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After reaching an all-time high in 2007, single-family home prices collapsed 27.4% until hitting a low in 2012. Since then, the Case-Shiller U.S. National Home Price Index has exploded by 141.23%. 

Don’t you wish you had a time machine and could buy a home at 2012 prices? 

You don’t, and you can’t, of course. But you can invest in another type of real estate that’s coming off a similar collapse in prices

Multifamily apartment building prices have fallen by 23.5% since reaching a peak in July 2022, according to CoStar. The Freddie Mac Multifamily Apartment Investment Market Index (AIMI) fell 28.1% before bottoming out and starting to rise again. 

And you don’t need millions of dollars to invest in multifamily properties. You can invest fractionally with $5,000 and enjoy all the cash flow, appreciation, and tax benefits of ownership. 

Why Multifamily Looks Like It’s Bottomed Out

First, take a moment to remember the narrative around real estate in 2011-2012. The mood was bleak—all you read were doom-and-gloom headlines, and the narrative was all negative. In other words, there was “blood in the streets.” 

Today, you are in the same mood in multifamily real estate. Investors are running scared after three years of capital calls and distressed sales. 

Every investor knows the famous Warren Buffett’s advice to “be fearful when others are greedy, and greedy when others are fearful.” But the mood among investors is far from the only reason to consider multifamily right now. 

Dropping construction starts

What drives market prices? Supply and demand—and multifamily housing supply rose sharply between 2021-2025. 

But after peaking at 614,000 in late 2022, multifamily unit housing starts have dropped to 370,000 as of February. You can thank the “blood in the streets” for that. 

In 2024 alone, new multifamily construction starts fell by 25%

So yes, the U.S. saw a lot of housing construction post-pandemic. But that surge in new construction has passed and crashed, while the country remains in a housing shortage. 

Continued housing shortage

A 2024 report by Zillow estimated that the U.S. is still short 4.5 million housing units. Most markets don’t have to worry about an oversupply of housing. Quite the opposite. 

Rising rents

Multifamily prices are calculated based on rental income. And rents keep rising faster than inflation. In fact, rents are one of the primary drivers of inflation. As of February, rents nationwide are up 4.2% year over year

Rising prices

After hitting a low in 2024, multifamily prices have started rising again. 

The Commercial Property Price Index (CPPI) index, calculated by MSCI Real Capital Analytics, shows multifamily properties hitting a low in February 2024, leveling out over the next few months, and rising since. 

The CPPI also shows multifamily prices far below their long-term trend line:

image1

That means they have some serious catching up to do, marking now as the perfect time to buy into the market.

Multifamily cap rates are starting to compress again

After seeing how low they could go in 2021, multifamily cap rates expanded sharply from 2022-2023. But in 2024, they stabilized, and in the second half of the year started shrinking again, according to the CBRE’s 2024 Cap Rate Survey.

As a refresher, cap rates are the other part of the price equation for commercial real estate. You divide a property’s net operating income (NOI) by the cap rate to come up with the value. 

Lower cap rates mean higher prices. So, one of the drivers of rising multifamily prices is cap rates turning around and compressing again. 

How to Invest in Multifamily Without Betting the Farm

I get it: There’s a lot of uncertainty in all financial markets right now, real estate included. The Trump tariffs and trade wars, as well as recession uncertainty, all make for fearful investors. So, how can you invest in multifamily while keeping your risk in check? 

Invest small amounts

If you invest in a multifamily syndication yourself, it typically requires a minimum investment of $50,000 to $100,000. I don’t like that. So, I go into these investments with other people through a co-investing club. 

It’s how I practice dollar-cost averaging with my real estate investments, steadily investing $5,000 each month. 

Protect against recession risk

Some investments are recession-resilient, continuing to thrive even during downturns. 

For example, I’ve invested in mobile home parks with tenant-owned homes. If a renter has to choose between paying a $500 lot rent and paying $6,500 to move their mobile home, which do you think they’ll pay? 

Likewise, I’ve invested in multifamily properties that get a property tax abatement for setting aside 50% of their units for affordable housing. Those units have a waiting list—imagine how much more the demand would rise in a recession.

Here are other recession-resilient real estate investments for more examples.

Don’t count on compressing cap rates

The trend line looks positive for cap rates compressing again. But I’m still not counting on that for the success of my investments. 

In my club, we generally like to see strong cash flow in the multifamily investments we vet. We like collecting distributions, like properties that don’t rely on price improvements for returns. 

With strong cash flow, the operator (and you) can sit back and hold the property long term, waiting out rough patches—all while collecting plenty of rental income. 

Diversify with other property types

Yes, it looks like a great time to buy multifamily properties. But you should look to diversify your portfolio. That includes taking a look at industrial properties, mobile home parks, raw land, hotels, and vacation rentals. 

I don’t have a crystal ball, so I can’t predict the next hot asset class. And I don’t have to because I invest in so many different types of properties. 

Diversify across states

I have cash tied up in over 30 properties across 13 states and counting. 

Again, no one knows where the next “hot” market will be. Who cares? Spread your money across many geographical markets, and you’ll catch some of the hot ones. 

Diversify across other passive investments

Syndications are just one type of passive real estate investment but aren’t the only option. You can also invest in private partnerships, private notes, secured debt funds, and real estate equity funds. That also helps you invest for different timelines, including some investments as short as nine months. 

Final Thoughts

Multifamily properties experienced a bear market from 2022-2024, along with the losses and fear that come with them.

The bottom of a bear market doesn’t look and feel optimistic yet. The press and mood remain mostly negative at the bottom before it becomes obvious to everyone a new bull market is starting. That’s precisely the time to buy in. 

As someone who invests steadily every month, I don’t advocate trying to time the market. But as far as I can tell, most market metrics are signaling the bottom of the bear market and the beginning of a new bull market in multifamily. 

It doesn’t feel like the giant party that it was in 2021. And that’s precisely what makes it a better time to buy.

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Natural disasters seriously threaten rental properties, with hurricanes, wildfires, floods, and winter storms causing billions of dollars in yearly damages. For real estate investors, failing to prepare can lead to costly repairs, lost rental income, and long-term financial setbacks. 

The good news? You can safeguard your assets and minimize risk with insurance companies like NREIG, as well as structural reinforcements and emergency planning.

Why Every Investor Needs a Disaster Plan

Every region has its own set of natural disaster risks, from hurricanes in Florida to wildfires in California. Even “safe” areas can experience unexpected weather events, like Texas’ deep freeze in 2021 or the rising flood risks across the Midwest. 

I live in Houston, and I had to deal with the events of 2021 with the wrong insurance. I ended up paying thousands to fix things I thought were covered. This year (2025), we experienced another deep freeze, and luckily, this time, I had NREIG as my rental property insurance provider.

A proactive approach to disaster protection isn’t just about avoiding property damage—it’s about ensuring business continuity. A well-protected rental property retains value, keeps tenants safe, and prevents costly vacancies. The key is knowing where your risks lie and taking targeted action to mitigate them.

Insurance: Standard Coverage Isn’t Enough

Many investors assume their regular landlord insurance policy will cover disaster-related damages, but that’s rarely the case. Most policies exclude high-risk events like floods, earthquakes, and even some hurricane-related damage. Without proper coverage, investors can face massive repair costs out of pocket.

To fully protect your investment properties, consider specialized coverage options that go beyond standard policies:

  • Flood insurance: Covers damage caused by rising water from external sources. This is essential for properties in flood-prone areas. While you may have coverage for named storms (hurricanes), storm surges that could cause flooding due to the hurricane are likely only covered under a flood insurance policy. Talk with your insurance agent to understand your coverage entirely.
  • Earth movement coverage: Protects against earthquake shock and sinkhole losses, which are typically excluded from standard policies.

Some property insurance policies exclude Named Storm coverage, leaving owners vulnerable to hurricane or tropical storm damage. If the property is in a high-risk area, it’s crucial to ensure Named Storm coverage is included, as it’s not an optional add-on but a core policy feature. A provider like NREIG can help investors customize policies to ensure comprehensive protection against a wide range of potential disasters—before it’s too late.

Fortifying Properties Against Damage

Beyond insurance, physical reinforcements can significantly reduce disaster-related repair costs. Simple improvements can make properties more resilient, keeping tenants safe and reducing future insurance claims.

Some key upgrades include:

  • Storm-resistant features: Impact-resistant windows, reinforced garage doors, and roof straps can help properties withstand hurricanes and tornadoes.
  • Fire prevention measures: Clearing vegetation, installing fire-resistant siding, and using metal roofing can protect homes in wildfire-prone areas.
  • Winterization and freeze protection: Insulating pipes, sealing windows, and maintaining heating systems can prevent costly freeze-related damage.

Emergency Planning: A Must for Every Investor

As well as substantial insurance and well-fortified properties, a well-thought-out emergency plan can make all the difference in protecting your investment. A few key steps include:

  1. Tenant communication plan: Provide tenants with emergency contact numbers, disaster instructions, and clear evacuation procedures.
  2. Backup power solutions: Investing in generators or battery backup systems ensures essential systems remain operational during outages.
  3. Cloud-based documentation: Storing insurance policies, lease agreements, and property records digitally ensures quick access in case of disaster-related losses.

Stay Ahead of the Risk

Natural disasters are unavoidable, but preparation determines financial outcomes. With the right real estate investors’ insurance, structural protections, and an emergency plan, investors can safeguard properties, minimize repair costs, and ensure long-term profitability.

Working with NREIG provides essential coverage, including a Tenant Protector Plan for liability (a unique offering only provided by NREIG); Terrorism & Political Violence Coverage; Service Line Protection; E&O for self-managed properties; and Equipment Breakdown Coverage for HVAC and electrical failures. The right coverage ensures your investments stay protected—no matter what comes your way.



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Would you delay your early retirement for years to feel safer and secure once you FIRE? That’s what Mark Trautman did, FIRE-ing before discovering the FIRE movement was even a thing. While he could have retired in his 40s, Mark pushed his retirement date to 50, retiring with a conservative withdrawal schedule that even beats the 4% rule. But, thanks to being invested throughout his retirement, Mark has blown past even his Fat FIRE dreams, spending what he wants, when he wants, without a worry!

But it wasn’t the money that made Mark thankful for FIRE. Mark was able to be right next to his wife and even his father during their last days, being fully dedicated to them and not worrying about a job or paycheck he had to go after. This is the TRUE point of FIRE, and living like Mark could have the same powerful impact on you.

Speaking of paychecks, Mark’s “FI paychecks” are fueling his retirement, so much so that he barely (if ever) needs to withdraw from his retirement portfolio. How is this completely passive cash flow funding his life? Copy Mark’s strategy, and you could be Fat FIRE by 50, too!

Mindy:
Hello, hello, hello my dear listeners, as you may or may not know, my husband Carl and I have a new YouTube series on the BiggerPockets money YouTube channel called Life After Fire. And as a very special bonus, we are going to be airing episodes here on the podcast on Wednesdays. So without further ado, let’s get into it. Today I’m speaking with Mark Troutman from Mark’s Money Mind. Mark has been retired for 10 years and has an interesting spending concept called the Fun Bucket. He also has a super interesting money story in general. We’re going to talk about how he reached financial independence, how he left his job, and how he spends his Tuesdays. Hi there. My name is Mindy Jensen, and today there’s no Carl Jensen. He’s off play and hooky, and this is the Mindy and Not Carl Life After five podcast where we talk about what happens after you reach financial independence. And we call this life after fire because we’re talking about and talking to people who are living their best life after reaching financial independence. Mark, thank you so much for joining me today. I’m so excited to talk to you.

Mark:
Yeah, it’s great to be here. Just down the street almost,

Mindy:
Almost just down the street. Mark recently moved really, really close to me and I’m so excited to have him in town. Mark, let’s talk about your journey up to financial independence. Really quick overview. How did you reach financial independence? What was your job? How did you invest? Give me all the details.

Mark:
So I worked in the financial industry my whole career. I graduated in 1987, went to work in that year in a brokerage firm, which you can imagine was a very interesting year, right? School. I was in high crash in 1987. I was actually sitting on a margin desk in a management training program and there was quotes coming in, but people didn’t have that on their phones or anything. So we were calling clients and saying, Hey, by the way, you need to put up more money or we’re selling you out. And they’re like, why? What’s going on? They’re like, well, the market’s down, whatever, 30%. And so my job was basically you need to call these people and say they need to put up money in the next half an hour or we’re selling ’em out. So that was my first experience with kind of Wall Street as a recent college graduate.

Mindy:
Oh, trial by fire.

Mark:
Yeah. Well, and then I didn’t really have any skin in the game, so it didn’t really bother me too much, but in hindsight now I realize how significant of a day that was at the time. You’re just like, well, I guess this is what the job is. And eventually I got into money management and almost all of my career was managing a mutual fund. So that’s what I did. And it was an equity mutual fund and I invested in equities my entire career, and that’s kind of how I got there. I didn’t have an extreme savings rate some people in the fire community do. It was more like I look at it from a standpoint of gross income, what is my savings as a percentage of my gross while I was living in New York and New Jersey, so my taxes were very high, so I was basically paying between federal and state tax. About a third of my income is going to tax, about a third was going to savings, and about a third was going to spending.

Mindy:
Okay. Well, I would like to note that 33% savings rate is still a pretty good savings rate. It’s not 75% like some people, but that’s okay, because this was also when the early 1980s,

Mark:
Well, late eighties and into the nineties. Yeah, two thousands, all that. Yeah.

Mindy:
Yeah. So 33% is still really, really good. I mean, you retired, what age were you when you retired?

Mark:
I actually ended up leaving at age 50. I kind of backed into what I could have retired at, and it was kind of somewhere in my early forties, but I didn’t know about the fire community. I didn’t know about any of this stuff. Just even at 50, I was like, well, I’m early, and I didn’t find the fire community until after I stopped working.

Mindy:
Wait, wait, wait. You didn’t find fire until after you stopped working. How did you know that you could retire early, mark?

Mark:
Well, I did the math.

Mindy:
What year was this?

Mark:
2015 is when I actually stopped working.

Mindy:
Oh, okay. So this is after the 4% rule. Had you heard of the 4%

Mark:
Rule? Yeah, I mean, I was aware of that, and that’s kind of what I was using as my justification that I had enough. And I also, I ended up sitting for my CFP after I retired, just because I thought maybe I needed to keep some options open. Maybe I do need to work down the road. I wasn’t sure. And as I was going through that, you do financial plans as part of that curriculum, so of course you do your own financial plan. And I realized, oh yeah, I’m good. I don’t actually need to work anymore.

Mindy:
Since you retired in 2015, have you generated any income by trading your time for money?

Mark:
No.

Mindy:
Okay. I love that answer. But although I will say that if you do decide to trade your time for money, that’s okay too. I’m just setting the bar. Okay. So you retired based on the 4% rule. You understand that this works. Do you draw down from your investments?

Mark:
I do draw down now, but I didn’t initially, or at least I was very concerned about doing it initially. I did have a period of wifi, so my wife was working for a few years after I stopped working. She did not make very much money, and she was basically an administrator at a police department, and she was actually deferring all of her income into her 4 57. So we weren’t really living off of her income. But what we were doing is, well, I kind of had income avoidance for a couple of years, I guess you would say, because I was kind of afraid to draw down. I mean, the mass said, yes, you can do this, there’s no problem. You can start living on your portfolio, but when that income stops, I think people don’t realize how much it’ll kind of freak you out. You don’t have this paycheck coming in anymore.
And so I was trying to kind of like, how do I avoid actually having to take money out of my portfolio? So I kind of looked around and we had this classic car and I was like, well, I’m not really using that anymore. If I sold that, I wouldn’t have to draw down for a year. So I sold that. And then in the second year I did work for a very small private company and I owned a very tiny sliver of the stock, but it was a private company, so I never really knew if it would pay out or what it would be. So I never counted it in my five portfolio figure. But they did end up cashing me out in my second year of retirement. And so that enabled me not to have to spend in the second year. And it was about a little less than what I would spend in a year. So it wasn’t some huge windfall or anything. It was basically a year’s worth of income.

Mindy:
Okay. Well, a year’s worth of income is still more than you had and more than you were counting on. I’m sorry, did you say how much that classic car sold for in terms of your annual spending?

