Tired of spending your money on rent or stashing it in a traditional savings account? You could make your money work harder for you and get on the path to financial freedom with real estate investing. Today, we’re going to show you exactly how to buy your first rental property in 2025, step by step!
Despite rising home prices and high interest rates, now is an ideal time for new investors to buy real estate, as they face less competition and have even more leverage. So, in this episode, Ashley and Tony are going to show you seven steps that will get you off the sidelines and into the game! First, we’ll help you lay a foundation for investing. You’ll not only need to get your financial house in order but also set clear investing goals, determine your purchasing power, and choose your investing strategy.
You’ll also learn how to do things like find a lender, choose your market, and assemble your investing team. Then, we’ll start looking at deals! We’ll share how to build your buy box, analyze properties, and negotiate with sellers. Most importantly, we’ll teach you the right way to build your business so that you succeed today AND as you scale your real estate portfolio!
Ashley:
Hey, rookies, are you tired of watching your money sit stagnant and low yield savings accounts or giving your money away in rent every month in 2025? Real estate investing could be your path to financial freedom.
Tony:
And in today’s episode, we’ll break down the current market landscape and give you a step-by-step roadmap to help you start your real estate investing journey.
Ashley:
We will give you the knowledge and confidence to get started in real estate. I’m Ashley Kehr.
Tony:
And I’m Tony j Robinson, and welcome to the Real Estate Rookie Podcast.
Ashley:
Okay, Tony, before we actually jump into the action steps you need to take to get your first deal or even your next deal, let’s talk about why you should invest in real estate right now. Tony, are you seeing any market indicators or economic indicators as to why someone should invest right now in real estate?
Tony:
Yeah, I mean, I think the biggest thing that we’re seeing is that even with all of the kind of fluctuations in real estate, we’re still seeing that over the long term property values are continuing to go up and people are still building wealth. And as we continue to see, I think the supply of housing be constrained, right? That’s been a big talk for quite some time now is that there just isn’t enough housing to absorb all the demand for the people that hold that limited supply. It typically is going to put you in a really good position, especially if you look out over a longer time horizon of five years, 10 years, 20 years, because you’re going to get a lot of appreciation on top of the cashflow that you’re continuing to generate. So I think just the fact that there’s this big imbalance between supply and demand is going to play in our favor. And then irrespective of your political beliefs, I think having a president in office who’s a real estate investor, there’ll probably be some good things that come our way as well. I saw a clip, I don’t know where he was speaking at, but he said that hey, bringing back 100% bonus appreciation, very much something that he wants to do, and all of us as real estate investors benefit from that. So I think there’s a lot of things working in the favor of real estate investors today. What about you, Ash? What are you seeing?
Ashley:
Yeah, I think right now that if you’re going to start investing in real estate, it should be a long-term play. This isn’t going to be a get rich quick scheme. You’re not, in most cases going to see amazing cash flow because you’re getting a property at such a low interest rate. Your mortgage payment is lower, rents are super high. So you have that cashflow buffer that maybe you got a couple of years ago. That’s definitely going to be harder to find now. But I think if you are putting in long-term goals for real estate to actually build wealth, then I think definitely now is still a great time to invest in real estate.
Tony:
I think the other thing too, Ashley, to add to that is that we’re in this kind of weird spot and we’ve been here for a little while now, and we’ll probably be here at least through a good portion of this year. But I think we’re in this weird spot where the demand, the number of people who are looking to purchase properties is nowhere near what it was in 2021 and 2022. So there’s fewer people looking for properties now, supply is also lighter than it was because there are a lot of people locked into these lower interest rates. 4% and below that don’t necessarily want to sell. But for the properties that are listed, I think we’re in a really unique opportunity right now because since there is less competition, it means that you as a buyer have slightly more leverage. And it means that if a property’s on the market and it’s been sitting for 30, 60, 90 days, you’ve got the ability to go there and go in there and start negotiating on things like price negotiating on things like credits, negotiating on things like whatever other terms are important to you. So if you are a rookie who’s sitting on the sideline and you don’t want to have to get in when rates are back to 5% and maybe you’re, it was crazy buying real estate at one point, it was so hard. And if you want to avoid that kind of bloodbath of so many people fighting over the same deal, this might be a great time where you as a buyer have a little bit more leverage.
