it’s on the MLS that you don’t have that much time or your offer is going to look better if you don’t do an inspection. So if you’re searching for deals, really try for those off market deals where you’re not competing with other people and you have that time to do due diligence.
There was one of my friends invested in a hotel and it was a boutique motel or hotel in a destination resort area, and it was actually an off market deal. She did seven months of due diligence because it wasn’t listed online, they weren’t getting other offers, things like that. So I think that’s a huge advantage of looking for off market deals is that you can give yourself more time, not all the time, but often give yourself more time to really do your due diligence. And this has, that had been her first boutique Mattel, so she really wanted to take her time and learn everything. She could really dig into every aspect of that property and also the operations of it. So I would say really take your time with due diligence and know what’s going to the property, but also have reserves. That’s what reserves are there for.
So don’t take your money you have saved for something else and say that’s your reserves. This is money that is meant to be spent. And it took me a long time to get into that mindset because I’d be like, oh my God, I have a $5,000 HVAC expense, I have to pull money out and pay for this. This is awful, blah, blah, blah. And now it’s like, okay, that’s what I have this money here for. This money is here to make my property better, to take care of my property. And once you switch that mindset, it’s a lot easier to let go of that money when those expenses come up, but you have to have that money in the first place. So we hear all the time about no money down deals, how can we purchase a property without having a lot of money and low down payments, things like that.
Even if you go into a property putting 0% down like a VA loan or you have a private money lender, so you did seller financing, you should still have money, you should still have reserves in place if things do not go your way. So that worst case scenario, feared fear can kind of be settled in the aspect that you know, have this money if something really does come up that needs to be fixed and needs to be repaired. So I think that’s one of the biggest hurdles of a rookie investors. They’re afraid they’re going to get into the deal and it’s going to cost them more than what they expected. So the more reserves you have, the better. And if you don’t have those reserves, that’s where you can partner with someone. And that’s what I did. My first deal is I partnered with somebody who had money in case something really bad did happen, we could tap into the money that they had.Yeah, no, that’s a super valid point ash, of just thinking like, Hey, what is the worst possible case scenario and can I be prepared for that and can I live with that if I do have to go through that? And I think the reserves makes a big difference there. I think the only other thing that I’d add is that we just also need to reframe or maybe reshape our expectations around that first deal that you do. Again, we live in the age of social media, a lot of things are sensationalized online, but I’ve never met anyone, Ashley, you let me know if you’ve ever met someone, but I’ve never met anyone that retired off of their first deal. No one’s had a first deal that was so good.There definitely could have been someone that did, but then their second or their third or maybe their sixth deal wasn’t that great and they really had to struggle or hustle or they ended up going back to work. So your first 10 deals aren’t going to be, every single one isn’t going to be a home run. And if it has been, please submit an application to come on the show biggerpockets.com/guest, please come on and tell us about that,Right? We want to hear if you retired off of your first deal, you got to be breaking like a Guinness World record or something. But I think that’s the point, right? It’s like the purpose of your first deal is to educate yourself to lay that foundation proof of concept and then give you the foundation to move on to your second deal with more confidence so then you can move on to your third deal with more confidence. So stop putting so much pressure on that first deal to be perfect and think of it more as an education experience. And I think if you can flip that switch, it takes away a bit of that pressure and a little bit of that fear that Ricky’s might experience as they’re thinking about that first property.So Tony, we actually had a comment on one of our YouTube videos and it was a rookie reply episode we did, and it was someone talking about a deal if they should do it or not. And somebody commented and said, why would you buy 10 mediocre deals that don’t cashflow that great, why wouldn’t you just wait and find those three really great amazing deals so you have less overhead? And I was actually kind of stumped as to how to answer this question because it is super valid. Why have more overhead? I went through a time in in my investing journey where I was just acquisition, acquisition, I need more, need more units, I got to get to 30 before 30. And it’s like there is that kind of balance where you can’t wait for those three amazing deals if you don’t ever get started and take that first