Mark:
Yeah, I’ll tell you what it was. It was a Porsche 9 11 9 64 model in case anyone out there was wondering 1993 and it, it’s called an RS America. So it’s a lightweight car. We used to race cars or drive cars on a racetrack. And when we moved to Colorado, and that was in 2008, we had sold all of our race cars. We owned a factory race car and stuff like that. And we had sold all that stuff. And then when we got to Colorado during the market correction of 2008 and nine, my old mechanic called me up or somebody from that club called me and said, Hey, there’s this car available, do you want it? So I bought it for $30,000, drove it on the racetrack for a couple of years, and then it became kind of a collector car. And I was driving it on the racetrack one day and somebody said, I can’t believe you’re driving that car on the track. And I was like, well, why? I paid 30,000, it’s no big deal. That’s what it’s a low cost track car. And he’s like, you need to look that thing up. And I was like, okay. So I looked it up and they were selling for about a hundred thousand dollars at the time, and now mine, because it had been on the track and had a cage in it and stuff, I ended up selling it for 85,000.

Mindy:
Okay. So that’s a nice amount of money. I wish I had a car that I could sell for $85,000.

Mark:
Mr. Twos don’t quite go for that.

Mindy:
So you didn’t take out from your portfolio for the first two or the first three years?

Mark:
Two years.

Mindy:
Okay. What happened in year three that made you feel comfortable with taking money out of your portfolio?

Mark:
So even though I had run my own numbers and I was familiar with the 4% rule, and at around that time is when I started reading big earns material, early retirement now, and he talks about other safe withdrawal rates or other ways to come about the safe withdrawal rate figure. And I read all of his stuff, which if anyone’s familiar, that’s kind of mind boggling in itself. It is very, you definitely get deep in the weeds in that stuff and came to the conclusion that, well, he’s done a lot of research. I agree with the way he approached everything, 3.25% and I should be fine. Plus I hadn’t withdrawn anything in the first two years, so I was already kind of two years ahead of the game because I hadn’t drawn down. And I was like, okay, well if I just say, okay, then 3.25% is my number, not four or 3.25.
And then I had also read an article that Morningstar put out saying that another way to improve your sequence of return risk is just not to take a inflation raise in a year after your portfolio has declined, for example. And it made a really big difference because it gets compounded because if you don’t take that one inflation raise in that year, then the following year you’re taking an inflation raise on the previous amount. But that one year has always, you’re kind of behind a year as a result of that. So I was like, okay, so I have this kind of investment policy statement or withdrawal statement and says no more than 3.25%, and if the market or your portfolio goes down in total value in a year, the following year, do not take a raise. And then I felt comfortable enough with that approach that I was like, okay, you can start drawing down, but I didn’t. So I create a paycheck for myself, but I didn’t give myself the paycheck to the full 3.25%. Actually, it was more like, I want to say it was like two and a half percent just because I didn’t feel like I needed all of it. So then that was an extra buffer. So you can see the progression here, buffer after buffer after buffer contingency after contingency.

Mindy:
Dear listeners, we are so excited to announce that we now have a BiggerPockets Money newsletter. If you want to subscribe to the newsletter, please go to biggerpockets.com/money newsletter and subscribe. Alright, we’ll be right back after this. Welcome back to the show. Okay, so in the 10 years that you have been retired, have you ever taken the full 3.25% out or even gone up to 4%?

Mark:
No.

Mindy:
Wow. And do you feel restricted in any way?

Mark:
No, because I think, like I said, I retired at 50, I could have retired at 42, 43, so I had it more than I needed, I guess you would say. So the portfolio is sizable enough that even at a lower withdrawal rate, I live a very, very comfortable life.

Mindy:
So you now draw down from your investments. What does that process look like? Do you sell every January 2nd? Do you sell quarterly?

Mark:
Actually, I have about a 10 year runway of cash, but it’s still only an 80 20 portfolio. But again, because it’s overfunded and I live at a, like I said, I live at a comfortable level, but it’s not some crazy extreme amount. Maybe by some people’s terms it would be, but not by my terms or certainly the New York City type terms. But I pay myself a paycheck out of the cash amount that’s in the portfolio. And actually looking at the portfolio now, because again, not only did I not have a bad sequence, I had a really good sequence over the last 10 years. So I mean that’s helped a lot. And the income that the portfolio generates between dividends and interest actually exceeds what I spend in a year. So effectively I don’t ever need to sell anything.

Mindy:
Well, you need to start spending more

Mark:
Apparently. And I’m working on that. We can talk about that. I hate, by the way, I’m flying first class to economy and back. You can join me on United. I changed to United from Southwest.

Mindy:
I can join you. You’re going to pay for my ticket?

Mark:
No,

Mindy:
Then I’m going to stick with my ticket on Southwest. Okay.

Mark:
It was an inexpensive flight. It wasn’t that bad.

Mindy:
Yeah. Well, I hope you enjoy your very luxurious first class trip. Let’s talk about this cash buffer as you draw down from it, it’s just in cash.

Mark:
It’s in treasure bills.

Mindy:
Okay. As you pull out of that, do you replenish it?

Mark:
I don’t need to because the dividends and interest, so I do not reinvest dividends on my equity holdings. So those just come in and the interest on treasury bills just comes in.

Mindy:
What is the interest on treasury bills? Right now

Mark:
It’s about four and a quarter right now for very short term treasury bills.

Mindy:
Okay. And what does very short-term treasury bill mean?

Mark:
Zero to three months. Like one to three months.

Mindy:
Do you take money out at the beginning of the year? Do you take it out quarterly?

Mark:
Yeah. Interesting. So from my brokerage account, I have money that’s transferred to my checking account on a monthly basis. So effectively I’ve created my own paycheck.

Mindy:
How did you transition from saving for retirement to spending

Mark:
In what way?

Mindy:
Well, and you didn’t hear about the fire movement until after you were retired. A lot of fire adherence are super savers. They just save, save, save. They don’t spend very much until they reach financial independence and then you kind of have to flip that switch. Did you have a switch to flip or were you always comfortable spending?

Mark:
Fortunately, I had a fairly decent income for most of my career. And even though I was saving 30%, I still had a decent amount of spending. And again, you don’t drive cars on a racetrack if you’re not spending money. So I was comfortable spending in certain areas, but not all areas. So we would spend where it made sense and we had a decent house, we had nice vacations, so spending wasn’t really a challenge, but having that decent savings rate allowed us to not worry. It allowed us to accumulate wealth over time. And so even though I guess I didn’t have a challenge spending money per se, but I’ve had more of a challenge in spending what I can logically spend today. That’s been more of the recent challenge. And it’s kind of like if you don’t fly first class, your inheritors certainly will. Right? So I’ve been telling myself that every time I book a first class ticket, although Katie, my daughter is coming on some of these trips and we are both flying first class,

Mindy:
How do I get adopted? Don’t you want another daughter? Mark, what is the biggest difference between what you thought retirement was going to be and what reality is?

Mark:
So I guess this kind of goes back to one of the things I learned about being financially independent was it’s not about the money, it’s about the time freedom. And I’ll give you two examples. One is my father had cancer in 2018 and his treatments weren’t going well. He decided not to get treated anymore and went into hospice. And this was in early 2018, and obviously I was retired, and I just told my wife and daughter, I said, I’m buying a one way ticket and I don’t know when I’ll be back. And so I was there for the entire period of his hospice. And at that moment I realized financial independence is not about gaining a lot of assets. It’s about having the freedom to do things like that and be where you need to be at the time you need to be there. And then my wife ended up getting cancer in 2019, and for two years she was going in and out of treatments and so forth.
And again, I was able to be there 100% of the time. And she even said at one point, she’s like, I am so glad we’re financially independent because you can be here the whole time and you’re not worried about somebody calling you at work and saying, we need you here. We need you to be doing this. I was 100% focused on her treatments and hoping that she was going to get better. Unfortunately, she did not and passed away in 2021. But I realized that is the power of financial independence, not what it can buy us.

Mindy:
That’s such a powerful statement. And I think that there’s people who are not really in the fire community, maybe they’ve discovered the fire community, they’re like, oh, that’d be great to be a millionaire. That’d be great to quit my job. I hate my boss. And it’s not this realization that you are now able to do the things that you want to do or be where you need to be. I think you said it so well, and I appreciate you sharing that story. So that retirement has changed a lot then for you from when you first retired?

Mark:
Oh yeah. I mean there’s definitely been phases of it. And even after my wife passed away in 2021, that’s really when I think got very involved in the fire community. And it was about the community, not about the money aspects. I’d already figured all that out, but it was more the social aspects. I mean, I could have been just one of these people that their wife passes away, they just sit on the porch or sit in their house and don’t do anything and become depressed. And one of those statistics that the spouse passes away shortly after the other spouse, well, the financial independence community enabled me not to be that person. And it was interesting that, well, I met Amber Lee Grant in 2019 when my wife first was diagnosed with cancer because we had to go to Denver for seven weeks and the next day basically is what they said, you need to be in Denver for the next seven weeks for treatment.
And fortunately, one of us were working, so we were able to do that, but we didn’t have a place to stay. So we reached out in the Choose Fi Denver group and just said, Hey, we need a place to stay. And the outpouring of support was just phenomenal. It brings up emotions every time I think about it. And Amber Lee was one of the people that wrote back and just said, Hey, I have this Airbnb that I’m going to start putting out there, but I won’t do that if you need it. And so we went over there and we met, and that’s actually how the whole fin talks thing started was just conversations that we were having. We actually went to a campfire in 2019. My wife went as well. She was healing from her first bout with this cancer. But then in 2021 after she passed away, Amber Lee called and many people in the community and kind reached out and she said, Hey, I’m going to be speaking up at Camp five Midwest.
I think it would be really good if you came up there and get out of the house, come on up and support me too speaking. And was a little nervous about it. And I was like, yeah, that’s great. I’ll go up there. The person I sat next to in the little circle when you introduce yourself was Jordan Grumman. I mean, you couldn’t imagine a better person to be sitting next to when you’ve just lost your spouse. And that was a really, it’s almost like fate or whatever. It was just a coincidence that we were sitting next to each other. But that was super helpful. And then actually I went to another chem phi, had a good experience at that one. Went to another one after that in Southwest a few months later. And again, Jordan was there and he came over and was like, how you doing? And so you could see this community is, it’s something that’s not like other communities. I don’t know how to describe it. But since then I’ve kind of immersed myself and been to a lot of events. But that was also the Southwest meetup was when the fun bucket actually came about because I was staying at Kevin’s house and we talked until three in the morning about how we’re not spending any of this money and how do we do this? And that was actually when the Fun Bucket was created. And 2021 right before MFI Southwest,

Mindy:
We had to take one final ad break, but we’ll be back with more after this. Thanks for sticking with us though. I definitely want to talk about the fun bucket. I tease it in the opening, but I want to highlight the personal finance community, the word community. Yes, there’s money talk at meetups, but you can go an entire meetup or an entire Camp Phi without talking about money once. It’s the community aspect that is so important in this experience because whatever you are going through, somebody else has already gone through it and has gotten on the other side of it and can give you advice and is happy to do so. And it’s money related. It’s personal related. It’s kid related. I’ve had talks about child rearing at campfires, and I was thinking, I was toying with putting in, if you’ve been to a campfire, you’ve met Mark at the beginning of the show because yeah, you are at, I mean, you go to all of the events. So let’s talk about this fun bucket. I know Kevin sometimes calls it a different rhyming F word, but for the sake of this show, we’re going to call it the fun bucket. What is the fun bucket?

Mark:
So the way it came about was I was at his house, and this was in 2021. So let’s see, that’s almost what, six years into retirement. And he was asking what some of the same questions, what do you draw down? How much do you draw down? And at the time, I think I was averaging less than 2% a year. And he said, well, you need to take some of that icing off the top, move it over into a fun bucket. And I’m like, what are you talking about? He’s like, you are so far ahead of where you could have been if you were drawing down at the 4% rate. And with a normal sequence of returns, we’ve had these good sequences, you are drawing down far less than you could. You need to learn to turn up the dial a little bit in his vernacular, turn it up to 11 and learn to spend some of this money.
And the best way to do that is just to take some of it off the top, move it over into a separate account as if you’ve already spent it, and allow yourself to spend that money no holds bar. So if you do things that you wouldn’t ordinarily do, and I also belong to this rock retirement club, and we’ve talked about that in that club, and it’s kind of overcoming the frugality mindset because I was still always trying to travel on points or for free or wouldn’t buy the extra drink at dinner or whatever. And so taking some baby steps in allowing yourself to spend, and some of the things might be like hire a cleaner if you don’t, instead of cleaning your own house or upgrading to economy plus instead of economy or first class or whatever. And so the fun bucket, the idea was the money is over on this separate account and literally I have it in a separate online savings account labeled fun bucket. And I allow myself to do things that I might not have ordinarily agreed to because I would’ve been like, well, I don’t know if it does it fit into my budget. I’m not sure. And now it’s like, well, the money’s sitting there. That’s what it’s for. Say yes. So I went to Bali for the last two years. We’ve done a whole bunch of super high-end cruises in the last couple years. Whenever there’s a five event that I want to go to, it’s not a question of can I? It’s just, yeah, sure, let’s do it.
And then I reimburse myself from the fun bucket. That’s the idea. And what I have found is that I frequently don’t even have to reimburse myself. A lot of these things are fitting within my normal kind of paycheck anyway, not the really big expenses, but some of the smaller ones, like upgrading a seed on an airplane, typically it fits within my budget anyway, but because there was money set aside for that potential spend, it’s easier to just say, well just do it. So that was kind of how the fun bucket came about.

Mindy:
So do you feel like you’re missing out on anything? Do you feel like, oh, I would like to do this thing, but I can’t because I’m unsure about spending money or I don’t want to pull out of my portfolio?

Mark:
Not anymore. Not since I had have the fund bucket. I’ve not had to have that concern because it’s well funded at this point. So I don’t really have to at this point. It’s more of is there space on my calendar to do stuff.

Mindy:
We are recording this on March 17th. We have been having a bit of a market downturn. It is actually a little difficult to keep up with just how far the market is down right now. The last time I looked, it was up like 400 points. It had dropped, I don’t know, a thousand last week. How has the recent market downturn affected your mental status with regards to early retirement?

Mark:
Yeah, it doesn’t bother me at all because I think being an older person, I’ve been through this quite a few times, and also managing money during those periods of time, these slightly more volatile periods. And again, I mean the market is down approximately 10%, which is just a normal correction. I mean the NASDAQ’s down 13%, but it’s still not even a bear market, which would be 20%. These are very normal occurrences in the equity markets. This is not something that I worry about in any way. I think it’s actually kind of funny that people are talking about it. And I think the reason people have been vocal about it is, well, certainly there’s some political uncertainty with the new administration and everything that’s going on. So that raises people’s uncertainty, I guess you would say, or concerns. But we also just have not had a 10% correction, which literally happened multiple times a year in history, but we have not had one for a very long period of time.
So for very new investors, this is something new to them. They will learn that this is kind of a normal occurrence and nothing to be concerned about. And the bigger ones are when you have periods of time, like the lost decade of the two thousands where the market didn’t do anything. And somebody even asked me, did that delay your retirement? And I said, actually, I think it might’ve accelerated my five portfolio. And here’s why. Because I was an accumulator during that 10 year period. I was constantly saving and investing during that period. So when you are in the saving and investing mode, in fact, you should cheer for markets to go down because you’re buying at that time when you want markets to go up is when you are actually going to tap your portfolio. But in the interim, you would rather have a flat or even down market as an accumulator than an upmarket. So the people who are accumulating and have a very long timeframe should actually be happy that the market is going down.

Mindy:
So this is great for people who have a long-term to retirement. What about people who retired yesterday, retired last week, retired last year?

Mark:
Well, that’s why I think when you get to a point, and I did not do this and I got very lucky, so I was 100% equities all the way up until the day I retired. Now, that could have gone very bad if I had a bad sequence starting the day I retired, I got very lucky. I would say in hindsight, it would’ve been much smarter to have had a runway of cash or cash-like investments somewhere in the neighborhood of five years prior, or at least start building that five years prior to retirement. And then with the ultimate goal of having somewhere in the neighborhood of five years of cash in retirement. So that’s why, I mean, I’m overly conservative and have the 10 years, but I think five is certainly sufficient. And then you don’t have to worry. I do not worry about where my paycheck is coming from. If the markets were to go down or sideways for even a decade, it wouldn’t bother me. But if you’re 90% equities or a hundred percent equities, that’s a real problem in retirement. So you do need to think about having a more conservative portfolio to some degree in retirement. So where that retirement paycheck is going to come from, so you don’t have to worry about it.

Mindy:
Did I hear you say you have an 80 20 portfolio?

Mark:
Yeah.

Mindy:
Okay. So 80% equities and 20% bonds.

Mark:
Well, short-term treasuries.

Mindy:
Okay.

Mark:
Which is, well, it’s even less volatile than bonds themselves.

Mindy:
Why do you choose treasuries over bonds?