Ashley:
Now if you’re considering your first deal or maybe even moving on to your next deal, another consideration besides just the timing right now, is also your own personal financial foundation. Are you actually ready and prepared financially to invest in real estate? So we did a YouTube video. You can head over to Real Estate Rookie on YouTube, unless you’re already here watching right now. And it was released on March 4th, and it’s a video about how to financially prepare yourself to invest in real estate. So go ahead and go check out that video. Let’s get into step one. So besides getting your personal finances in order, there’s some other things you need to do to kind of lay the foundation for your first investment. One of those things is figuring out what your goal is and what your priority is. So why do you even want to invest? What do you want to get out of it?
Tony:
Yeah, I think a lot of people get into, they get so excited about investing in real estate that they don’t really take a moment to pause and understand why they’re doing this and what their actual priorities are. There’s different reasons people invest. You have cashflow, you have the appreciation, you have tax benefits if you’re doing something like short-term rental until you have maybe owning cool vacation properties and places you like to go. But with those motivations, oftentimes you won’t be able to equally satisfy all of them with one property. You probably won’t get a property that’s going to give you amazing cashflow, amazing appreciation, and amazing tax benefits and oh, it’s a place that I love to go vacation. So more often than not, you’ll have to choose which one is most important. And I think that’s where most rookies make a mistake is that they don’t make that decision and then they’ve just this kind of shotgun approach on strategy and market.
Ashley:
So the next thing you should be figuring out when you’ve set your financials is going to get pre-approved or figure out how you’re going to fund this deal. How are you going to pay for it? Is it going to be cash that you have? Is it going to be a mix of cash and bank financing? Will it be a line of credit on your primary residence? But you need to figure out what your purchasing power is. If you don’t know how much you are able to spend, you are going to be wasting so much time analyzing all these deals, looking in all these markets, looking at all these properties without even knowing what you can actually buy. How annoying is it? Have you guys ever gone to one of those wholesale stores where they dump everything off the truck that was overstock from Target and all these different places and you go and there’s just stuff piled everywhere and you walk through and there’s no prices on anything. You have to find someone, you have to barter with them. How do you walk through there and know what you can actually buy without knowing the prices? It’s so frustrating. So same with knowing your purchasing power or your property as to what can you afford, what can you be looking for?
Tony:
I think the last thing that rookies want to do is start investing a ton of energy and time into a city, into a market or into a property only to realize that it’s not even within their budget. Because who cares if you found the perfect city that checks all the boxes, if you can’t actually afford to buy there because you either don’t have the cash for down payment and closing costs, or B, the ability to get approved for the debt to buy in that market, then you just wasted a bunch of time. So that’s why Ash and I are saying starting with understanding your purchasing power, your cash on hand and your loan approval amount is one of those most important first steps.
Ashley:
And then you’ll also need to know what exact strategy you’re going after because your buy box is going to be tailored based upon what strategy you’re going after. So say Tony and I are both looking to invest in the same market, but he’s going for a short-term rental and I’m going for a long-term rental. He may be looking for a property with a pool because it will increase his daily rate, where myself, I don’t want to pool because it’s going to drive up my cost of insurance, having long-term rentals in there and a pool. So making sure your strategy, you’ve defined your buy box and what you’re actually going to be looking to buy.
Tony:
And just one additional point on top of that is I guess there is a bit of a distinction between strategy and asset class and having some understanding about those things I think is important as well. For example, with short-term rentals, you can have a single family short-term rental, which is the asset class. Short-term rentals of the strategy, single family is the asset class. You could have a quote, short-term rental with aids, small motel, you could have short-term rentals with a large hotel. Same thing for long-term. I can buy a single family property. So long-term is a strategy, single family is the asset class, or I could do long-term as a strategy and focus on small multifamily, four to 10 units, 20 units, I could do large multifamily, right? A hundred units and up. Still long-term rentals, but different assets. So understanding not only the strategy that you want to go after, but also the asset class is important to make sure that you are kind of putting all the other pieces in place correctly.