step. Those deals are going to be even more harder to find. But if you’re doing that repetition and you’re getting that deal, so I think there’s a good balance of only taking deals that actually work and are decent deals instead of just acquiring, acquiring, acquiring. But also you shouldn’t be waiting for that home run deal to happen either.Yeah, there’s definitely a balance there and I think it’s art and science, but you’re right, it’s more important that you get started than waiting forever for that perfect deal. You mentioned this earlier, Ashley, I just want to circle back to it, but I think it’s an important piece, but it’s also you said, Hey, as I go into one of these new markets, I’m going to have to build a team. So I want to talk about that just a bit because I think for a lot of people, maybe their goal is to go out of state or at least somewhere that’s not drivable from where they live. So when you think about building the team, and obviously you’ve got a little bit more experience, but when you think about the Ricky’s Ashley, who are the people that they need to put on their team?So the first thing is, depending on your state, you may need an attorney to close on a property, okay? If not, you’re going to need probably a title rep and you’re going to need an agent, a real estate agent to help you unless you’re sourcing off market deals and you’re going to be doing that yourself. But one thing with those three people kind of tied in is I would recommend having some kind of resource that knows that market and how to close. So closing in a different market, even if it’s in the same state. So when I bought our lake house, it was a different county. The closing was extremely different process. And even from town to town, there’s different requirements. Like in one town I had to do a sump pump inspection, which I had no idea and nobody told me. So I think having somebody that’s actually going to help you with the closing process, even if you’re doing an off market deal, but you’ll have your agent.
So finding your agent to actually help you find deals or how you’re going to do it off market. And then who’s going to kind of guide you along as to what are the requirements and what the process is to actually close in that town or that county. And then you’re going to need some kind of boots on the ground for repairs or maintenance. So this could be a handyman or this could be a bunch of different vendors such as a plumber, an HVAC guy, an electrician to actually handle the maintenance for you. And there are more and more companies coming out that are actually partnering with property management companies where you send them your maintenance requests and they actually dispatch it for you. They find the vendor for you and they send them to your property. So you don’t have to do anything. I don’t have any experience with that.
Maybe that’s something I’ll try when I invest out of state and see how that works just to give you guys some good content and feedback. But I see more and more of these coming up, which is making it easier to build your team. So you definitely need some vendors, contractors that will actually do repairs because that is something you won’t be able to do remotely. And then also you have the option to self-manage or to hire a VA to handle the management for you, or you can hire a property management company. If you go the self-management route, you’re going to need somebody to actually do the showings for you. So that could be an agent. Right now I use a real estate agent even for the properties around me where we pay her a flat fee for every property that she leases. So we get the listing up, she sets her availability and she schedules all the showings and handles all that.
And then she actually does the move-in too with the tenant. So if they sign their lease line, they pay online, and then she actually goes to hand them the physical keys, does the move-in inspection with them, and then she gets paid. So you’ll need at least one boots on the ground. So the person that’s actually leasing it, maybe they’re the person that comes in and handles handyman stuff too. And you’ll have to check your state laws too. Do you need an actual licensed person to actually do your showings and do the leasing for you too? But I think those are kind of just your general people, but then outside of that, especially if you’re just getting started, you’re going to need a bookkeeper. Unless you’re doing it yourself, you’re going to need a CPA to help you with your taxes.I think the only one that comes to mind for me that we didn’t touch on is just like a good lender as well. I think that’s a super important one because Ash and I are both big proponents of the small local regional banks, and that’s where you tend to get some of the best options. So as you’re searching in this new market out of state or just long distance, finding a bank that’s local to that place as well. I think BP has a great resource, is a book by our buddy David Green. It’s called Long Distance Real Estate Investing. It’s been on one of the bestselling real estate books on Amazon for a while now, but if you guys go to the BiggerPockets bookstore, you’ll be able to pick up a copy there. And he goes into excruciating detail about all the things you need to do to build your team and invest long distance, but just