Mark:
Well, because I like the idea that it is not going to fluctuate. It will fluctuate from the standpoint of the interest rate environment, just what it will pay. But the principle isn’t going to fluctuate. So right now, earning four and a quarter percent, I’m happy with that. I don’t have to worry about any volatility in the fixed fixed income side having a higher equity exposure than many retirees might. They might be more like 60 40. I’m much more comfortable having a higher percentage of equities, but offsetting that with a very kind of, you never want to use the word guaranteed, but principal protected fixed income portfolio of short-term treasuries and money markets.

Mindy:
So again, what I’m hearing you say, mark, is that you made an educated decision. You didn’t hear it from your best girlfriend the other day over ice cream, and you’re like, oh, you know what? That sounds like an interesting idea. I’ll do that. You knew what you were getting into. You understood the investment vehicle.

Mark:
Yeah, I kind of came about it two ways. One is you can come at it from how many years of cash do you want, and then therefore, what is that in a percentage of portfolio? You can also do I have a retirement plan and you can do the whole Monte Carlo and say, what is the success ratio of the plan based on different asset allocations? And then I have been, Warren Buffett has been kind a mentor to me, not personally, but just I’ve been an owner for a Berkshire Hathaway since the late nineties, and he talks about the 90 10 portfolio. I don’t know if you’re familiar with that, but he talks about, for my wife, after my pass away, the recommendation to the trustee is 90% in he says s and p 500, or he has later said, or total stock market and 10% short-term treasuries. So I used that as a baseline as well. And I said, okay, well why the 10% in treasuries? Why the 90% equities and what does that mean? And I said, I get it. And I’ve looked at some research papers that go through that, and actually it’s a very logical approach, but I just said I feel a little bit better just having 80 20 than 90 10, but 90 10 would work as well.

Mindy:
What do you do for healthcare, mark?

Mark:
So I’m on the A CA. I have attempted to get a subsidy, but every year my income has kind of gone through the level where I can get a subsidy for a couple of reasons. One is the year my wife passed away, I ended up doing very large Roth conversions because I was still in the married following joint category the following year. I was considered a surviving spouse. My daughter was a dependent, so I also did very large Roth conversions before I dropped to the single tax bracket. And then I sold my house, which doesn’t help. I had some capital gains there. So this may be the first year I get a subsidy, but I’m not too concerned about it because the healthcare cost really isn’t that significant in my mind.

Mindy:
That is one of the biggest questions that I get is how am I going to provide for healthcare for me and my partner, my family, whatever their makeup is. And I have also been on the A CA and not found it to be a difficult experience to navigate. If you are finding it difficult to navigate, I would absolutely recommend an insurance broker because the site can be a little bit confusing. I did end up going with an insurance broker because I was looking for a specific doctor to be covered by a specific type of plan, and she was able to help me find that in a way that I was not able to do. But yeah, I don’t find the a CA to be all that difficult.

Mark:
Actually thinking back, so when my wife was diagnosed, she ended up getting laid off from her job, which is a whole nother story. I won’t go into that, but she was let go, and we ended up going on Cobra, which was very expensive through her employer in hindsight. And then later switching to the A CA after, I think it was about 12 months or something like that. Even though we could have gone for 18 months, I think it just worked out that we did 12 months. In hindsight, we should have just switched to the A CA right away. It would’ve been actually less money.

Mindy:
Yeah, Cobra, I think there are very specific circumstances that Cobra makes sense, but Cobra’s usually really, really expensive because you’re paying all of the employer subsidized costs as well as all the ones that you had. And it just always feels like it’s two or $3,000 a month. For Cobra.

Mark:
Yeah, it was like 1800 a month. And then when we went on our own, it was like a thousand a month or something.

Mindy:
Mark, what do you do all day when you’re not gallivanting around the world?

Mark:
Good question. Lately I’ve been nesting. I’ve been working on this house, you’ll have to come over and see my landscaping. It’s almost all in.

Mindy:
Ooh, yes, I would love to.

Mark:
So lately it’s been some of that and I get up, I like to still like to read the Wall Street Journal every day and I exercise. So that’s my mornings pretty much. And then I try to always have at least one thing on my calendar that I feel like at the end of the day, I’m going to be glad I felt like I was productive. So I do have this podcast that I do, so that takes up some times in the week, and then there’s a lot of travel still involved. I do still have a little foothold in Crested Butte, so sometimes I’ll go back there. This past weekend I was skiing there. So your time definitely gets filled up even in retirement, so it’s not a hard thing. And then with this community here in Longmont, there’s always something to do. So never a challenge of having something to do every day.

Mindy:
I really am sometimes very surprised when people say, oh, I don’t want to retire. I dunno what I would do all day long. I look at my husband, I look at everybody else in the PHI community locally, and I say none of them had time to have a job. Now they’re constantly doing, they’re constantly active. Longmont is a great city to be retired in. There’s always people that are not working during the day that can go and hang out and do whatever it is that you want to do.

Mark:
Yeah, I would a hundred percent concur with that. And that’s one of the reasons I wanted to move, because in my other town that I lived in Crested Butte, it’s a very expensive town. So people are having to work multiple jobs and no one was ever available. And that’s the benefit of being here now, is everyone’s available, or at least everyone I know is available. So there’s plenty of opportunity to do things with people. And I think what I have found in this retirement period is the money side. We kind of figure out relatively quickly for most of us, but the social side is really where you should be focusing on making sure you’re complete in this kind of retirement period.

Mindy:
Yeah, absolutely. The retiree who retires and then passes away is doing that mostly because they don’t have anything to do. They sit, they’re sedentary, they are not out there having these relationships and doing these things and that, I mean, typically they’re older, but if you don’t know what you want to do when you retire, start making a list. Carl and I spoke recently with Justin Peters who talked about making a bucket list and starting your bucket list. Now make your bucket list, add continually, add things to it, but also start going through your bucket list and checking things off. So the journey is enjoyable as well as once you get to retirement, you’re used to doing things. So now you say goodbye to your job and you do these things full time. Mark, this was so much fun today. I always love talking to you, and thank you so much for joining me. Where can people find Mark’s Money Mind?

Mark:
Yeah, so on any of your podcast players, Mark’s Money Mind usually comes out about once a week, but usually when I’m traveling, sometimes I miss a week or here or there. I’ve been back now. So hopefully back to a regular schedule and or Marks money mind.com is also where you can find me.

Mindy:
Mark, thank you so much for your time today and my viewers. If you like this video, please give it a thumbs up and don’t forget to subscribe to this channel for more inspiring fire videos, just like Marks. This is Mindy Jensen signing off.

 

 

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Have high interest rates and home prices affected your ability to buy cash-flowing real estate deals? If you’re struggling to find properties that pencil out, you don’t want to miss this episode. If there’s anyone who can teach you how to find great deals, even in this housing market, it’s today’s guest. He wrote the book on it!

Welcome back to the Real Estate Rookie podcast! Today, we’re joined by fellow investor, On the Market co-host, and author of Real Estate Deal Maker, Henry Washington. Given today’s difficult market conditions, is Henry pivoting to another investing strategy? Nope! He’s sticking to “boring,” single-family and multifamily properties that he either rents out to tenants or flips for a profit. But he is changing how he analyzes deals, and he’ll show YOU how to do the same in today’s episode!

Stay tuned if you want to know how to buy your first or next rental property in 2025. Henry will show you the four-step approach he uses to find undervalued deals today and how to buy discounted properties from builders looking to move old inventory. But that’s not all. You’ll also learn how to fund these deals using small local banks, retirement accounts, and other people’s money (OPM)!

Ashley:
With today’s challenging market, many investors are wondering if cashflow opportunities are still out there. Our guest today has not only built an impressive portfolio from scratch, but continues to find creative cashflow strategies even in 2025.

Tony:
Now, whether you’re working a W2 job or investing full-time, our conversation today will give you practical insights on how to adapt and thrive in the current real estate landscape.

Ashley:
This is the Real Estate Rookie podcast, and I am Ashley Kehr.

Tony:
And I’m Tony j Robinson. And to give me a big warm welcome to none other than Henry Washington. Henry, what’s up brother?

Henry:
What’s up guys? How are you?

Ashley:
Good. Thanks so much for coming on today. You’ve built an impressive real estate portfolio when you actually started this, when you had a full-time job in the tech industry. So can you walk us through your journey from employee to investor?

Henry:
Yeah, yeah. I was designing software and doing data analytics, and one thing I realized was I made good money, but I was bad with money and I was okay being bad with money, but I got married and my wife was not okay with me being bad with money. And so I had to figure out a way my solve at the time was figure out a way to make more money and then I can still be bad with money, but I’ll have more. So that’s what got me started looking into real estate. And then as I started to research about how to get going, investing in real estate, a lot of the information I was reading was telling me I had to have some money saved up and I started to save 10% of our income. And so the journey of real estate started to help me learn that I needed to be better with money.
And that’s, so that was what led me down the path to wanting to do it. The next thing I did was I just surrounded myself with other investors. I didn’t know how to do it. And the industry is like the space is crowded with people who want to teach you how to do this. Now, it wasn’t like that seven, eight years ago. There was some people out there for sure, but online education wasn’t as widely accepted. And so I just wanted to learn from people who were doing it in my backyard. So I started going to every real estate meetup I could find, and strategically I would place myself in front and center of the room so that I could meet all the people who were confident in actively doing deals so that I could just be annoying enough that they would want to help me.
So I would just really and say that differently. I would just try to sit by people who were doing deals and figure out ways I could try to help them and if I figured if I could help them with something that they would just naturally want to help me. So that was one of the ways that I got into the space and learned. And the next thing I did was I’m just a really big believer in you get what you give in this world. If you want something, you got to give it. And so I just started telling everybody I was an investor because if I didn’t believe I was going to be one, who else was going to believe me? So all of those things kind of help position me to be ready for my first deal when it came.

Tony:
And as we think about that first deal, Henry, because you said that you weren’t great with money when you started, you started saving money up. So how did you actually fund that first deal?

Henry:
Well, I didn’t fund it. The way we funded the first deal was, I mean, frankly, we used my wife’s 401k, but we were married, so it’s like our 401k.

Ashley:
Are you in a 50 50 state where if you would’ve gotten divorced, you would’ve got half of it anyways or

Henry:
Yeah, yeah, yeah, it would’ve been fine. So yeah, no, we borrowed against my wife’s 401k, so which turned out to be really good at the time because it was 2017, so we bought a property that cash flowed, we were able to raise it to market rents, and we were getting enough cashflow that it even covered us paying back the payments for the 401k loan. So essentially our tenants were paying off our loan. We used to borrow the money.

Ashley:
Henry, can you kind of describe that process of borrowing from your 401k? What is that actually and how do you do it?

Henry:
Yeah, so 4 0 1 ks, right, retirement savings that you have through an employer, typically there’s two ways to get access to that. Well, three ways to get access to that money. One is retire at the appropriate age and then get access to it. Two is you can cash it out before retirement age and that involves you paying lots of penalties and fees and taxes, so it’s very expensive to cash it out. You lose a lot of about half your money is going to go to penalties and fees. And then the third way is you can borrow against it. So since it is your money, most 401k plans will allow you to borrow your own money. So you can borrow percentage of it, I believe it’s like you can borrow up to 75% or something like that. Don’t quote me on that, but you can’t borrow all of it. And then you have to start paying that money back with interest. So you get a payment monthly payment that you’re paying that money back with interest, but it’s your money. So that interest goes back into your 401k account and typically your employer will deduct the payments from your paycheck, so it’ll come out of the money that you’re making from the job.
And so we elected to do that plan. It gave us access to the cash fairly quickly, and because we knew we were buying a deal that was going to yield a better return than the interest it was costing us to borrow the money. And so essentially it was like arbitrage.

Tony:
I love the idea of leveraging the 4 0 1 KI leveraged, and Mindy and I have talked about this from the money podcast about just leveraging your stock portfolio to do that as well. You’ve got enough, you can do it that way also, but do you feel that that’s a strategy that maybe still makes sense today? Say someone does have a good amount of money in their 401k as we go into 2025 and beyond, is the 401k loan still viable?

Ashley:
Well, not after the stock market just tanked.

Henry:
Well, you just won’t have as much to borrow. You just won’t have as much to borrow.

Tony:
That actually brings a really good point because I know for the stock loans that I had, you have to keep a certain margin between the balance of the loan and the value of your portfolio. And if the stock market ever fell to a certain point, you would actually call a portion of your loan due to make sure that you stay within that threshold. Do you know if it’s the same with the 401k loan if the stock market tanks?

Henry:
I do not know if it’s the same with the 401k loan, but it wouldn’t surprise me if that’s the case because like I said, they’re only giving you access to a portion of the money. And so that portion may shift depending on how well the stocks are not doing. But I am not an expert on that. Is it a viable strategy? Yeah, it’s a viable strategy. I think viable and achievable are two different things. And so what I would caution people is the only reason this worked for me is because I bought a really good deal. I bought a house that was valued at $175,000 for $115,000 or 116, something like that. So I knew that if worst case scenario happened, I could literally do nothing, stick that house back on the market as it sat and sell it for one 40 through 1 55. I could sell it under retail value in its current condition and make a profit.
I had a viable exit strategy if something weren’t to work out. If I’d have got into this and realized I didn’t want to be a landlord, there’s a million things that can go wrong. And so where I think this strategy is a problem for people is if you go and buy something that is not a good deal and you end up over leveraged because if that asset is not producing enough income for you to make your payments back, you are now having to pay to feed your property and then having to still make payments on your 401k loan because you still have to pay that money back whether you go buy a house with it or not. And so if you take that money, go buy a bad deal, and now you’re having to feed your deal, you still got to make that payment. So the goal is can you do it? Yes, absolutely. You can do it, Tony, but you got to be sure you’re buying a good deal. You need a deal that has at least two exits so that if you’re playing A doesn’t work, you can execute on the plan B and save yourself.

Tony:
Amber, you actually wrote the book or one of the books on finding and funding deals for BiggerPockets. So for any of our rookies, you want to check that out, we’ll link to it in the description of this video. But Henry, you are an expert real estate investor and we definitely want to get your insights on finding cash flowing deals today like in 2025. It is a little bit of a challenging market and we want to know whether or not investors should maybe be pivoting. So we want to get your insights on that, but we’ll do that right after afterward from today’s show sponsors. All right, let’s get back to our show with Henry. So Henry going into 2025, what is your strategy when it comes to investing in real estate and have you had to pivot at all due to the current marketing conditions like interest rate and rising property prices

Henry:
Overall strategy? I have not had to pivot. So I tell people I’m a boring real estate investor. I don’t do any of the crazy cool fun stuff. People want to buy apartment buildings on creative finance or they want, I buy single families and small, I fix ’em up. I either rent ’em out or I sell ’em. That’s it. And I buy it traditionally with either a small local bank or some sort of hard money or private money, and then I’ll refinance them into 30 year fixed DSCR loans. This is real estate investing 1 0 1 I’m doing, I don’t got no fancy boutique hotels like Tony, I’m just boring. I’m boring, boring real estate, but that’s cool. That’s fine for me, my lane. And so has that changed or am I pivoting? No, I’m not pivoting in the overall strategy. What is changing is the underwriting and your underwriting always has to change.
The market is ever shifting, right? Markets are cyclical. And so we as investors have to figure out what it is in our underwriting that needs to change to suit the new market. So yes, interest rates are air quotes, higher America is seen higher interest rates before, so I don’t think they’re terrible. A lot of people think they are. We were just used to between two and 5%, and so now we see a six or between a six and an eight and people are freaking out. I don’t think it’s that bad. We do have this whirlwind of factors that we’ve never seen before in real estate. We’ve never had a time when we had all time high interest rates in our lifetime, all time high prices in our lifetime. And also we’re starting to get all time high taxes and insurance. It’s all rising. And so that group of factors hasn’t all really hit us in the face at the same time.
And so the challenge that happens is, yeah, I can still buy properties at cashflow. I’m just going to have to buy them with more margin. I’m going to have to buy them for a lower price point. And so the problem isn’t can I find deals that make sense? I can find deals that make sense. The problem is I’ve got to make a whole lot more offers to get to the same amount of deals that I’m used to doing because now I’m offering less than I typically would, and not every investor is their underwriting. So I’m competing with people who are probably willing to pay more, which means I get my offers accepted less frequently, so the volume has gone up. So to answer, the long-winded answer to your question is I haven’t changed much. I underwrite a whole lot more conservatively. I’m planning on buying it cheap enough that the higher interest rates don’t bother me and the higher expenses don’t bother me, and I can hold that property longer if I’m going to flip it because things aren’t just flying off the shelf in the first 30 days anymore.