Ashley:
We are going to take a quick break, but we’ll be right back after this with more on how to get your first property.
Tony:
Alright guys, we’re back. So we talked about the foundational stuff. Now let’s get into the good stuff here, right? What’s the actual roadmap? So one of the most important questions you’re going to have to ask yourself is how am I actually going to fund this purchase? So our second step is to get you to talk to a lender, right? Your lender is going to be one of your best friends as you look to scale up your real estate portfolio. And I think Ash and I both would encourage you to do a couple of things when it comes to lending. Number one is talking to multiple people. I think we’ve seen enough folks who come on and they only go to one lender, that lender gives them an answer and they take that as the gospel. But I think there’s challenges in doing that or you make it more difficult for yourself because every lender has something that’s slightly different that they can offer to you.
Ashley:
And I think too, we’re going to get into market selection, but even if you don’t have your market selected, there are nationwide lenders where you could at least get an idea of what you would be approved for. So if you need help finding a lender to get your preapproval, you can head over to biggerpockets.com/lender and this is where you can find a lender that works with investors and can help you get that first investment.
Tony:
One other thing too that I just want to call on the lending side, and we’ve talked about this a lot in the rookie podcast also, is that there is a tremendous amount of value in going and working with small local regional banks. If you’ve got a good relationship with your local chase, your local B of A, sure go talk to them as well. But as you start to build your real estate portfolio, the small local banks are the ones that are going to have the most flexibility. And Ashley and I both as we built our portfolio, have built relationships with these small local banks that have given us loan products that we no way, in no way, shape or form would’ve gotten if we would’ve walked into Bank of America. My very first deal, my bank funded 100% of my purchase and my rehab. I could not walk into Bank of America and say, Hey guys, I got a killer deal for you. Check this out. There’s no way they would’ve said yes to that, but small local banks have the flexibility to do so. So whatever market you’re in, look up credit unions, look up regional banks and just go start talking to folks, see what they can offer you.
Ashley:
The next question kind of ties into this. You need to know what market you’re going to invest in because if you are going to use a small local bank, you’re going to want to use the small local bank that’s in the market that you’re buying the property. So one of the banks that I use now, it is such a small area that they will actually lend in. If I was going to get a property in the city of Buffalo, which is 25 to 30 minutes from where these bank locations are, they would not lend there. They want to stay nice in their little rural surrounding towns and only lend on those properties, but they have great flexibility and they know their market, they know their area, and they stick to it because they can tell when they’re looking at a property what is actually going to be a good investment for the bank to lend on to.
So when you’re looking for your market, the best place to go to actually find it is to go to the bigger package forums, go to the real estate rookie Facebook group, read, read the forums, read through the post or ask the question, where should I invest? Where are you investing and why are you investing there? Make a comment or make a post that shows your buy box, which strategy you’re looking for and that you need a market that fits that strategy. This is such an easy lift to do, even if you get no one that responds, which is very unlikely in these two groups. It took what, five minutes for you to type up that post and to post it. You will get so much information. Then go to the BiggerPockets forums and create a keyword so you can create keywords. So I have it set if anyone mentions buffalo, even if they’re talking about the animal buffalo instead of buffalo, New York, I will get, and I have gotten, there was a post about that where I got an alert and you have the alert set up right to your email and it says, this person’s talking about buffalo.
So if there is markets you’re interested in, start making keyword tags for them so that you’re getting updated information about them. Okay? Then you can go to the biggerpockets.com/resources and there’s a whole bunch of market analysis tools there. So the first things you need to know is your budget. So what markets can you actually afford to invest in? If you know you can only buy your purchasing powers only 200,000, you’re not going to waste your time looking in San Francisco for a property. Your strategy, if your strategy is long-term buy and hold, you most likely are not going to go and purchase in a destination area like Joshua Tree or maybe even the Smoky Mountains. Sure, there probably are deals out there, but those aren’t probably going to be your highest cashflow. You would make more money turning those into short-term rentals probably. So knowing your strategy and your purchasing power can help you narrow down what market you actually want to invest in.