wanted to get ions a quick snapshot of what should they expect as they think to go maybe long distance. It is possible you just got to put the right people in place.And on BiggerPockets too, they have all of their finders. So your agent finder, you put in what market, what you’re looking for, and they’ll match make you with that. They’re doing it now with property management companies. So there’s a whole list. You can go to biggerpockets.com/teams and you can actually see all of the different team members that you can get connected to in the market that you’re looking to invest in. Another thing that I’m going to do too is once I know which market, and I might actually do this, just reach out as to like, Hey, which market in Pennsylvania should I invest in to see what other people are saying and start my research from there? But also asking for referrals and recommendations in the BiggerPockets forums and on the real estate rookie Facebook page, we have over a hundred thousand people in there and somebody is probably investing in that market, knows something about that market that you’re looking in that can give some kind of insight to,Well, I think we gave him a good dose of what to look for in terms of building the team. But I think another big part, Ashley, of being a rookie in 2025 is building your network. You and I both talked about this as well, but for a lot of people when they make that decision to become a real estate investor, they’re almost making that decision in a vacuum. And their best friend isn’t jumping on the bandwagon with them, their mom, their dad, their brother, sister, best friend’s, cousins, no one else is kind of going on this journey. And oftentimes you are somewhat on an island by yourself. So I think it’s important to talk a little bit about the networking piece and building up that community because it’s so important to building your own confidence. And obviously I think one of the best places to start is be pecon one of the premier real estate events that are out there, and this year it’s going to be in Vegas, which who doesn’t love going to Vegas? But if it’s not bp, look for other real estate focus events or events. Look for local meetups, go to meetup.com and search for meetups in your area. Search local Facebook groups for meetups. The forum on BP has a meetup section, but just start interacting with on a regular basis other people who are both interested in and those who have already accomplished the things you’re trying to do in real estate.Tony, the first real estate meetup or event or conference that you went to, what was the big takeaway? What do you think was the biggest kind of takeaway that you had from that event?The first one that I ever went to, it was a smaller meetup at a brewery here in SoCal. It was very calm and relaxed, and I think the biggest takeaway was that I wasn’t the only person that was new to this. And I think before you walk into a meetup for the first time, you’re just expecting that everyone’s going to be the super experienced, high level crushing it type real estate investors when the truth is there are a good mix of people and there’s a good bunch of people who are just getting started you. And I think my biggest takeaway was that when you walk into those rooms, it’s really just about trying to find someone that you connect with. And guys, here’s my tip. If you were Ricky going into a meetup for the first time, all you have to do, you’re going to walk in. A lot of times there’s like, Hey, grab a name badge and put your name on there. So walk in, get your name badge, put your name on there. Just find a group of people, whoever is the closest group to you, just walk over to ’em, say, Hey guys, my name’s Tony mind if I join you. It works every time. I’ve never seen that not work.Yeah, what’s someone going to say? Like, no, I’m sorry, you can’t. And then everybody else in the circle is staring at ’em like, you’re so rude.This isn’t high school. It’s like everyone is there to network and meet with folks. So it’s a simple way to break the ice. Hey guys, my name is Tony. Do you mind if I join you? Right. And as you start to have those conversations, say, Hey guys, I really enjoyed this conversation. I want to go network a little bit more with some other folks over here. Hey, let’s exchange contact information and you get everyone’s contact info, go find another group and do that same thing. And it’s a great and easy way to work the room, meet some good people and build those connections.And I think one thing not to do is to just stand there awkwardly, actually go in and introduce yourself because then it becomes awkward for everyone else standing there that you’re just standing there and then they have to make the move to introduce themself. And so I think going right in, in with that confidence and just introducing yourself, seeing that you’re a new investor, investors are so excited when there’s new investors because you’re so excited, you’re eager, you have energy that it’s always awesome to meet someone with that kind of energy because if you’re walking up to an experienced investor, they could be drained as to what was going on with their current deal or things like that. So it’s always great to have that new investor energy. So go up and introduce yourself.And I think the only last step I’ll share about on the networking