Ashley:
So Henry, when you’re purchasing a deal, are you right away saying, this is going to be a rental, this is going to be a flip, or are you underwriting for both options?

Henry:
I underwrite for both. I typically underwrite everything as a flip because I have the biggest margins as a flip, and so I know if it works as a flip, most of the time in my market it’ll work as a rental. That’s not going to be the same thing in every market. Like in Seattle, you can’t underwrite it as a flip and hope it works as a rental. The margins are too different. But here, median home price is like 300 and something thousand for starter homes are going for two 50. So retail value. So if I can underwrite something as a flip nine times out of 10, I can make it a rental if I need to. So I underwrite everything, flip.

Ashley:
What are your expected margins? Just to kind of give an example of you, Henry, a successful investor right now, what is the profit you are looking to make on a flip to make it worthwhile and what is the cashflow you’re looking for on a rental property too?

Henry:
Okay, I’m going to answer this question a couple of ways. So I’ll give you an example of a deal I have under contract right now that we’re closing on Friday, so you can get some real numbers and then I’ll tell you typically how I want to do for a flip, and then we’ll talk about the rentals. So the deal I have under contract right now, I’ve got a house under contract. I’m paying 90,000 for it, it’s going to need 40 to 50 in a renovation, and we’ll sell that one for two 50.

Ashley:
Wow.

Henry:
So decent numbers.
What I typically look for when I’m going to flip a house in a profit is I want to make what I put into it, I want my risk and reward to be fairly equal. So if I’m going to do a deal where I got to spend a hundred thousand dollars on a renovation, I want to make somewhere between 80 and 110, 120 on the sale. If I do a deal where I’m going to put 30 in it, I’m okay making 30 on the deal, right? Typically that’s going to be a cosmetic in and out super fast. So I’m okay making around 30, but that’s kind of my baseline when I’m underwriting a deal. Now, obviously those margins, I’m okay shifting them depending on where it is. If it’s a property in a great area and I know it’s going to sell super fast and I’m super confident in it, I may be willing to make less profit because I’m confident and it’s like a basic layout. We know the layout’s going to sell, but if it’s a property in a tough part of town or it’s got a weird layout, I’m going to adjust that to where I want my profit to be higher for me, taking on more risk.

Ashley:
Henry, I really like how you answered that question because a lot of people would’ve answered that I look for 50 to 80,000 per deal without giving any context as to how much capital you’re putting into the deal. You actually set it in a way that made it comparable apples to apples so someone could understand how much of your own risk, how much capital you’re putting into the deal for it to actually be worth it instead of just saying, oh, on average I’m looking to make a hundred thousand dollars, and there could be somebody who’s dumping 200,000 into a property and they’re making a hundred. Or it could be somebody who’s, oh, I don’t put any money in. I get 100% financing and I’m making a hundred thousand. So I really like how you phrased that for us there. Now what about the rental side?

Henry:
On the rental side? So we have to caveat, I know this is rookie podcast, but I am not a rookie, so what I’m willing to make on a rental is a whole lot different now than it was when I was a rookie. So I’ll caveat that and then I’ll talk about what I think a rookie should look for. What I am looking for is if I can find a house or small multifamily in an appreciating market or neighborhood that I’m walking into equity, meaning let’s say ARV on that property is $350,000 and I’m buying it for 175, right? 200. I’m walking into equity on day one, and that property is net positive cashflow, conservatively underwritten, meaning everybody is like, oh, the property is going to cashflow. I’m paying 200,000. I’m going to get 2200 in rent, and it’s got positive cashflow. No, right? I’m talking if I am conservatively underwriting, meaning my rents are going to cover my mortgage principal and interest, my taxes, my insurance, my vacancy, because I’m going to always account for at least 5% vacancy plus 10% CapEx and 5%

Ashley:
Repairs and maintenance,

Henry:
Yes, repairs and maintenance. If I got 30% on the expenses conservatively and it’s net positive cashflow after that, then to me that’s a buy all day long. I don’t care if that net cashflow is $10 or $200 or $300 per door because at this point, the value of walking into equity, the ability to have a property that I’m going to be able to do a cost segregation and offset my taxes because I do flip houses, and that’s heavy short-term capital gains that I need to offset. The other three ways that real estate pays me is far more important to me than the two, three, $400 of monthly cashflow that it produces every month. That is the least important part of how that real estate pays me right now. As long as that property is in an appreciating neighborhood is in good shape or will be in good shape after I renovate, because like I said, the cashflow is the least important. Now, if you are brand new, that’s not something you can do. You’re not there yet. I have a portfolio of other cashflowing assets that are doing great, but you should underwrite your deals for significant cashflow. If that property was going to make two, $300 a door, then I’d say that person should probably buy that property. If that property was going to break even then that rookie should not buy that property,

Ashley:
Especially if you don’t have hefty reserves in place and depending what your reasoning for investing in real estate is too. So if you want to accumulate units to quit your day job, you’re going to have to buy a lot of units to make up that 5,000, 10,000 whenever you’re making a month if you’re only getting that little cashflow.

Henry:
I have two brand new houses, new construction houses that I bought in 2024. Those houses, they retail for 2 25 each. I paid one 70 for each of them. They’re brand new, so no maintenance is needed. I walked into equity on day one. They rent for probably, it just depends on the tenant at the time, but I’d probably say I either break even or I have to feed that thing 50 to a hundred dollars a month considering the hold I have on the expenses. I would buy that again all day long because technically my maintenance is pushed out. I still budget for it as if I’m paying it every month, but technically it’s pushed out probably five to 10 years brand new construction. But I was able to do a cost segregation study. Those properties probably saved me $25,000 each of my taxes, plus I walked into 50 grand of equity on each one, which I can now go get a line of credit on and use it to buy more property. Plus the tenants are paying down the debt on that property. And so that’s an example of a deal that maybe doesn’t net me the ideal cashflow every month, but still makes sense for me to buy at this stage in my investing career.

Ashley:
So let me ask you, because we’ve been hearing about this more and more purchasing new development for rental properties, did you get any incentives from the builder upfront, like a lower interest rate or great lending terms or seller credits? We’ve had a couple of guests on that talked about when you go new development that there’s motivation from the builders to give you these incentives.

Henry:
Yeah, no, I didn’t really get anything. We did get some seller credits, but that was just, we were legally finagling the money so that I didn’t have to bring money to closing. But this situation was this builder so said differently. I guess the answer is yes, because the builder was selling me the properties for one 70 even though they were worth 2 20, 2 25 because he had much bigger developments in the works that were sucking up all of his cash. And because interest rates were rising, he was having a hard time getting those done. And so he was dumping knees to grab some of that cash to go take care of what he needed to take care of in his other developments. And so I was able to walk into a really good deal because the developer had bigger fish to fry because of some of the things that you talked about.
And I think it’s a great point because yeah, if you think about right now and in our current political climate, tariffs are going to drive the cost of materials up, meaning it’s going to be more expensive for developers to build new homes and make a profit. And if deportation causes problems with labor and they’re having to take longer to fix or to finish these properties, they may be willing to take some concessions to get some of these properties sold or pre-sold and off the books. And so it wouldn’t hurt to go talking to a developer and seeing if you could negotiate yourself a deal.

Ashley:
Okay, I am going to do it.

Tony:
I think that raises my next question, Henry, is was this opportunity just listed on Zillow and it was like, Hey, here are two new developments for sale. I guess the bigger question is, where are you going today to find these good deals that you’re adding to your portfolio?

Henry:
That particular deal came through a local real estate agent. The builder had them listed at retail, but I had basically told the agent, Hey, this is what I would take for ’em if you know anybody that can get it done quick. And so he just reached out to me. But how I’m finding my deals right now is still the same way I was finding my deals before. We’re going direct to seller either via direct mail or my website. And what I found most recently in the past probably 90 days, my website has been generating more leads than before than it has on average before. And so people are looking to get out of properties right now if that’s what that’s telling me. And so direct to seller I think is still a great way to get ahold of some of these properties for the simple fact that if you’re going to go on the market or if you’re going to go through a wholesaler and buy off market, you’ve got a middleman to pay. And remember we just talked about you need to get these things and underwrite at lower prices to protect yourself. And when you’re paying a middleman, you’re taking away some of that money that needs to go in your pocket for you to be buying a safe investment. So going direct to seller is going to save you some money and hopefully allow you to find those deals.

Tony:
What strategies are you seeing to really drive traffic back to that website? Is it just word of mouth? Are you doing PPC? What strategies are you leveraging to actually get people onto that website and filling out that form?

Henry:
Yeah, we do pay-per-click for sure. And so we’ve got a company that builds the ads and manages the ad campaigns for us, not cheap. It is not cheap to do this by the folks. This is not how I would start unless you have a healthy budget for your marketing.

Tony:
And that’s what I was going to ask because you could go the route of a wholesaler and obviously they’re going to make their assignment fees and whatever deal they send to you. And there are some investors who were like, man, I hate paying assignment fees because it’s like, man, I could have got that deal myself, but I think people, but you didn’t understand exactly. They don’t understand the work that goes into actually doing that. So if you were starting today, Henry from scratch, what do you feel would be your most effective way to get an off market deal?

Henry:
Okay, if I was starting today from scratch and I needed to find a deal, the first thing I would be doing is A making sure everybody that could hear me or see me or see anything that I do know that I was buying, where I was buying and what I was buying. So I’d be putting a post on Facebook every week. I’d probably put a post that says, Hey, I’m Henry. I’m looking to buy houses in X, Y, Z markets. I’ll pay you a $500 finder’s fee if I buy something you send me. That’s going to help you generate your leads for your business, not just leads for deals, but whenever I do this, contractors are reaching out to me saying, Hey, I don’t have a house you can buy, but if you get something, I’d like to bid it. It’ll help you get contacts for private money.
Maybe somebody you like know or trust is going to see that you’re doing this and say, Hey, well, I got some money I’d like to put to work. Let me know what your next deal looks like, where I get leads for everything in my business just by putting those posts out there. So I would schedule a post once a week on social media, on Facebook and LinkedIn specifically. Those are typically where you’re going to get the most traction with this kind of a post. And then I would start collecting names and email addresses of contacts for contractors, lenders, and all the leads that come through. That’s step one. Step two is I would go and I would go to every real estate meetup that I could, and I’d specifically be looking for new wholesalers that seem hungry, not the person that’s like, yeah, I think I want to get into wholesaling.
I heard you can make some quick, no, you’re looking for the person that’s new, but sounds very serious about it because when you’re a new wholesaler, it’s hard. You’re competing against other people. But what wholesalers have is a budget for marketing because if you’ve got a wholesaler that’s got a budget for marketing and they’re going to market for deals and they know they’re going to have to assign those deals, well, I would be trying to figure out, all right, well, how do I go partner with this person to have him send me or him or her send me those leads when they get them so I can take them down and maybe I can talk them into partnering with me on them, or maybe I can talk them into giving me some exclusivity on those leads, getting first look at those leads. So I’d find out all those new wholesalers, if you’re a new wholesaler, you’re trying to make money, and if you can find somebody who is going to be a buyer for you out of the gate to help you offload those first few deals, that’s super helpful and powerful for them.
So I’d be connecting with as many new wholesalers as I could and taking ’em to lunch and just trying to build that relationship so that when they get those leads, you can get a look at those leads and try to take down a deal that way. And the next thing I would be doing is pulling a list of every single property that’s within your buy box. So if you know you want to buy single family homes, less than four bedrooms, less than 2000 square feet in certain parts of town, whatever your buy box is, your criteria is I would narrow down that criteria I’d get on realtor.com and Zillow and build that list criteria. And then I’d be looking for anything that’s in that list criteria that’s been on the market for 30 days over the average days on market in your market. So you need to do some research.
If the average days on market and your market is 60 days, you need to be looking at anything that’s 90 days or older. If the average days on marketing your market is 30 days, you need to be looking at anything that’s 60 days or older. And I would literally make an offer on every single house that comes up in that list, search at 50% of what they’re listed at. I wouldn’t walk them, I wouldn’t do anything other than say, what’s 50% of RV or what’s 50% of their list price? I’m making an offer at that because if you get somebody that responds and says, a counter offer, well now you can go look at that property and you can make an actual real offer. But what you’re doing in that space is you’re playing the numbers. You’re hoping that somebody because of this economic climate needs to sell and is struggling to because it’s been listed for too long and maybe they’re willing to play ball. And so that’s just like a shotgun approach you can take to make offers on several deals on the MLS right now. So that’s three things I would do if I was brand new that don’t cost me anything but time.

Tony:
I’m so glad I asked that question because those are all just fantastic strategies, and especially on the last one of just offering whether it’s 50% in Henry’s market or 70% in Tony’s market, or 65% in Ashley’s market, just make the offer because I still think that we’re in a really kind of interesting point in the real estate cycle where I think sellers are finally starting to understand they don’t have the same leverage they had before. And it really does feel like it’s shifted towards a buyer’s market, and you can offer significantly below asking price and actually get a response. Maybe they counter and maybe you end up getting the deal. So I think once interest rates fall to a certain point, whatever that point is, we don’t know is it 6%? It’s at five point a half percent, but they’re going to fall once they get to a certain point that’s going to unlock a lot of buyer demand.
And when that happens, it’s also going to unlock a lot of competition for investors like us. So if you can get in now where rates have come down, right? They’re not at like 8%, right? We’re like in the sixes right now and the high sixes, but if we can act while there’s less buyers, it’ll be easier for us to have those kinds of conversations with sellers. So dude, I love that advice, man. Hey, we have to take our final ad break, but we’ll be right back after this. Now while we’re gone, make sure you are subscribed to the Real Estate Rookie YouTube channel. If you haven’t done that yet, head over to youtube.com/at realestate rookie. We’ll be right back afterward from Marshall Sponsors,

Ashley:
Welcome back from our short break. So Henry, last week, Tony and I put up an Instagram story on at BiggerPockets rookie. So if you’re not following us there, go check it out. And we asked people if they had any questions specifically for you. So we received a lot of questions, but there was one that continuously people were asking multiple times, and this question was how do you get your significant other onboard? And at the beginning of the episode, you kind of teed this up perfectly. You mentioned that you used your wife’s 401k, so I’m assuming she was on board with your idea from the start, but can you maybe give some advice to our rookie listeners?

Henry:
Absolutely. How do you get your spouse on board? So this is really advice for anyone with anything. We have to talk to people in the what’s in it for them, because that’s how people listen. They listen to hear Why is this or how is this important to me? And so I teach people this all the time. If you’re a new investor and you’re dealing with a real estate agent and you want that agent to work with you or work for you, or maybe submit an offer that seems like they might not want to submit whatever it is that you need that agent to do, what do agents want? Agents want their commission and they want to get it hopefully as fast as possible. So speak to them in the what’s in it for them. Frame your conversation around how your offer or whatever it is, is going to help them get to their commission and get to their commission faster.
If you’re working with a wholesaler, same thing. Frame your conversation around what you’re doing or what you’re asking or what you’re providing is going to help them get to their assignment fee faster. Speak to people in the what’s in it for them. So when it comes to your spouse, nobody knows your spouse. Hopefully nobody knows your spouse better than you do. So speak to your spouse and the what’s in it for them. Some people’s spouses are going to be very focused on the financial security aspect. So how can you frame the conversation around why you’re doing this to show them how it’s going to bring more financial security to them? Some people’s spouses, like my spouse, she already understood real estate investing. She had uncles and grandparents that had been in the game before.
What’s in it for my spouse at the time? Were a couple of things. One was we were trying to get to a home that we could be comfortable in. We had bought a starter home and we knew we needed to upgrade a couple of times before we were going to get to the home where we could spend a significant amount of our life in it. And so I said, the way I spoke to the What’s in it for her was I said, okay, look, I know we’re trying to get from here to our essential air quotes, dream Home. I said, there’s two ways we can get there. We can get there by continuing to work hard, get raises and promotions until we can upgrade out of this house into our next house and then continue to work hard and get raises and promotions until we can get there.
And I estimate it’s probably going to take us somewhere between five to seven years on that path for us to get to be able to afford the kind of home that we’re looking for. I said, or we can go this real estate investment route and we can try to house hack where we can buy a property, live in one of the units, rent the other unit out, and then that savings and what we would be paying in rent or a mortgage. We were paying about 1200 bucks a month in a mortgage, and we were able to get down to where we were only having to come out of pocket about $200 a month by house hacking. And so we were taking that additional thousand dollars a month that we were used to paying, and instead of just spending it, we put it in a savings account for 12 months.
So 12 months is $12,000. You live there two years as $24,000. So we live there two years, saved up 24 grand. We ended up renting out that property that we were living in, and we used that 24 grand as part of our down payment for the house that we could afford to live in. And then as we rented out that other unit, it was able to then start producing cashflow, which allowed us to pay part of our mortgage at our new property. And so essentially what I pitched to my wife was, I can get us here in seven years on raises and promotions, or I can get us here in two years and have a property that pays for a portion of our mortgage once we get there and we won’t have to save for a down payment. She said, well, that sounds like the plan we should do.
So speaking in the what’s in it for her helped her to get more on board. So the first thing I’d say is, what’s in it for them, your spouse? And then paint the picture of what you’re doing and how it helps meet the needs of the person that you’re talking to. And if you can’t find anything that meets the needs of the person that you’re talking to, maybe this isn’t something you should be doing. Maybe you need to be doing something else. And the other thing is, oftentimes people, spouses, they feel like their spouse doesn’t trust them on this, and maybe that is or isn’t true, but I would argue that if they don’t trust you and you’re in a normal loving relationship, there’s probably something that you’ve done that’s brought on that feelings of doubt. And so I would take a long hard look at you and make sure that when you say something to your spouse, when you make a promise to your spouse outside of you being a real estate investor, that you follow up on that, don’t say, I’m going to go to the gym five times a week and then give up on it every second.
Don’t say, I’m going to do something for the kids and then not do it. Don’t say, I am going to take on this responsibility, take out the trash cleanup and then not follow up on it. Sometimes it’s the little things that we do that lead to the doubt creeping in over time. And then when it’s time for us to go take action on some of these bid things, we’ve kind of crushed that trust over time, and sometimes we need to rebuild that.