Tony:
Yeah, we actually did an episode recently, Ashley and I and Dave Meyer from the Real Estate Podcast, and on the market it was episode 452 where we broke down market research for Ricky’s and each one of us picked a different market. We explained why. So if you want some more support on choosing your market as a Ricky Investor, episode 452 is a great place to go once you’ve chosen your market. Our next step is in building out your investment team and David Green who wrote several books for BiggerPockets, he’s oftentimes referenced this as your core four, but it’s the people that you’ll need around you as you look to build out your real estate investing empire. And I think for most rookies, the kind of core folks that you’ll need, your lender, which we already talked about, you’ll need a real estate agent, you’ll need an insurance broker, you’ll need potentially a property manager if you choose to self-manage or not. And usually you’ll need some sort of handyman contractor, someone that’s going to do that kind of work for you. And as you put those pieces together, that’s how you start building the confidence that you can actually do this thing, whether it is in your backyard or whether it’s long distance.
Ashley:
And I think it starts with finding one of those people and then using referrals, word of mouth, recommendations to actually build the rest of the team. So if you’re looking for deals, I would say an agent is a great place to start. Or if you know somebody that lives in the area that can be your boots on the ground that can tell you, no, I would not invest on that street, turn the corner, then I would buy a property there. That’s a way better area. So having somebody who has knowledge of the property, I think is super valuable to, even if they’re not an agent, they’re not a lender, anything like that, but they can be your eyes and your ears for the property I think is very valuable too.
Tony:
My very first deal, it was my agent that was kind of like, actually it was my lender, my lender and my agent kind of concurrently. They were like the lunch pin for me, but my lender introduced me to my agent and then they both introduced me to my contractor, to my property manager. And a good agent who’s well connected and who does a lot of volume in a certain city, typically has a lot of people in their Rolodex. So for all of our Ricky that are listening, if you want to find some of the best investor friendly agents on the planet, head over to biggerpockets.com/agent finder. Okay, biggerpockets.com/agent finder. Super quick, super easy, fill out a quick form and you’ll get all the top rated agents in whatever market it’s that you’re searching in.
Ashley:
To give it a real life example of this, I’ve used the same real estate agent. I’ve used a couple others, but she’s been the consistent one for a while now. And I bought a pocket listing from her last year, and I was flipping the property and an issue came up with the sump pump and it was delaying our closing. So she knew somebody that knew the building inspector, that knew who did the plumbing inspections, and just because of how well connected she was just from doing deals in this area, this property was the farthest away from my house that I’ve ever done. I didn’t know anybody in the area. I have a great contractor who worked out there and hired his subs and took care of everything. I barely ever had to go there. But during this issue, it wasn’t a contractor connection, it was like working with the town and she was so well connected because she had done so many deals in that area that it wasn’t like it was one of her clients that used to work with somebody in there. But just having those connections can be so valuable to make your deal go through. And I think that is a huge benefit to working with an agent who is investor friendly and has experience doing a lot of deals because of those connections they have.
Tony:
Yeah, Ash, great example of the power of a good agent. So again, if you guys, ricky’s biggerpockets.com/agent finder, best place to go once you’ve got your team built out. The next step, I think we’re on step number five now, right? So step number five is building out your buy box and then actually analyzing your numbers. So I guess before we even get into the nitty gritty here, just to quickly define what your buy box is, your buy box is the specific type of property and location of property that you’re searching for to help you achieve the goals that you’ve set out to become a real estate investor. So I’ll give you guys a quick example. When we made the decision to buy our first hotel, we made the buy a box of we want a property that’s between the purchase price of 1 million to $3 million value add opportunity, meaning we needed an opportunity to go in there rehab and increase the value.