piece is also don’t be the person that just walks in with a take attitude where you’re just going in saying, Hey, here’s what I’m looking for. Here’s what I need help with. Here’s what I’m looking for. Here’s what I need help with. Take my business card. Take my business card. I’ve been at events where people are just circling the room, passing out their business cards to everyone, and people are talking about them at the event, but it’s for the wrong reasons. So just don’t be that person that’s very clearly only there for their own needs.So to wrap this up, Tony, what is something that we talked about building the buy box, figuring out your market, building your team, analyzing deals, but what’s an actual step into investing that rookie investors could take today where they’re actually investing in real estate, doing a deal or whatever it may be? What’s kind of like a low risk way that a rookie can get started in 2025?That’s a great question. First, I’ll say, I think low risk is going to vary from person to person in terms of how much capital you have, how much time, energy you have to give. So everyone’s example or definition of low risk is going to be different. But I think just generally speaking, there are a few ways that you can reduce risk. Number one is purchase price. If you just buy something that’s cheaper, typically there’s a little less risk there because if a deal goes sour, who cares. Another way that you can reduce risk is by reducing your leverage. So if you put a bigger down payment, there’s less of a mortgage on the property. So you’ve got more equity built in on day one. So if it doesn’t work out, it’s easier for you to sell. If there’s a turn in the economy, whatever it may be, you just have more cushion on that deal, right?
So lower purchase prices, less leverage, which basically means you’re putting a bigger down payment. So instead of putting 20% down there, you put 40% down or 50% down. The other way is buying stabilized properties. If you can go out and find a property that already has the tenant place, it’s already been fully renovated, it’s basically turnkey and ready to go, there’s a little less risk associated with that because you’re not sourcing tenants, you don’t have to worry about managing a rehab, you’re just plugging into a property that’s kind of plug and play and ready to go. So those are three quick ways that I can think of to try and reduce your risk, to dip your toes into the world of real estate investing without making it this massive, big scary thing for you.The only thing I would add to that is it’s not necessarily investing, but getting a job that’s involved in real estate investing. So co-hosting, learning, if you want to invest in short-term rentals, if you can learn the operations and the inside outs of that actual strategy, then you will have an advantage and you will feel more confident. So I worked as a property manager for a year before I bought my first property. And what I was bringing to the table was that I could manage a deal, and that’s how I actually found a partner. I knew how to property manage. So I think if you’re looking, you can look at co-hosting for a property. I think there’s a lot of opportunity there to act as a co-host on a short-term rental, even long-term rentals as to what are ways that you can help investors. I’ve told this story before, but there was this cop that I met that when he was in college, he would do maintenance requests in between his college classes for an investor, and he learned what their systems and processes were, what apartments rented for in that market, things like that.
So I think there’s a lot of opportunity, and I wouldn’t necessarily say working for an investor, but I think you’re better off if you actually kind of build something on your own where you’re building a co-hosting business or something like that. We’ll give you more opportunity, I would say, in the long run. But finding some way to kind of interject yourself into the real estate realm is a low risk way. And sometimes they can provide little capital because you’re actually getting paid to actually do these things, to learn the operations, to learn the acquisitions, things like that too. So I think that kind of wraps up our episode for looking into 2025. So I hope you guys learn some things, but if anything, you guys got really motivated, inspired, and eager to jump into the next year.And I think the only thing that I’ll add as a final note on my side, Ashley, is for all of our Ricks who are listening, if you’ve been listening to this podcast long enough that most of what Ashley and I talked about today, you already know, then that is a very strong sign that it’s time for you to jump in and start taking action. There’s only so much education that you can do from the podcast, from the books, from the YouTube channels. At a certain point, you got to jump in, you got to take action. And if as we were going through most of what we talked about today, you’re nodding in your head saying, I knew that. I knew that. That’s the sign to kind of kick it into high gear. Go get that first deal and make 2025 the year you actually take some action.Well, thank you guys so much for listening to this special episode of looking into 2025. I’m Ashley. And he’s Tony, and we’ll see you guys next time on the next episode of Real Estate Rookie.