Ashley:
Yeah, that’s such a great point as to figuring out if there is a doubt, what that doubt is, and kind of trying to rework that so it’s solving that problem as to why they have those doubts. So we had a ton of other questions, but we’re really short on time. But there was one specific question that I actually thought, this is actually interesting. And it was somebody from James Danner’s team that submitted this question, and the question was, Henry looks great and purple curious as to why he chose purple as his significant color.

Henry:
We would’ve never bought that first deal without her letting us borrow that money from the 401k. I would’ve never started investing in real estate had she not picked me off the ground and kicked me in my butt and told me to go do what I said I was going to do. A story I don’t tell very frequently is not long before I actually was going to get started. I had run into somebody who I looked up to and was telling him about all this. He was an investor as well, and he basically said, Hey, man, you don’t have any money. You don’t need to be in this business without some money, so you need to not do this and go figure out how you can make some real money and then get into real estate investing. And I kind of took that to heart and I was discouraged and I was like, no, he’s probably right. And so she kind of was like, no, you said you’re going to do this. Go do it. You made a plan. Go execute on your plan. So without her, I wouldn’t be here at all. So when it was time to pick a logo and a business, the only thing I could think about was something that relates to her. Well,

Tony:
That is a damn good story.

Ashley:
It was Amanda that asked that question, and I think she’s going to love the answer even more than she expected to after hearing that. Well, Henry, thank you so much for joining us today on The Real Estate Rookie Podcast. Where can people find out more information about you?

Henry:
Yep. Best place to reach me is at Henry Washington on Instagram at the Henry Washington on Instagram, or you can check me [email protected].

Ashley:
I’m Ashley, and he’s Tony. Thank you so much for joining us today. We’ll be back with another episode of Real Estate Brickie.

 

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This Trending Now story features the most-saved bathroom photos uploaded to Houzz between Dec. 15, 2024, and March 15, 2025.

If you’re looking for bathroom remodeling inspiration, you’ll find plenty packed into this countdown of the 10 most-saved new bathroom photos uploaded to Houzz so far this year. Take note of creative tile patterns, welcoming wood vanities, uplifting green and blue elements and stylish shower-tub combos.

Dave Fox Design Build RemodelersSave Photo
10. Winsome With Wallpaper

The slanted ceiling in this Columbus, Ohio-area bathroom is high — at its peak, perhaps twice the height of the floor to the top of these arched medicine cabinets. To give this wall visual interest all the way up, Dave Fox Design Build Remodelers covered it in a textured wallpaper. The paper’s rosy taupe color shares warm undertones with the brass fixtures and contrasts nicely with the blue-gray double vanity.

Find a pro to help with your kitchen remodeling project

Alicia Torosian DesignSave Photo
9. Tantalizing Tile

Each element of this Orange County, California, bathroom designed by Alicia Torosian offers a little something special. Torosian, who uses Houzz Pro software to manage her business, chose a subtle checkerboard pattern of tumbled marble tiles for the floor. The walls have zellige tiles, but instead of the common stacked-square pattern, Torosian set them in alternating rows of vertical and horizontal tiles. The custom vanity has a reeded detail just below the counter’s rounded ogee edge, and the sconces flanking the curvy mirror feature jewelry-like chains.

See why you should hire a professional who uses Houzz Pro software

NW Roots ConstructionSave Photo
8. Twice as Nice

A pair of textured and tassled shower curtains frames the shower-tub combo in this Washington state bathroom by NW Roots Construction and Whitestone Design. It’s a simple, relatively inexpensive design trick that elevates the look and offers a bit more protection to the sage-green vanity. Other soft and slightly playful details include scalloped wall tile in the shower, butterfly knobs on the vanity and a scalloped mirror.

Shop for your bathroom

7. Soak It In

Cassaia Studio designed this bathroom in a North Dallas house remodeled by Spruill Homes. The wood double vanity has a lower bridge section that serves as a dressing and makeup area, with a drawer and a spot for a stool underneath. The tile floor has a herringbone pattern that leads the eye to a soaking tub, which sits beneath a large picture window with soothing leafy views. A Roman shade offers privacy, and watery aqua tiles both protect the wall and splash it with color.

Che Bella Interiors Design + RemodelingSave Photo
6. Looking Up

Che Bella Interiors Design + Remodeling was tasked with retaining this St. Paul, Minnesota, bathroom’s vintage charm while giving it a fresh look and better function. Its approach included preserving special original features, including the striking arched detail above the tub alcove, and adding new elements with a similar spirit, such as an an alabaster ceiling light and a custom walnut vanity with antique glass knobs that nod to the room’s original green glass doorknob. Modern features include braided chevron recycled-glass floor tile, vertically stacked green wall tile and a medicine cabinet with built-in power outlets and lighting.

7 Exciting Design Trends for Kitchen and Bath Products in 2025

5. Green Space

Fittingly, this green-tiled bathroom is in a new house built with an emphasis on biophilic design and sustainability. Northern England interior designers at Making Spaces stacked the tiles vertically for a contemporary look and contrasted the cool green with soft brass-toned plumbing fixtures. A minimalist wall-hung sink, barely there glass shower panel and curbless shower entry contribute to the lean and clean design.

Sweenor Builders IncorporatedSave Photo
4. Lighting the Way

This Charlestown, Rhode Island, bathroom — in a modern-coastal home constructed by Sweenor Builders — has a moody look in this photo. But it benefits from strategically placed lighting, including three large sconces flanking the mirrors and what appears to be an LED strip beneath the long wood vanity, an especially helpful feature at night. A small ceiling light in the shower accentuates the vertical offset-pattern wall tiles, which have an earthy texture and greenish-gray color.

Shop for bathroom vanities on Houzz

Changras & Frey Construction Inc.Save Photo
3. 3-for-1 Deal

In a remodeled Los Altos, California, home by KNR Design Studio and Changras & Frey Construction, this bathroom features wall-to-wall wood cabinetry packed with function. One side is a single vanity with ample drawer storage. The other is a lower-height dressing and makeup area with a stool. And in between is a capacious storage tower with smart access from the sink side. A mirror with sconces mounted right through it fills the wall space above the counters, which adds to the clean, cohesive look.

New to home remodeling? Learn the basics

The Design ShopSave Photo
2. Organic Luxury

Hutch-like his-and-her vanities are mirror images in this luxurious Frisco, Texas, bathroom by Samantha Bailey of The Design Shop. Custom-made of white oak, they have allover reeded detailing and are topped by 4-inch marble countertops. A glass enclosure separates them and the sealed concrete floors from a wet room clad in marble and zellige tile and anchored by a large acrylic soaking tub.

ODS ArchitectureSave Photo



This article was originally published by a
www.houzz.com . Read the Original article here. .


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Over the past month, I’ve decided to make a big move that will greatly affect my real estate portfolio. This was a decision I made after seeing severe weakness in the market and realizing it was time to put my money where my mouth is. For months, I’ve been talking about the “upside” era strategy of real estate investing—the theory that now is a great time to buy as real estate is primed to experience significant upsides in the future, making investors rich. I’m doubling down on this due to market volatility—and in today’s episode, I’m sharing exactly where I’m putting my money.

I made a move that most investors would caution against, but I ran the numbers (many times) and am confident in what I decided to do. Part of my plan is to move money out of riskier assets with potentially lower returns and into assets that I’m confident will generate stronger returns. This is something EVERYONE (yes, even you) should be thinking about NOW to build long-term wealth in the future.

I’ve got two places I’m planning on putting the money from making this move. One will allow me to capitalize on future real estate deals, the other will guarantee me a minimum of a 6.5% return—and that’s just the floor of the return. I’m putting the “upside” strategy into play now, and if you’re feeling the same way about the economy as I am, you should, too!

Click here to listen on Apple Podcasts.