We only wanted to focus on either vacation markets or urban markets. We didn’t want suburban or rural, and we wanted something that offered seller financing, that was our type buy box. And then it became so much easier to filter through all the different opportunities we were seeing to say, does it match or does it not match? Because then we didn’t waste our time with the stuff that wasn’t within our buy box. And we got really, really good at underwriting things that were within our buy box. And then taking it even back to the beginning of my journey, my buy box, when I very, very first started, I wanted a single family home in the 7 11 0 5 or 7 11 0 4 zip codes in Shreveport, Louisiana, single story. And I think I wanted to build 1950s or later, nothing before 1950s with a value add opportunity. And my very first deal was at the three bedroom single story, home value add, 1954 build and the 7 11 0 5 zip code. So the better you get it defined on your buy box, the easier it becomes to really scale up the property identification and the property analysis. I dunno, what are your buy boxes looking like or how have they maybe evolved? What would it look like for you?
Ashley:
Well, actually I created a buy box worksheet. You can go to biggerpockets.com, Ricky Resource, and it’s a template and it basically asks you questions as to everything you should be looking at when building out your buy box. Do you want a pool? Do you want a garage? Do you want an HOA, do you want how many bedrooms, how many bath? What type of building material do you want the property to be constructed of? Things like that. And I know you guys are probably so sick of us mentioning different links you can go to on BiggerPockets, but all of this stuff is free. All of this is free that you’re mentioning. We’re not trying to sell anything, but that’s another link is biggerpockets.com/rookie resource, and it’s a buy box template and you can go ahead and just click on it, download it, and then fill out that information to help guide you.
So for me, my buy box right now is, the next property I’m going to do is I’m going to do another flip and it’s going to be a starter home is basically my buy box. So I have three little towns that I’m searching in and it has to have a minimum of three bedrooms and a max of five bedrooms. So not super big wiggle room there at least two bathrooms to full bathrooms, and it has to be on an acre, at least an acre for these towns that I’m investing in. That’s where true value add is having that little bit of acreage. So those are a couple of different things that you should be looking at. I don’t want anything with a pool. I don’t want to have to make sure the pool is working. I don’t want to have to do updates and repairs to a pool. So different things like that. The more detailed you get, the slimmer your funnel will get to be. And yes, you’ll have less deals to analyze, but at least you’ll only be analyzing the deals that you really, really want.
Tony:
And for all the rickeys that are listening, you might be asking, well, how do I know what my buy box should be? And a lot of it’s you asking the questions or maybe answering the questions that we’ve kind of been talking about. Like Ashley said, what scope of project are you willing to take on? How comfortable are you going out of your own backyard? How much capital do you have to actually buy something? And as you start to answer these questions, your buy box kind of naturally starts to fill itself in. But that’s like the first piece of this equation, or at least the first piece of this fifth step. But once you have your buy box, the second piece is to then start finding properties that fit within your buy box and running the numbers on those deals. I think the analysis piece is one step where a lot of rookies make mistakes both on, they don’t analyze enough and they just see a property that looks nice and a nice area and they assume, okay, well if it looks nice and it’s a great area, it must be a great deal.
That is not how you analyze a property. You want to make sure that you have as much cold hard facts about the potential revenue on that property, the potential expenses on that property, and the potential profits on that property to see does this actually align with whatever return expectations I have for my real estate business? So making sure that you’re going through the process of correctly analyzing the deal. Now the flip side of that is true as well, where we’ve seen some rookies who maybe go too far to the extreme and they overanalyze and they get second analysis paralysis and they never buy anything because they feel like they don’t have enough data. So you got to find your sweet spot on that spectrum of not analyzing at all and being frozen in analysis paralysis to be able to find the deals that you’re confident enough in to actually move forward.
And I just think the last thing I’ll add on the analysis part is that there’s always risk in real estate investing. There is no real estate deal that it’s going to give you a guaranteed return. If you want a guaranteed return, you have to go buy a government bond, which I don’t know what bonds are paying these days, but a couple of percentages, percentage points. So just know there’s always risk. The goal to eliminate the risk in real estate investing, the goal is to build your confidence as high as you can, and once you feel confident in the deal, that’s when you know it’s sounded pull the trigger.
Ashley:
Okay, you guys, welcome back. If you haven’t already, make sure you are subscribed to the real estate Rookie YouTube channel. Okay, so next we’re going to be going over making an offer and what to do once you’re under contract. So there’s so many different ways to make an offer. If you’re using a real estate agent, they will definitely help you guide you through this process. But once you get under contract, there’s different things that you need to do as soon as you’re under contract. But Tony, let’s go over making an offer. What are some of the things as an investor that we need to consider when making an offer? We’ve done our deal analysis, we know what we can make the deal work for at what purchase price, what are the next steps from there to actually submit your offer?
Tony:
Yeah, I think first, and this is just mindset, is that the asking price, the listed price of a property is simply a suggestion and we have no idea what is going on in the mind of the seller, and maybe they’re much more willing to accept a number that’s lower than what they’ve initially listed it for. I feel like most people when they go to sell a property, understand there’s some form of negotiation in that. So typically they’re not just going to list it at their rock bottom price. They usually have a little bit of wiggle room there. So I see a lot of rookies who kind of get caught up because they’re like, oh, well, they’re asking this and the deal just kind of doesn’t make sense there, but the question isn’t, what did they list it at? It’s like, Hey, what number makes the most sense for you?
Ashley:
Yeah, I’m honestly one of those people right now. I’m trying to sell this property that I had bought, kind of held onto it and now just want to unload it, not doing anything with it anymore, and I would take a lower offer than what it’s sitting at right now too. So you never know.
Tony:
You find the right seller at the right time. When we bought our hotel in Utah, I don’t recall how long the property had been listed, but enlisted for a while, well over, I think they had initial lists for close to 2 million, and we bought it for just under a million bucks, same property, but it just sat long enough, the pain was strong enough for the sellers. They said, okay, cool. Hey, we just want to get this off our hands. So just from a mindset perspective, actually, I think there’s a lot of value in treating the listing price as a suggestion and always basing your numbers off of how does this deal make sense for me?
Ashley:
And then too, when you’re making your offer, you don’t have to make just one offer. I like to submit multiple offers. So the seller is getting the decision, which when people get to make a decision, they feel happy. That makes them, instead of getting something and like, oh, well you’re offering this, I’m going to counter it this so that I am getting what I want. That weird mindset thing of somebody wanting to have control of the situation, you give them two, you give them three offers, let them select it in their hands, they’re getting to choose. So one could be conventional financing, one could be seller financing, and one could be an all cash offer. So my all cash is going to be the lowest offer. I’m going to give you $80,000, do loan financing. I’m going to give you a hundred thousand dollars, you do seller financing, I’ll give you $115,000 as the purchase price.
And you can tailor up these different contracts, these different offers as to what your terms are going to be for each. But you could still have the same purchase price, but maybe change the contingency like, I’m willing to pay this amount, and on this one I’m willing to close on the property in this date, but I want seller credits, so I’ll close sooner, but I want $10,000 in seller credits. Then your other one could just be we’ll close whenever or whatever it may be, and you don’t have to pay me any seller credits. So there’s different things that you can negotiate rather than just the purchase price of the property too, to make it more appealing.
Tony:
We did an episode recently with Jay Scott, episode 525 where we talked about negotiating tips and tactics for real estate. So again, if you guys want a full deep dive on real estate negotiating episode 5 25 with Jay Scott. But I guess just one more thing to add to what you said, Ashley, I think when we think about negotiating real estate, there’s a few things, and you touched on a few of them, but just to clearly articulate it for the listeners, you have the purchase price, which is what I think most people think about when it comes to negotiating real estate, but that’s just one lever you can pull in addition to your listing price, there are things like if you’re doing a traditional real estate transaction, it’s like, Hey, what contingencies am I going to add? And maybe you can make your offer more competitive by reducing the number of contingencies.