Listen to the Podcast Here

Read the Transcript Here

Dave:
I’m making a big change to my investing portfolio. I’m selling stocks and I’m doubling down on investing in real estate, but probably not in the way you think. A few months ago, at the beginning of January, I explained my upside era framework for investing in 2025. It’s all about finding deals that work pretty well today, but have the potential to really grow and dump rocket fuel on your portfolio over the next couple of years. And today I’m going to share my upside era Q2 update, including some moves that I’m making myself based on everything that’s happening in the economy right now. Because as you’ve probably heard, there’s a ton of volatility across stocks, crypto, and almost every other asset class. But personally, I see opportunity to take advantage of these conditions using real estate investing. And today I’ll explain how I’m personally doing that right now.
Hey everyone, it’s Dave Meyer, head of Real Estate Investing here at BiggerPockets. Welcome to today’s show. If you’ve been listening so far this year, you’ve probably heard me talk a lot about what I believe is a sort of new reality in real estate investing, which I am calling the Upside era. And if you want to get the full framework that I am using to describe real estate right now and to describe my own deal decision making, you could check out Show 10 66. It aired on January 6th, 2025, and it goes into deep detail about everything I’m thinking about. So if you missed that episode, I just want to keep listening to this one right now. Here’s the gist of the framework and how I’m thinking about things from 2013 to 2022 is what I call the Goldilocks era. It was basically this perfect conglomeration of conditions that made real estate investing really attractive, relatively easy and super successful.
These are things like prices going down during the great recession. While rents kept growing, we had low interest rates and by 2013, lending activity had started to resume. So it was pretty easy to get a loan and buy properties at a relatively good price, and that continued for like 10 years and a lot of people got really wealthy and it was great for the entire real estate investing industry. Then as we all know, 2022 hit interest rates started to skyrocket and we have experienced what I would consider a correction or a recession in real estate. And I want to be clear that I’m not saying that prices have gone down or crashed. I think there’s some confusion when I say sometimes that there’s sort of a recession in real estate because the word recession and what I am describing right now really describes the overall economic activity of our industry and that indisputably has gone down from 2021 to 2024, we saw nearly a 50% drop in the number of homes that are bought and sold.
So just by that measure alone, we have been in a recession. We’ve also seen largely prices have slowed down a lot, they’re still growing, but they’ve slowed down a lot. Rent growth has slowed down below long-term averages and in a lot of areas and a lot of asset classes they have actually declined. And so it’s been a really tough couple of years in the entire real estate industry in 20 23, 20 24, and obviously the second half of 2022 as well. But now as we turn the page and go into 2025, I think we are entering a totally new era for real estate investing and it’s what I call the upside era. And I want to be clear, and I think this is really important, that this new upside era has a lot of great opportunities and there’s going to be great ways for real estate investors, large, small, inexperienced, super experienced to profit and benefit from this new era, but it is going to be different from previous era.
It’s not going to be like it was from 2013 to 2022 when everything was just super obvious and kind of easy. Instead, you’re going to have to be a little bit more creative and I think look a little bit further into the future to understand how to generate the best returns. Alright, so that is my overview of the Upside era and as I mentioned at the top of the show, what we’re going to go into today is some moves that I’ve personally made in my own portfolio to take advantage of this new era and the opportunities that are going to be present and profitable going forward. So before I explain though what I’ve actually done in the last couple of weeks, I want to sort of give you an insight into my strategy and this framework that I’ve been using for deal selection. So my personal strategy in the upside era is to find deals that make sense today.
I don’t want to have anything that’s losing money. I want them to be able to break even within the first year of ownership. And I know that break even doesn’t sound like the most sexy thing, but let me just explain to you why I think about this way. First and foremost, I am not talking about that social media break even where people just take their rent income, subtract their mortgage payment and say that’s cashflow. That’s not it. Real breakeven, you have to be talking about CapEx, maintenance turnover, cost vacancies. So I’m saying that you break even and still generate actual positive cashflow after properly accounting for every expense and maintaining a cash reserve. And if you are able to do that, even though it doesn’t sound as sexy as what a lot of people say their deals are, I still think this is actually better than a stock market return because let’s just say breakeven, you’re getting a 1% cash on cash return.
Five years ago, no one would buy a 1% cash on cash return deal, but in this upside era, I’ll tell you why I would at least consider it. I’m not saying I would buy anything that breaks even. Lemme just give you an example. If you were to generate a 1% cash on cash return, that’s a bit of a return, great. But then you probably get two to 3% return just from amortization that’s paying off your loan. Then if you get appreciation even of 2% with leverage, that can be another three or 4% upside and return on your investment. And then tax benefits are usually another 1% return as well. So when you put all those things together, you’re talking about a seven to 10% total return across your entire investment. And that’s not cashflow. I wanted to make that clear. That is a combination of building equity and cashflow and tax benefits, but when you look at that return profile, I think it’s at least as good or possibly better than what you get in the stock market because if you look historically, the stock market returns somewhere between eight and 10% annualized return.
So we were talking about just a break even real estate deal doing as well as the average stock market year. And this is what you have to be comparing your deals to because yeah, this might not be as good as it was in 2015, this perfect Goldilocks golden era of real estate, but as a real estate investor, you need to be thinking about resource allocation and where you are putting your money. And frankly, none of us can put our money into a 2015 real estate deal. You could either put your money in a savings account, you could put it into bonds, you could put it into crypto, you can put it in the stock market or you can put it into private real estate. And so I encourage you, whether you make the same decisions as I do or not, those are all subjective, but I really encourage you to think about your investing decisions this way.
Where are you going to put your money today to best improve your financial future? Do not be comparing today’s real estate deals to historic deals that may never be coming back. So that is the first part of the framework. So don’t get me wrong, I’m not saying just go out and buy any sort of break even deal that is just the first criteria for deals that I’m looking to buy. It has to at least break even because that sets my floor the minimum for my investment is probably doing about as well as the stock market give or take a couple of points. And it also obviously depends on how the stock market performs that year. But then the second part of the framework is really the important, and I think the exciting part is where you need to identify two or three, what I call upsides per deal that could take these average breakeven deals from solid and on par with the stock market to excellent and something that is going to outperform the stock market well into the future.
Because yes, I do want my deal to do as well as the stock market in year one, but let’s be honest, real estate investing is more work. It’s more stress than owning stock and buying an index fund. And so I need parts of my deal to offer upside far and away above what I am earning in an index fund. And that’s why I need to look for these two or three upsides. And just as a reminder, some of these upsides are basically ways that I can take that seven to 10% return and turn it from something that’s easily a 12 to 15% return. And these are things like investing in the path of progress, looking for zoning upside where it can add a unit, add a bedroom, add an A DU. This is things like finding places where there are supply constraints and rents are likely to go up.
These are all different upsides. And when you look at the framework altogether, if you can find a deal that is breakeven and then you have two, three, maybe even four of these sort of little bets that you are placing on your property, if one or two of those bets come true, then you’re going to take this from an average real estate deal to a great real estate deal over the course of several years. And although this might sound a bit different than how other people invest, this is kind of how it’s always worked, right? You are always trying to find deals that are going to grow and improve over time. I just think it’s particularly important right now in this upside era to set your expectations appropriately for what deals are going to look like when you buy them and then calculate how the return is going to grow over time and focus on that because real estate investing frankly just is a long-term game and that’s how you really need to be thinking about it in today’s day and age. Alright, so that is the upside error and the recap of the framework that I am personally using. And we do have to take a quick break, but when we come back, I’m going to share with you the moves that I personally made in Q1 to set myself up for even more upside in Q2 and beyond. We’ll be right back.
Welcome back to the BiggerPockets podcast. We’re here today talking about the upside era and before the break I sort of did a recap of the upside era and my framework for buying deals here in 2025. Now I want to provide you just with a personal update and how I’ve been thinking about my own portfolio, the moves that I made back in QQ one and the moves that I am intending to make and how I’ve set myself up for growth through the rest of 2025. So Q1, I’ve been working on one bigger deal. I am doing a live and flip, which I’m super excited about, but I’m not going to get too much into that today. I’ve made some offers on a couple of rental properties, but I haven’t been able to pull the trigger on any of that yet. But I did make a big move in Q1 that I think is going to really set me up for success for the rest of 2025.
And I want to share it with you because I think it explains several of the different ways that you could earn returns in the upside era and how I’m thinking about positioning myself for the long term. And I think some of the ideas and concepts that I use to make this decision and to make this move could helpful to you. So let’s talk about what I did. And first I just want to say that I want to share this with you in the spirit of transparency, but this isn’t personal advice on what you should do. You got to think about it, your own personal situation, your own risk tolerance, your own asset allocation. But with all those caveats, I said what I did was sell about 25% of my equities portfolio basically meaning my stock portfolio. Now, I did not sell any of my tax advantaged accounts.
I didn’t sell anything in an IRA or 401k. Those are accounts that I intend to keep into my sixties and seventies, not pay a penalty and use that for long-term wealth and my long-term retirement. But I sold about 25% of my normal brokerage accounts. Now, I know that I’m a little bit different than some of my friends that I bring on the show here like James Dard or Kathy Feki who have almost a hundred percent of their net worth in real estate. I am not like that. I estimate that my equities, my stock portfolio is like a third to maybe 40% of my total net worth. And if you do, the math year is say, has sold about 25% of that, that’s like eight to 10% of my entire net worth, which is a pretty big move for me at this point in my investing career.
So the question is then why did I do this? Do I think the stock market is going to crash or what’s going on here? I am not a stock expert. I do follow it pretty closely, but I am not so confident in myself that I think that I can time the market and say when and if the stock market is going to crash. But when I look at the really big picture and I zoom out of everything that’s been going on in different asset classes across the economy for the last decade, the last 20 years, I think that stocks are going to underperform in the coming years. I don’t know if that means there’s going to be a crash and then a rebound. I don’t know if that means they’re just going to grow very slowly over the next couple of years. But when you look at some of the most fundamental ways of valuing the stock market and projecting its performance forward, what you see is that stocks are very, very expensive.
And there are a lot of different ways that you can value the stock market, but two that I personally like to look at, one is called the buffet rule, which is a ratio of the country’s entire GDP to the value of the stock market, the total value of the stock market. And by that metric, stocks are very, very expensive right now there’s another very common way of valuing stocks called PE ratios or price to earnings ratio, which basically compares the price of one share of stock to the total earnings of that company. And if you look at both of these metrics of evaluating stock market or several other of them, they are very, very high. And previous times when we look historically when equities values were this high, the stock market underperformed and in many cases it has underperformed four years and sometimes that’s three years, sometimes that’s five years, sometimes that’s 10 years.
And again, that does not mean the market is necessarily going to crash. It just means we just had two years in a row where the s and p 500 went up more than 20%. That’s amazing. It was great. I was very happy to be heavily invested in the stock market for the last two years, but I just don’t think those returns can be maintained. I think that the best gains have been had, and this isn’t necessarily even a commentary on the economy as a whole, although there is recession risk. Don’t get me wrong. This is just sort of an analysis of previous periods where stock valuations got this high and what happens after. So that’s my look at the stock market. And this sort of relates back to what I’ve been talking about with real estate, right? My philosophy about investing is finding assets that are relatively safe and low risk that have upside.
I just don’t see that much upside in the stock market right now, even if the market doesn’t crash and there has been a lot of volatility lately, but even if the market stays close to where it is, I just don’t see it going up that much more in the next couple of years because it’s already just so expensive. You’re probably wondering, can’t you make the same case for real estate? Real estate is super expensive, right? Well, not really, or at least that’s not the way that I look at it because yeah, real estate is really expensive right now, but it’s due to really different issues. We won’t get fully into that, but if you listen to the show, you probably know that a lot of the reason that real estate is so expensive right now is mostly due to a supply issue. There is a lack of total housing inventory in the United States.
It’s getting even more and more expensive to build, and that has really pushed up real estate prices over the last decade or more. The other thing that changes how you evaluate the real estate market versus the stock market is that housing is a need, right? People need to live in these home, no one needs stock. So when stock market gets volatile or really expensive, people could just sell them without really any implications for their immediate quality of life. That is not true in the housing market. Another factor with the housing market is that 70% of people who sell their homes go on to rebuy. So you wouldn’t just go sell your home because you thought prices might go down a couple percentage points because then you would have to go buy into adverse market conditions instead of what happens in the stock market where people sell off when things get too volatile or too expensive. With real estate, you could just do nothing as long as you’re able to make your mortgage payments, you could just choose not to sell. And so though it makes the dynamics and the fundamentals of the stock market and the housing market really, really different. So to sum this all up, the way I’m seeing it is that there is less upside in stocks and equities right now than I see in real estate. That’s it. We do have to take a quick break everyone, but we’ll be right back in just a minute.
Welcome back to the BiggerPockets podcast. We are here talking about the upside era and how you can take advantage of it here in 2025. So let’s talk about those upsides in real estate that have me excited and making these moves and actually did a whole episode on 10 different upsides that you can use in your own deals. That one came out on January 27th. It was show 10 75, so you can go check that out. But a couple of the upsides that I am personally looking for are one rent growth. I’ve made the case in the past and we’ll continue to that, although I think the first half of 2025, maybe all of 2025 might have slow rent growth. There’s a really good case that rent growth is going to pick up from 2026 going forward. The second is path of progress and building in areas where there is a lot of infrastructure and money being invested.
The third is value add. These are things like doing the burr strategy, flipping or just finding ways to add capacity to homes. The fourth is zoning upside where adding ADUs or additional units on properties and of course other things like owner occupied strategies, which I’m already doing because doing this live and flip this year. So given that and given that I just sold a big chunk of my stock portfolio, how am I going to reinvest that into real estate? Because frankly, the reason that I love real estate and I invest primarily in real estate and that I am making this move is because long-term, my long-term goal is to get enough cashflow that I can live off of. And so whenever I see that there’s sort of an opportunity to reposition some of my money into a asset that is going to build me long-term cashflow, that is sort of what I’m going to do, even if it’s not going to be the best cashflow right now.
But as I said at the beginning of the show, I actually haven’t been able to make any rental property deals work so far here in 2025. I’ve offered on a few, I’ve been looking at a lot. I’ve underwritten quite a few deals, but I haven’t been able to make any work and that’s okay. I don’t like to push it. If the deals aren’t there, I’m not going to buy them. But because I do think market conditions are sort of ripening for better deals to be out there, I’m basically going to split the money that I pulled out of the stock market into two different things. First and foremost, I’m going to take 50% of what I sold and put it into a money market account. If you haven’t heard of a money market account, it’s very similar. He’s a very similar interest rate to a high yield savings account.
There’s some differences that I won’t get into, but basically I can earn four, 4.5% on my money right now, and I like that for two reasons. First is that it is highly liquid if you haven’t heard this term before, liquidity in terms of investing basically just means how easily you can turn an asset or an investment into cash and money market accounts are similar to high-yield savings accounts. You could just easily spend that money. And that is important to me because I am going to be actively looking for deals, rental properties, and I’m actually starting to look at and underwrite multifamily deals right now, and I want to have that money quickly available to me in case that I find that deal, which I expect to find in the next couple of months. I want that money available so that I can act quickly. Yes, in the stock market, you can sell it relatively quickly and you can pull your money out within a week or two, but I don’t want to be in a position where I have to sell my stock on a day that it happened to go down two or 3%, right?
That would be terrible. So I instead chose to sell 25% of my portfolio on an ideal day and then put that money into this money market account so that one, I am earning more than inflation, so I’m still earning a real inflation adjusted return and I have highly liquid assets that I can use to buy real estate deals in the next couple of months. And honestly, a 4% return right now looks pretty good to me compared to how volatile the equities market is. And I could be wrong, the stock market could go up 5%, it could go up 10%, but right now, the risk adjusted return of equities versus a money market account, I’m not complaining about a money market account, especially because it has the secondary benefit of giving me liquidity. So that is the first thing that I’m doing with that money that I pulled out of the stock market.
Now, the second thing I’m doing, and I know this is probably going to be controversial for some people listening to this podcast, but I’m going to use it to pay down my mortgage on my live and flip that I’m going to be moving into here in Q2. I know what people are saying, you should leverage as much as possible or that’s going to slow down my scaling. But just think about it this way, for every single dollar that I pay into my mortgage and I don’t leverage because I would be taking out a mortgage at let’s say 6.5%, I’m basically earning a six point half percent return on that investment. And again, I could be wrong, but I don’t think the stock market is going to get that over the next couple of months. And in the meantime, I can reduce my living expenses by like $1,500 or $2,000 a month.
That is a lot of money that I can be saving, adding to my liquidity, adding to my stockpile of cash that I can use for real estate. And at least to me in my assessment of different asset classes out there, it takes a lot of risk off the table. And to me, it is worthwhile to do this in this investing climate, and maybe I will do this for years if conditions stay the same and I’ll just keep a really low mortgage on my primary residence. But my expectation is that I will probably just refi this and maybe I’ll refi it three months from now or six months from now. It might be years from now, but if rates come down or I see a deal that is better than that 7% cash on cash return, I am getting by paying down my mortgage, I will refi and I will just use that money to fuel my portfolio when I think conditions are better.
So to me, this moves just makes sense. I don’t see a huge amount of upside in the stock market right now, and so I’m taking some money and earning a positive return and giving myself liquidity in order to buy real estate in the second half of the year, and I’m taking other money and just reducing my living expenses, taking risk off the table, and that money doesn’t have to stay locked in my primary residence forever. It will stay in there until I find other opportunities to use that money, whether that’s three months, six months, or three years from now. So personally, that is what I am doing, but as I said at the top, this is based on me, my goals, my current resource allocation, my read of the situation. But the question is what should you be doing with your own portfolio? My first piece of advice is to evaluate the risk adjusted returns of different asset classes yourself.
If you haven’t heard this term before, risk adjusted return, it basically means you can’t just look at the upside potential of every single deal. You also have to look at how risky that particular asset is because this falls on a spectrum, right? On the low end of the risk adjusted return spectrum is probably bonds or money market account, like what I’m investing in right now. These are very low risk, but very low return options for holding your money. On the other end of the spectrum, you probably see cryptocurrency where you have opportunities to double your money or triple your money, but the risk of you losing a lot of that money is also really high. And so you have to sort of look at each asset class, each potential investment in this lens. How likely is it for me to earn a good return? How likely is it that I am going to lose some of my money?
That calculation, that thought process is risk adjusted returns and frankly, figuring out and thinking through risk adjusted returns, it’s not as easy as it used to be five years ago. There’s just no way I would’ve paid down my mortgage instead of buying another rental, just no way. I never would’ve thought of doing it. But today, when I reevaluate risk adjusted returns, it makes a lot of sense. And the reality of this is you really do just have to do this for yourself. There’s no objective evaluation of what the best risk adjusted returns are, right? You might see huge upside in the stock market right now and think that I am crazy to see risk there or risk of underperformance there. That’s totally up to you for me, my personal understanding of markets, my risk tolerance, my risk capacity, my long-term goals, my current cashflow, it’s just different from yours.
And so you need to think about this yourself. The second thing you need to do after you sort of look around the market and assess the risk adjusted returns and different options for your money is to consider your goals. Do you want to be really active in your investments? Do you want to be managing and thinking about your money every day? If so, you could potentially think about reallocating into different asset classes, but if not, if you’re more the type of person who’s said it and forget it, I just want to buy index funds, that’s absolutely what you should be doing. You don’t need to be doing what I’m doing. I’m relatively active in managing my portfolio, and so I am always thinking about these deals. I’m always researching these deals. If this is not something that you do or want to do, then just leave your money and your allocations as they are.
The third and last thing that you should be asking yourself as you’re thinking about how to take advantage of the upside era as we go into Q2 is would you actually do something with the money, right? If you were thinking about selling equities or maybe you’re thinking about selling a rental property or some real estate, think about what you would realistically do with that money. Because if you were going to sell your index funds, for example, and then just do nothing with that money, you’re going to put it in a regular savings account and not earn a lot of money, and you’re just sort of doing it out of fear, you’re probably better off, at least historically speaking, just keeping your money in the stock market and letting it compound over the next several years. But if instead, you’re reallocating because you have a plan to immediately earn better returns, or you want to position yourself to take advantage of opportunities that you see coming in the next couple weeks, next couple months, next couple of years, I think that’s a totally different thing because remember, if you do sell real estate or you do sell stocks, you are going to have to pay taxes on it.
There are repercussions for that. This is not just like, oh, I can take my money out of the stock market, see what happens, and then I’ll just put it back in if it doesn’t work out. I mean, you could do that, but that’s not a good move because you’ll have paid taxes unnecessarily. You have to have a plan for your money. So my three pieces of advice as we head into Q2 in this upside era are, again, one, evaluate different asset classes for risk adjusted returns. And that’s not just stock market versus real estate. Do that for individual real estate asset classes. Think about risk adjusted returns for single family homes versus small multifamily versus flipping versus short-term rentals. And assess if you think there are good opportunities, and if you have the right waiting for where you’re putting your money relative to the second step, which is your goals.
So again, look at those risk adjusted returns, then consider your goals and think about if you have your money in the right place given those two things. And then lastly, really just gut check yourself and make sure that if you are going to make a move, if you are going to reallocate capital, reallocate some of your time in the upside era, make sure that you’re actually going to follow through on it because sort of doing a move like this halfheartedly is probably going to leave you worse off than when you started and just worse off than if you just did nothing. So again, do those risk adjusted return assessments, consider your goals, and then make sure that you actually have a plan to do something with your money. That’s true if you’re reallocating resources or if you’re just trying to put more principle into your overall portfolio here in the upside era.
Alright, everyone, that is my upside era update for Q1 and giving you some thoughts about where I’m going in Q2. I would love to hear what you all are doing with your opportunities for upside as we enter Q2. So if you’re watching here on YouTube, make sure to let me know in the comments. But if you’re listening on the podcast, hit me up on either Instagram or on BiggerPockets and let me know what you’re thinking about. Thank you all so much for watching and listening to this episode of the BiggerPockets podcast. I’m Dave Meyer. We’ll see you next time.

 

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In This Episode We Cover:

  • The big move I made and why I’m cashing out of some investments to fuel others
  • How I’m getting a guaranteed MINIMUM 6.5% return with this big investing move
  • Rental properties I’m looking for right now that have the highest “upside” potential
  • Three things every investor should do right now to ensure they capitalize on the “upside” era
  • Key indicators that the stock market is significantly overvalued (and what I did with my stocks)
  • And So Much More!

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Private residential construction spending increased by 1.3% in February, rebounding from a 1.2% dip in January. The growth was largely driven by higher spending on single-family construction and residential improvements. On a year-over-year basis, the February report showed a 1.6% gain, indicating a modest growth in private residential construction spending during market uncertainties. 

The monthly increase in total private construction spending was primarily driven by gains in spending on single-family construction and residential improvements. Single-family construction spending was up 1% for the month, continuing to grow after a five-month decline from April to August 2024. This growth is consistent with strong single-family housing starts in February. However, single-family construction spending remained 0.1% lower than a year ago. Meanwhile, improvement spending rose by 2% in February and was 8.9% higher compared to the same period last year. In contrast, multifamily construction spending stayed flat in February, extending the downward trend that began in December 2023. Compared to a year ago, multifamily construction spending was down 11.6%. 

The NAHB construction spending index is shown in the graph below. The index illustrates how   spending on single-family construction has slowed since early 2024 under the pressure of elevated interest rates and concerns over building material tariffs. Multifamily construction spending growth has also slowed down after the peak in July 2023. Meanwhile, improvement spending has increased its pace since late 2023.  

Spending on private nonresidential construction was up 2.5% over a year ago. The annual private nonresidential spending increase was mainly due to higher spending for the class of manufacturing ($10.5 billion), followed by the power category ($6.4 billion). 

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Oro Coast BuildersSave Photo
After: To make the most of the space, the firm used a partial wet-room layout. This meant placing both the shower and tub within an enclosure. The enclosure has two glass panels with a door in the center. This allows the entire bathroom to enjoy the natural light from the wet room’s window.