Some of the common ones are you have a due diligence period, it’s like an inspection contingency. You have a financing contingency. Those are two of the most common ones. Sometimes if you’re in certain markets, you might have a sword type plumbing type thing, whatever it may be. But what contingencies are you including and which ones can you maybe not include to make your offer more competitive? We’ve heard some interesting stories from folks in the rookie podcast as well. People who were like, Hey, all I need is help moving. If you can help me move, I’ll give you a really good deal, right? And that’s something that’s so out of the box that you would never think would impact the ability to get the deal done, but the more you know about the seller’s motivations, the easier it becomes for you to solve that problem. So the point here is that there are more things to negotiate than just the listing price, and the more questions you ask, the better job you can do at providing the best offer to the seller.
Ashley:
So now that you’re under contract of the property, say you did your inspection, you went past through all the contingencies, and just a little side note is that I highly recommend if you don’t know anything about construction or rehabbing a property, and this is a property that needs work or maybe it doesn’t, maybe it is being sold as turnkey and in perfect condition, but you don’t know things to look for. I would highly, highly suggest getting the inspection done. Don’t skip that because there could be issues that you don’t even know. And when you’re vetting an inspector, make sure there’s certain things that they are going to do for you. I used an inspector for a long time and I didn’t even realize that there was way more capabilities until I went to a different market and used a different inspector and I was like, oh my gosh, taking a tool to the wall to make sure every wall was insulated.
My other inspector had never done that before. So little different things like that to make sure when you’re interviewing inspectors, what is their full scope? What are they actually going to give you? So once you’re under contract on the property, there’s other things that you need to do. You need to get your insurance in place, you need to switch the utilities into your name for your closing date. If this is a rental property for especially short-term rental or long-term rental, and I guess even midterm rental is setting up your systems of processes for the day that you close. So are there already tenants in place? If it’s a short-term rental, are there already bookings in place? Do you need to set up your bookings? Do you need to order furnishings? Do you need to hire a property manager? So start thinking about it gets so exciting when your offer is accepted and you’re under contract, but the work doesn’t stop there. That’s where the real work begins. And then you close on the property and it’s like, yay, I closed. But now you have to put all those processes in place that you worked on while you were under contract, and that’s when starts to take off for you and is exciting when you have that first deal in place. But you need to really focus on building out what is your business for this property and how are you going to asset manage it? How are you going to operate this property?
Tony:
You hit on so many good things, Ashley, that I think a lot of rookies don’t realize go into being a successful real estate investor. But I think that the main takeaway from what you said is that we have to approach even our first real estate investment as a business. And I think if we can just take off the hat of over just real estate investors to putting on the hat of we are entrepreneurs and business owners who just happen to be in the business of real estate, it gives you a slightly different perspective on how to approach even that very first deal because Ash and I have both gone through the growing pains of scaling a portfolio ineffectively to then having to go back and kind of rebuild it from the ground up. And it’s so much easier if you just take the time to do it the right way.
So everything actually said about having the systems, the processes, everything from making sure you turn on the utilities and turning ’em off. Those are the things that’ll save you headache as your portfolio continues to scale. I think the only other thing that I’d add to this is the goal is to get the first deal done, and hopefully you’ve done that, but also think about how you can leverage that first deal to get to your next deal. And I’ll give a really quick example, but let’s say that you’re able to save 500 bucks a month from your day job. That’s 6,000 bucks a year, and say you’ve got a starting pile of cash of about 50,000 bucks. So you’ve got 50,000 to start with $6,000 per year that you’re able to save. You take that 50,000 go out and buy a property and say you’re able to get, you’re doing rent by the room and you get a 30% return. What is that 15,000 bucks a year that you’ll get back on top of the $6,000 per month or $6,000 per year that you’re saving like two and a half years. You’ve got another 50 grand, now you’ve got two properties kicking off 15,000 bucks per month. So you can see how it starts to snowball. So one property gets you a lot further when you recycle those profits back into the business. You can go from one property to two properties to five in a relatively short period of time.
Ashley:
Well, thank you guys so much for joining us for this episode of The Ultimate Guide to Investing in 2025. I’m Ashley. And he’s Tony. And if you guys aren’t already following our new Instagram account, make sure to go check it out at BiggerPockets Rookie you’re watching on YouTube. Make sure you let us know in the comments what you want to learn or investing in 2025. Thanks so much for joining us. We’ll see you guys next time.
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