“We wanted to elevate the space as much as possible with elements like a freestanding bathtub and a large vanity,” Fishman says. Looking into the shower, a striking marble-covered wall steals the spotlight. The marble also provides an elegant backdrop when the homeowners are looking in the vanity mirror across the room.

“We used this plaster on the walls throughout the house,” Fishman says. “They provided a jumping-off point for the bathroom’s palette.” The plaster honors the Spanish Revival architecture and adds texture, depth and an organic feel to the room. “In the shower, there’s a layer of waterproofing under the cement, then the plaster, then a sealer,” Fishman says. This product is similar to tadelakt, a waterproof Moroccan treatment.

Browse bathtubs in the Houzz Shop

Marble: Stoneland USA; plaster: Tonachino Firenze by Meoded Paint & Plaster



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After a period of slowing associated with declines for some elements of the residential construction industry, the count of open construction sector jobs remained lower than a year ago, per the February Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS).

The number of open jobs for the overall economy declined from 7.76 million in January to 7.57 million in February. This is notably smaller than the 8.45 million estimate reported a year ago and reflects a softened aggregate labor market. Previous NAHB analysis indicated that this number had to fall below 8 million on a sustained basis for the Federal Reserve to feel more comfortable about labor market conditions and their potential impacts on inflation. With estimates remaining below 8 million for national job openings, the Fed, in theory, should be able to cut further despite a recent pause. However, tariff proposals may keep the Fed on pause in the coming quarters.

The number of open construction sector jobs increased from a revised 242,000 in January to 264,000 in February. This nonetheless marks a significant reduction of open, unfilled construction jobs than that registered a year ago (429,000) due to a slowing of construction activity because of ongoing elevated interest rates. The chart below notes the recent decline for the construction job openings rate, which is now back to 2019 levels.

The construction job openings rate edged higher to 3.1% in February, significantly down year-over-year from 5%.

The layoff rate in construction stayed low (1.8%) in February. The quits rate was flat at 2% in February.

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Julie Rose “semi-retired” at just 36 years old with only $500K, trading her corporate job for sunrise safaris in Africa, beach walks in Bali, and mid-day hikes in Mexico.

With “Barista FIRE,” you can retire with a lower FIRE number, still work (minimally) doing what you love, and have almost complete time freedom over your life. Why have FIRE when you can “semi-retire” decades earlier? Plus, your retirement nest egg will be growing in the background, all while you do what you want, when you want, with who you want. Sounds like a dream life, right? Well, you’re not far from it already!

After barely scraping by (even with a good job), Julie knew something needed to change, but she wasn’t ready for it. It wasn’t until she got laid off multiple times that she realized it was time to put her financial future in her own hands. This led her down the FIRE movement rabbit hole, getting almost addicted to saving and investing, and finding herself in a position to quit her job and do what she really loves: travel and get PAID to plan trips for others.

Now, she’s Barista FIRE (FIRE with the help of a side hustle), living nomadically for a fraction of the cost of a basic life in the United States!

Mindy:
Imagine swapping your morning commute for a sunrise hike in Mexico, or typing from a Beachside cafe in Bali effectively making retirement happen decades ahead of schedule. After strategically building her financial foundation, Julie did exactly that. She achieved barista fire in 2021, that sweet spot where she’d saved up enough money to work minimally while her investments grew. Now living a nomadic life most only dream about she’s sharing how she finances, her freedom, handles healthcare on the road and finds purpose beyond traditional careers all while her wealth continues to grow in the background. Hello, hello, hello and welcome to the Bigger Pies Money podcast. My name is Mindy Jensen. Scott’s out playing hooky today, but he’ll be back next week. I am so excited to welcome Julie B. Rose to the podcast. She has an incredible financial independent story and we will cover it all in today’s episode. Julie, thank you so much for joining me today. I’m so excited to talk to you.

Julie:
I’m so excited to thank you for having me.

Mindy:
Before we dive into your nomadic lifestyle, what was your relationship with money growing up?

Julie:
Growing? I think I had a fairly normal relationship and education about money in terms of what they tell you in high school about don’t overdraw your checking account and this is how to do a basic accounting spreadsheet. My parents kind of taught me to track, save some of your money, pay off loans as quickly as you can, but we never learned anything about investing. We never learned anything about maximizing. We kind of followed that same track that the rest of Americans have been told to, Hey, you should buy a car as soon as you can because freedom, and I spent my money a bit foolishly growing up, but I thought, you know what? I’m pretty smart. I’ll just save a little bit. But as we all know, saving is not really the best way to make your money grow, so I really had to teach myself a lot about money in my later adulthood, I suppose my thirties and the rest of us, we’ve been pretty self-taught because the high schools don’t really do it justice.

Mindy:
They really don’t, and we are starting to see more and more bills that are coming into legislatures that are being passed saying, yes, we should give our high school students financial education, but I have a high school student myself right now, she has to take a half a credit to graduate. That’s not enough in my opinion. It’s a start. It’s a great start, but it’s not enough. We could do better.

Julie:
Yeah.

Mindy:
What was your financial position leaving college?

Julie:
My dad, my parents helped pay for my college and I paid for I think about half of it, so I didn’t come in with any college loans. I didn’t come into my first job with any loans, but I sure came in with a big car loan.

Mindy:
Oh

Julie:
Yes. Like everybody else. I’m like, Hey, I made it. I got my first job. I’m making $33,000 a year. I’m going to buy a new car that was $22,000. Right. I’m going to get my own apartment that costs $750 a month, and then of course I had insurance and all my essential bills, and I get to that job and then I get my first paycheck and I’m like, wait a second. What’s fica? The math doesn’t math.

Mindy:
The math doesn’t math.

Julie:
I had to get a second job, even though I theoretically had made it out of college into my first professional job, I had to get a second job working two jobs out of college just to pay for life,

Mindy:
And that unfortunately is not even a unique story. I hear that all the time. By the time I got done with my paycheck, there was no money left and I still had more bills, and that is really disappointing. So what was your career? What did you study in college?

Julie:
Yeah. My first career was journalism, so I started in the newsroom. I actually went to a school that was really well known for the journalism program and I was really active in it, and once I left college, I had the fortune of being hired right in a market 15 newsroom, which most new graduates have to start in a small to medium market. I started in a large market. I started as a producer, so I skipped the intern or the associate, and so theoretically I had a great job, but it was 33,000 a year at the time, and I couldn’t afford everything else because I had that in my head, Hey, I made it. I can now spend accordingly, and it just doesn’t work that way.

Mindy:
How long did you work the second job? How long did you have two jobs for?

Julie:
Oh, let’s see. So I actually, it’s a little bit unique. This was during the great recession, so I was laid off from my news job after about a year and a half, and luckily I had that second job working at a fitness club opening up the cafe at five in the morning. So I had something to do during this layoff, and yay, I had about two weeks of severance. But the realization that that could happen to me really shook things up for me, and it didn’t take me that long to find another job. Actually, that’s what moved me to Phoenix is I got a job offer out in Phoenix for luckily more money, but it really shook me that, Hey, your job is not guaranteed and it could be snatched away from you in an instant, and if you don’t have any buffer, if you don’t have any preparation, if you don’t have any financial landing pad, you are relatively screwed. And so I actually had to move back home with my parents for a little bit during this little period of underemployment until I got to Phoenix to start my new job.

Mindy:
I’m sad that this was your experience, but I’m also really glad this was your experience because a little foreshadowing, it sounded like this turned you in a different direction. What did you do with this realization that your job isn’t secure?

Julie:
Well, you’d think I would’ve got the message the first time around because I went to Phoenix and I got a pay increase, and I’m like, whoa, yay. Life’s back on track. I only had a little bit of a blip and I can keep spending, and so I was stuck in that consumerist mindset and buying things like new clothes every month and still paying for my nice car, and you just get, oh, there’s Pampered Chef and there’s Leah Sophia, and there’s all these stupid shopping trends, and there’s a little bit of the, as you’re in your twenties and your friends are moving ahead in their career and you want to give the impression that you’re moving ahead in your career, so look at the new stuff I bought and look at the parties. I’m throwing the dinner parties and look how I’m moving up in the world.
I felt that pressure a lot. And so I look back now with a whole different lens of like, oh my God, what was I thinking? Those were thousands of dollars that I had spent on stuff that sat in my cabinets and closets that could have contributed to my financial freedom much, much sooner. But that’s the trap that commercialism has set for us. So I was on that path for quite a while, changed a couple jobs, kept on earning more, but it wasn’t until my next layoff that I think it all really sunk in. And during that layoff, I was actually unemployed for five months. Luckily I had four months of severance. So with that buffer, I thought, Hey, I’m going to do something useful with this time because when else am I going to get a paid vacation of this length? I went backpacking in Europe for a month.
It changed my life. I lived out of a backpack, just a carry on backpack, and I walked everywhere and I took buses and I was super frugal, and I realized, whoa, I really have way more junk than I’ve ever needed. Why do I have all this stuff in my house weighing me down? Why am I working and living this life that I get so much more life and energy from traveling and discovering and being curious and learning? Maybe I should refocus that energy. And it was during that experience, during that layoff that I started cooking up a plan and I didn’t really know what I was cooking up yet, but what it started as, Hey, for one, I got to get my life together. I have to get my finances together. I never want to be in a position of financial insecurity again, and I want to work towards a life that truly makes me shine, allows me to shine and have my truest self come out and follow my heart. And four and a half years later, I hit the road.

Mindy:
When did you discover the concept of barista fire or the concept of financial independence in general?

Julie:
It was after I got back from that trip, during that layoff period, and as I was starting my new job, I had decided that, Hey, my financial education is not what it should be. I don’t really know what I’m doing. I had been like, oh yeah, I contributed the company match for a little while and I put it in this and that, and I just kind did what I was told when I was clicking through buttons, but I really didn’t know what I was doing, and I think I had heard maybe or seen little bits about fire or just about financial literacy, and I thought, Hey, I should really learn how hard can this be? I, I’ve conquered and accomplished so much. How hard can this be? And I just led myself down the path reading the books that people recommended, checking out the blogs and found the information fairly easy to digest and also just felt empowered by what was out there that, Hey, I could do this. At the time, I did decide to enlist a financial advisor who I eventually cut ties with, but it helped maybe me get off the ground just a little and started doing things on my own as well. And it became addictive because you see the compounding and accumulation effect, and I’m like, whoa, this is really working.
Truly, it becomes addictive. Then you’re like, how much more money can I pump in and how much more can come up and how fast can I grow? And so it was really a combination of I’m trying different things with investing and then I’m side hustling because I just want that to grow as soon as possible. As soon as I got back from Europe after that backpacking trip and got my next job, which jobs typically are when you change them so often is each one pays you more. I decided I’m going to cut my spending. I’ve increased my earnings, so I’m going to increase my investing, and then I’m going to see where I can fill in with different side hustles and things just exploded for me.

Mindy:
My dear listeners, we would love to hit 100,000 subscribers on our YouTube channel and we need your help. While we take a quick ad break, please hop on over to youtube.com/biggerpockets money and check to see if you are subscribed to our channel. Stay tuned for more after the break. Thanks for sticking with us. So what kind of side hustles were you finding to add to this nest egg that you were doing?

Julie:
My main side hustle, this one has got a whole dramatic story of its own. I’ve talked about it on my blog too. I talk about all my love and relationships and romances on my blog as well. I ended up meeting someone overseas on that European trip that I thought I was going to move to Europe for, and so I’ll try to make this short. It’s a long emotional story, but I ended up putting my house on the rental market, my entire house, which is three bedroom, two bath, two car, garage yard, the whole shebang because if I didn’t have a job, if I was moving to Europe, I had to have some income because who knows if I could even work over there without an appropriate visa, which takes time to get. So I put my house on the market talking to this guy, we’re like, are you sure?
Are we really doing this, dah, dah, dah? He’s like, yes, yes. No risk, no reward. I put my house on the market, I get on the rental market, I get a four month booking, and then he dumps me. So I am like, I’ve got nowhere to live and got another job, and that job was based in Phoenix, even if it was remote, most of the time I’m like, I need to find a place to live. So my side hustle, if you can call it that, was moving into a studio Casita, like somebody’s backyard house in Phoenix, spending $800 a month while I rented out my big house in Phoenix during the Phoenix tourism season from Christmas to Easter, that as you can imagine, paid good dividends. I also was bartending at the Phoenix Open, which is the big golf tournament, made tons of money at that. I went through my stuff and was consigning things. I mean, I had have to look back at every, it was like whatever little opportunity I had, I think I was walking dogs maybe for a little while, whatever went at the time. I was like, let’s do it.

Mindy:
And I love that story because so many people that I talk to, they discover financial independence and they’re like, I’m going to cut out everything. And then they’re like, Ooh, that isn’t so much fun. I’m going to add some stuff back in. But there’s also this hustle culture and the side hustles that you’re doing. I’m assuming you took that money and threw it at your investments and not into shopping some more. It seems like you were shedding, actively shedding as much as you could to in order to get to financial independence as soon as possible.

Julie:
And you know what else that taught me? Moving out of my house for four months, I was hearing from people when the house is the American dream, it’s why you work so long. You’re like, I bought a house. It’s the mark of success for any 30 something year old. Actually, I was in my twenties when I bought it, but it’s like, yeah, I did it. Look at me. I did good. I moved out of my house and my friends were like, oh my God, there’s people sleeping in your bed. I’m like, yeah, but I changed the sheets. There’s people using your brand new kitchen that you just remodeled. I’m not going to take it with me.
It fostered this sense of detachment, which I think is really the number one thing for minimalists, for nomads, for early retirees, for anybody who wants to live a more mobile life, they have to have this sense of detachment from their material things, from their former identity, from basically what life is supposed to be and come up with their own version of that. So having the detachment allowed me to come back into my house and really see it for the flat two dimensional thing that it is. Yeah, I have a great kitchen. I’m not going to take it with me. Oh, oops, it’s scratched. It’ll still sell. I’m not worried about that. I’m not going to live here forever. I’m not going to take this to my grave. And that in itself was probably more valuable than the money that I made, even though I did throw it at my investments and it did quite well for me.

Mindy:
So what year are we talking about here?

Julie:
Okay, so this would’ve been 2018 to 2020, the 2018 tourist season, the 2019 tourist season and the 2020 tourist season. So yes, you’re right. That brings us to Covid.

Mindy:
That brings us to Covid. Well, before we get into Covid, I want to talk about your investing. You’re ramping up your investing, where are you putting your money? What are you investing in?

Julie:
I was playing around a little bit. I think of course, I was reading all the advice like Total Stock Market, the VTI and fx, CACs and all the ones that are very broad, and I put a lot of money in those, and I think I was like, oh, let me try a little Vanguard and a little fidelity and a little, I was just sort of like, let’s just see. And then I thought, oh, maybe some Costco, maybe some Microsoft just for funsies, some Netflix and so on. And most of it did great and some of it not so great, but I kind of felt like it was good practice for me. I’ve since cleaned a lot of that up in the years following, but I had my retirement vehicles, my 401k and my Roth IRA, and then I also had my brokerage, so I made sure to max out my Roth to the level each year, my 401k to the federal level allowable, capturing the company match, which was I think up to 3% at the time. So I hit those limits each year for I think three or four years running during this time period. And then everything else I put into brokerage, and that was where I tried to divvy up where I wanted to put it.

Mindy:
That’s a nice mix. So on the BiggerPockets Money podcast, we talk, we’ve been talking about the middle class trap where you’ve done everything. You have put your money into your home equity or your 401k, but then you become a millionaire on paper and you’re like, oh, how do I access this? Rates have gone up so I can’t just pull equity out of my house and I can’t access my 401k without paying penalties. So you’ve got several hedges against that. First of all, I am assuming that you sold this house. It sounded like this is not currently a home that you own.

Julie:
I sold the house.

Mindy:
That’s one way to access the equity.

Julie:
Yeah, exactly. I sold the house in 2020, in the middle of 2020 after I decided, or while I decided to go nomadic, and I got my asking price. I know real estate has really grown and exploded since Covid, but I made the best decision at the time and I also didn’t want the burden of some kind of responsibility that I had to keep. I had enough issues when I was just renting it out to these vacationers who are like, how do I flush the toilet? So I didn’t really want to deal with that.

Mindy:
Yeah, yeah, and that’s valid. I bet I’ve had rentals too, and yes, you’re like, really it’s Have you never seen a toilet before? It’s the silver handle on the side, you just push down. Yeah, yes. No, I completely get it. And in 2020, so I’m a real estate agent, and I remember the beginning of Covid where you couldn’t go even and see a house unless it was under contract, so people were writing these really quick contracts just to be able to get inside to see it and then canceling it if they didn’t like it. It was a crazy market. So selling in the middle of 2020, covid this weird thing that hasn’t happened in a hundred years, totally valid choice. You didn’t want to own this property, so sell it. That’s what you do when you don’t want to own a property anymore. But you’ve also got your Roth IRA. You’ve got your after tax brokerage accounts, so you have many different buckets to pull from until you can access your 401k. Are you doing any of what I consider to be advanced maneuvers like Roth conversions now that your income is presumably lower?

Julie:
I did that my first year after quitting my job, so I kind of classify those years. The first almost year and a half, I was almost pretty much fully on sabbatical, not pulling any income from work, not really nothing substantial, and that was when I took the opportunity to do one of those conversions and made an investment income at the same time. I did that in my first year. I have not done that since, but it’s something that I think about and will look at when the time comes.

Mindy:
What does barista fire mean to you specifically?

Julie:
Yeah, I use the term sort of barista fire and semi-retirement interchangeably because I think they mean sort of the same thing because the concept of barista fire is that you are sort of financially set to a standard of living that you could live by. I just choose to expand my standard of a living just a little bit, and so I supplement that with income coming in. That is a push pull almost levers that I can tweak as I need to. If I want to work a little bit more, I can always take a more clients. If I want to have more free time, I can say no to clients, and at this point I am pulling a little bit from my brokerage just to sort of maybe pay off a monthly credit card when my income doesn’t match because my income is very flexible right now. But otherwise, I’m almost probably 80% just spending my earnings at this point.

Mindy:
Okay, and are you still working in social media?

Julie:
No. No. Well, I don’t know. Maybe I’m not working for anyone. Anyone else? Not really. I am an independent contractor with a travel agency. Back when I took that one month travel backpacking trip to Europe, I started a blog. I wanted to create the content that I couldn’t find when I went out there, and I was a very kind of juvenile elementary traveler at that point. So some of the information that I needed I couldn’t find and I wanted to produce it for other people. That blog has sort of just become my little creative baby, and now I have quite a substantial readership and views per year. So when I started getting messages, especially as I started talking about my sabbatical and my nomadic lifestyle, I was getting messages of people seeing my travels and they’re like, I want to travel with you, or I want to work with you, or I want to replicate your trip.
How did you do that? And so I basically thought, well wait a second. There’s an opportunity to monetize my experience and my expertise, so what does that look like? Who do I partner with? I had some contacts from back in Phoenix when I was there and different kind of travel events I had attended as more of a travel blogger. I looked up those contacts and found sort of a synergy in terms of, hey, I can hold group trips, I can design trips for clients, I can do travel coaching and that can supplement my lifestyle and also give me some credibility and backing beyond the travel blog and the numbers that I pull in. It gives me the backing of sort of a travel agency with a lot of revenue and a lot of travel sales. So it’s really been a win-win and allows me tons of flexibility in what I do and where I do it. So that probably was about two years ago when I partnered with a travel agency and I’ve been working with them on a part-time basis ever since.

Mindy:
What does part-time mean? How many hours per week or per month are you working?

Julie:
You’re asking me all the hard questions. It’s so hard. I can’t calculate it. I kind of look at the writing that I do on my blog. I look at my social media, the content creation that obviously helps bring in clients, helps showcase sort of my travel expertise. It’s not something that I really calculate because that’s just what I would be doing. I would be storytelling, I would be sharing, I would be expressing myself. These are things that I would do without probably the financial impact. And I did do that for a long time actually. I didn’t make any money on my blog or social media. I was just wanting to share and be helpful and inform people. So I don’t know. It’s really hard to calculate, but I don’t work full time. I can say that, but sure, there are some itineraries that take a little bit more effort and energy than others, and it’s also hard to say what’s work when you’re traveling and having the time of your life, and sure you’re looking after people at the same time, but I don’t know. I dunno how to, I know work obviously is the exchange of labor for money, but at the same time, I don’t know if I can really, I don’t know how to calculate, I’m sorry.

Mindy:
Well, okay. I think this is a really great way to answer this because yes, you’re blogging, but you would be blogging anyway. So is that work? Probably not, even though it does generate some income. How about this? Can you do anything you want or do you ever have to say, no, I can’t do that because I have to do work type stuff?

Julie:
Yeah, I mean both. I can choose. I’m not going to do this trip, but administering a trip requires work that I have to do. So if I choose, I’m going to do a trip, then yes, there’s the administration and the marketing that goes along with that. If a client comes to me and they’re like, I want to do this and I don’t want to do it, I can give it to another advisor so I can say, no, I’m not obligated or indebted to do anything. And definitely I’m not beholden to a lifestyle that I can’t say no, that I am never really like, I need to make money this month, so I’m going to do A, B and C. It more comes from a desire of, yeah, I’m passionate about this city. I am going to be in the same place. I really like this client. They seem really cool and it’s more born of me wanting to empower and help people really put together the trip that is going to change their life. And I think it comes from that, which is a different way to look at it.

Mindy:
What I’m hearing is no, I can essentially pick and choose what I want to spend my time doing. I don’t have to ever say, I have to do this trip, otherwise I won’t be able to put food on the table. I have to do this trip, otherwise I’ll have to pull out of my retirement accounts. I can just choose to do this trip because I want to do this trip with the caveat that if I’m doing this trip, then I can’t do another trip at the same time. Obviously you can’t be at do places at once, but it seems like you get to pick and choose how you spend your days and weeks.

Julie:
Yeah, I call it financial independence, recreational employment.

Mindy:
There you go. That’s great. That’s perfect. Okay, we’ve renamed fire or Acronymed Fire, financial Independence, recreational employment, and you like what you do, it’s clear that you like what you do.

Julie:
I do, I do. And at the same time I have a threshold that I’m going to get to or that I’m at is I’m going to do this much per year, but then I am going to preserve my free time, my leisure time, my learning time.

Mindy:
That’s not your choice. And you have done the things that other people might not do to ensure that you can have the life that you want, which is to travel to host events for other people if you choose to and to go out on your own. If you don’t, I think that’s perfectly valid. You spoke earlier about your current expenses are about 80% covered by your income. What are your current expenses? What are you spending every year?

Julie:
Yeah, so I’ve been tracking this in detail on my blog basically ever since I went nomadic, I think the first year after I quit my job, I spent about 27,000 traveling the world basically the following year, I think I spent maybe around 34, 30 5,000. And then last year I spent 40,000. So compare that to what you might spend in the US living a normal life. I know that back in the day, I say back in the day because who knows what it would cost in today’s dollars, but I think in 20 20 19 or 2020, and this was when I was fairly watching my spending, I was pretty careful in what I was spending and I think I was spending like 50, 55,000 or something like that. So anybody who says, oh, I can’t afford to travel. No, you can’t afford to live in the us especially now.
Especially now, it’s crazy. So I can get by in other countries on far less and what am I spending my money on? I mean, most of it’s travel. I mean flights and accommodations than it’s food. I spend a lot of money on food, and by the way, I’m still enjoying myself. I’m still drinking beer and wine, and I’m still having nice meals and I’m eating out. I’m having a coffee not from Starbucks, but from some local coffee shop wherever I am. So I’m not skimping by any means. I’m just being conscientious and thoughtful about how I spend my money because opportunity costs, if you spend your money on that, then you don’t get to spend it on this and vice versa. But by and large, I’m really not skimping in any way. It just works out that I can get by and much less. So the cost of living is less, but the standard of living is not.

Mindy:
That is such a great quote. We have to take one final ad break, but we’ll be back with more right after this. Alright, let’s jump back in. What was your net worth when you decided to quit your job in 2021 versus what is it today?

Julie:
When I decided to quit my job, and I’ve also, I’ve put this on my website too, I just don’t remember all the numbers, but I have kind of tracked this over the years and it’s like a bell curve. So when I hit that 100, then the 200, then it’s like this. It’s like this, the accumulation effect. So when I quit, I believe I had just cleared about half a million and that was the big milestone. So this was in 2020 and of course, let’s see, it’s March now. So there’ve been some recent market fluctuations. I think I’m at like five 15 now. So lost. Well, it’s not lost until you cash it out, but the value has decreased in the last couple months. But that’s not a thing I’m worried about. I’m kind of like a hit it and quit it kind of mindset. So I will look at it every couple months. I’m not really affected or fussed by it because what goes down will come up.

Mindy:
I agree. I just spoke with JL Collins from the author of The Simple Path to Wealth just a couple of hours ago, and he said that the stock market always goes up. Yeah, it’s a rocky up, but it continues to go up and I’m not concerned. And he said he wasn’t concerned. I’m also not concerned. The market fluctuates sometimes, and that’s just how it goes. So anybody who is listening to this show is probably hearing you say 500,000 and thinking, oh my goodness, how could she retire? Well, she still is able to generate some income that she likes to do. She’s nomadic. She’s out there living the life she wants to live while her investments continue to grow, and she’s not really pulling from her investments. And I think that you have done a phenomenal job of living what PHI is supposed to be all about. You are financially independent, you get money out of the way so you can live your best life. Well, you’ve gotten money out of the way and now you’re living your best life. Did you have a better life at $50,000 in America or $40,000 overseas?

Julie:
I mean, I’m in the Philippines right now and I just spent the last three weeks in New Zealand and before that I was in Australia and before that I was in Africa for seven weeks. So you tell me, it’s been pretty awesome. So no complaints. I mean, at the same time there’s challenges and different obstacles you run into, but you’re going to have obstacles in life no matter where you are. You rather enjoy encountering them in a place or places that give you just more life and just the zest, like we’re here on this planet to become our best selves, and we should be in the environments that do that.

Mindy:
I am sitting here in Longmont, Colorado. I live here. I work full time. And you just listed four places that you’ve been in the last, what, three or four months that I’ve never been in my whole life. So who’s living the better life here? Listeners

Julie:
Come on a trip.

Mindy:
I think Julie, come on a trip. I’ve got a good life. I’ve got, but yeah, but that sounds like a lot of

Julie:
Fun. Well, hey, not everybody is at the point that or even wants to necessarily throw it all away or give it all up. And that’s one of the reasons why I’ve been hosting these mini sabbatical group trips is to give people a taste of what travel can do while they’re still working out the rest of the details. So what’s your appetite without being the full-time commitment that I took, which I mean to be honest is not necessarily for everybody. We can’t all leave the workforce at the same time because then who’s going to do the work?

Mindy:
Exactly. And to be honest, traveling on my bucket list, there are places I would like to go, but I also like my house, so I want to go and then I want to come back and then I want to go and then I want to come back. But I want to go to New Zealand. I want to go to Australia since they’re really close to each other and so far away from me, that’s going to be an all encompassing trip for that one,

Julie:
Of course,

Mindy:
Which would be a much longer trip. But yeah, there’s lots of places I want to see. I just also want to enjoy my downtime. So traveling Nomadically is probably not in my cards, but I will definitely be out and seeing more of the world than I have.

Julie:
Yeah. Well, who to talk to when you’re ready to plan that?

Mindy:
Yes, I do. What do you do for healthcare out in the other parts of the world?

Julie:
This has been a little bit of trial and error over the years, but where I’ve settled is a couple like a trifecta, I guess, coverage. So first I’m on an A plan, which costs me next to nothing. Since I am low income, by definition, what I’m bringing in is not very much, so I barely pay anything for it. And that will really just cover me for when I come back to the us, which is one month to six weeks per year so I can get some of my doctor’s appointments in and any prescriptions that I might need. Then I have travel medical insurance, which fills the gaps. If something happens to me while I’m somewhere else and I want to file a claim for reimbursement, or if it needs to, heaven forbid, get me back to the US emergency evacuation or something like that, then at least I have something happening in the US to take care of me.
And then finally I’ll pay it out of pocket because, and I know this is such a foreign concept to a lot of Americans because we have it in our heads that, oh my god, healthcare is so, so expensive. But you go almost to any other country in the world and it’s much more affordable. Anything is much more affordable. So I’ve got prescriptions. A lot of times you don’t even need prescription from medication, you can just go in and buy it. Or if you want to make an appointment, you can pay out of pocket, which I think some of the medical costs in Mexico, it’s such a fraction of what you would pay in the us then you can get in right away. You talk to an English speaking doctor who was probably educated in the us, you actually get to sit down with that person and talk to them for as long as you want instead of being ushered out in five seconds.
I know a ton of people who have had medical care in Mexico and have had great experiences, and they’re paying a 10th of what it would cost if they were to pay out of pocket and they can get in fast. So Mexico is just one example, but there’s great healthcare in many other places in the world. So think about what you’re paying in the US every month or what a lot of retirees are afraid of paying, and then just put that in your pocket and then the off chance something happens to you while you’re in some other foreign country, pay out of pocket and you’ll be surprised at how little it is.

Mindy:
Probably it’s definitely more affordable in other countries. I know some travel insurance requires you to be outside of the United States for more than six months out of the year in order for it to take effect. And the reason that they do this is because it’s so much less expensive.

Julie:
I mean, it is tricky. There’s a lot of different healthcare plans. This is what works for me because I’m still, I guess, relatively young and healthy. There are obviously people with other conditions and circumstances, so you’ll have to research what’s best for you. But I think the general feeling from a lot of Americans is I just can’t do it because of healthcare. And if you spend a little bit of time exploring what else is out there, people might be surprised. I just want to say that

Mindy:
Absolutely. I was very surprised when I heard from a nomadic friend about how she handles her healthcare. I was like, wow, that’s less than I pay. And probably for much better coverage,

Julie:
I pay like 40 bucks a month putting everything together.

Mindy:
Wow, okay. $40 a month. That’s definitely less than what I’m paying. Julie, do you have a fine number that you are working towards?

Julie:
I think I’m balancing a little bit of the live in the moment, and you can’t control what happens to you in the future. We can’t predict what happens to you in the future. Don’t waste your time worrying about it. I’ll deal with it when the time comes and this is working for me right now. In 10 years, I’ll revisit how my numbers look and maybe come to another decision. But we spend so much time just swirling up these worst case scenarios that that’s such a waste of mental energy. That’s such a waste of where we could spend our time and our brain power. I mean, it’s a balance, right? Because some people don’t think about anything and they’re just like, woo-hoo, do what I want. But I’ve been in that situation where I really just devolved on different scenarios in my mind, and now I’m much freer and happier if I’m like, I’m living in the moment. I’m letting things unfold. I’m being smart. Sure, I’m making good decisions. I am being thoughtful, but I’m not going to nitpick everything.

Mindy:
I think that you don’t need to be pursuing a fine number because you’re already living the life that you want and you enjoy the work that you do. I really, really appreciate your time today. This was so much fun. Where can people find you online?

Julie:
So everybody can find me on my website first and foremost, which is julie dere.com. That is the French way of spelling, and it’s a little play on words from the de, so it’s J-U-L-I-E-D-E-V-I-V-R e.com. And then on Instagram it’s at Julie B. Rose. And with those two put together, you’ll find any which way to contact me or look up my group trips or look up my ebook or whatever else you’re interested in. And would also love to hear people’s comments on this podcast. If you have any feedback from him, all ears,

Mindy:
I would love to hear that too. So you can email [email protected] and I will forward it on to Julie, or you can reach out to Julie at those places. I love your blog. Julie, I saw I first found you when you did an article. The things I would Tell my younger Self, I can’t remember the exact name of it. It was such a great article. Basically just don’t do dumb stuff.

Julie:
That’s my journalism background coming in.

Mindy:
It was a really, really great article and that sparked me down a rabbit hole to read all of your content, even though nomadic life isn’t my goal, it was still really fun to travel through you.

Julie:
Oh, well thank you. I really appreciate that and I love getting that feedback. I put a lot of blood, sweat and tears into being vulnerable and sharing some of this stuff, and it goes against my nature a little bit. I’ve been a little bit of a privacy, but I always appreciate hearing like, oh, this inspired me, this changed me, this I related to this, so thank you for that.

Mindy:
Yeah, you have an authentic voice when you’re reading an article and you’re like, oh, they were paid to write this. All they’re doing is advertising and advertising, and I really like the voice that this is my real life self, and that is kind of hard to find online. So I really, really do love your blog, and thank you so much for joining me today. I really had a good time chatting with you.

Julie:
Thank you for having me. I did too. What a fun conversation. Can we do this again? I could just keep going.

Mindy:
Yes, of course. Alright. Okay. Thank you Julie, and we’ll talk to you soon.

Julie:
Thanks. Bye.

Mindy:
That wraps up this episode of the BiggerPockets Money Podcast. She is Julie DeVera or Julie B. Rose. I am Mindy Jensen saying farewell C shall.

 

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