Dave:
Hey, everyone. This is Dave coming at you with another bonus episode. Just a few weeks ago, we released our first bonus episode and it got such great feedback, we decided to do it again. In this episode, I got together with Henry, Jamil, Kathy, and James to talk about whether or not you should still be considering investing in real estate even with today’s crazy market. We were actually just intending to make this as a YouTube video, but it was so good we had so much fun and there was so much value created, we decided to throw it up on the podcast feed so you could all hear it here. That said, if you haven’t already subscribed to our YouTube channel, you should definitely check it out because we are putting out a lot of content really regularly that doesn’t make it here to the podcast channel. We can’t get everything out on a podcast, so there’s a lot more content there on YouTube, and it’s a great opportunity for you to learn more from me and the rest of the crew.
But for now, please enjoy this bonus episode and as always, we’d love to hear what you think. This is On the Market, a BiggerPockets podcast presented by Fundrise. Hey, what’s going on, everyone? This is Dave Meyer and I am here today to talk about a super important topic, whether or not 2022 is a good time to invest in real estate. Believe me, I know there is so much conflicting and confusing economic information, so I brought my friends from the On the Market podcast. We got Henry Washington, Jamil Damji, and James Dainard joining me today to talk about what they are doing to invest in real estate and how you can jump into this market. Yes, you can do it even in this crazy market. In addition to all the insights, the panelists are about to share with you, we also have a ton of Easter eggs and free giveaways because we just felt like it honestly, and we have some amazing things to give away to you.
You can go to biggerpockets.com/datadrop and download all of the rent data that I have amassed for the top markets in 2022. In the episode, we giveaway Jamil’s Tricks to Underwriting. I built a house hacking calculator that you’re getting for free. All of the links are below. You can download them all 100% for free, commitment-free on biggerpockets.com, so absolutely go do that. There’s no reason not to. With that, let’s jump into our question of the day, whether or not you should invest in 2022. What’s going on, everyone? This is Dave Meyer, your host for today’s panel conversation about whether or not right now in this crazy hectic market we see in 2022, if it is still a good time to invest and to have this conversation. I have brought my friends from the On the Market podcast.
We have Jamil Damji, master flipper, and wholesale coming to you from Phoenix, Arizona. Then we have Henry Washington, buy-and-hold and short-term rental investor from Northwest Arkansas, and James Dainard, the certified deal junkie from Seattle, Washington. Thank you all so much for being here. Before we get your takes on whether or not you are investing right now, and whether you think the rest of our audience should be investing right now, I want to just give a summary of what’s going on. We are recording this in pretty much the middle of 2022, and since the beginning of the year, the housing market has changed pretty fundamentally, at least in my mind.
When we started the beginning of this year, we had interest rates that were about 3.1%, which is close to the lowest it’s ever been. Now, as of this recording, it’s above 6%, so they’ve nearly doubled. At the same time, we are seeing that housing prices are still going up. They’re up about 15% year-over-year as of May, which is not as high as it was last year, but is still ridiculous by historical standards. Inflation is running hot at about 8.4%. Inventory is still extremely low, but starting to tick up, and of course, many are calling for a recession. So I think it’s reasonable that a lot of people are wondering is now a good time to invest in real estate? Just quickly, yes or no. Jamil, is this a good time to invest in real estate, and why do you think so?

Jamil:
Absolutely. I think it’s a great time, because you can actually get out there and get some deals. So if you stick to the fundamentals of understanding your numbers, sellers are having conversations they were not having months ago. They are ready to deal. They are ready to take haircuts on their numbers. You can get out there and snag up some amazing opportunities, get at it.

Dave:
I love that, because that is super contradictory to what we hear a lot in the overall narrative about investing right now, but it sounds like you’re finding good deals. We’ll jump into that in a little bit, but Henry, what do you think? Yes or no, good time to invest?

Henry:
Yes, absolutely. Real estate’s cyclical. It’s either going to be hard to find deals and easy to get money, or hard to get money and easy to find deals. That’s how the market works, so jump in either one of those scenarios. There’s always going to be a challenge, no matter what the market’s doing. It’s about figuring out how to overcome that challenge and the best way that fits your financial situation.

Dave:
I love that. All right, James, are you going to be a contrarian here, or you also think it’s a good time to invest?

James:
Yeah, it’s always a good time to invest. Scared money doesn’t make money.

Henry:
Amen, brother.

James:
At any time you need to be ready, or at least for me, I’m always buying. It’s just about adjusting my numbers and changing things, but I am always a buyer in any type of market. It’s just a matter of what kind of deals are coming in my way. Like Jamil said, they are coming. We are seeing them rapidly coming our way.

Dave:
All right. Let’s jump into that idea that there are more deals. Jamil, you mentioned that sellers are now having conversations that they weren’t just a few months ago. Can you tell us a little more about that?

Jamil:
Absolutely. In Phoenix, Arizona, for instance, in the last say six months, if I was trying to buy something at even 70% of ARV, I was having a really difficult time. I’d been adjusting my numbers up and up and the fix-and-flip rehabbers had been doing the same thing over here as well. We were buying speculatively. It was starting to get pretty scary, to be honest with you and we were looking at our projects and we’d done great on them, but we thought, “Man, when we bought this deal, we really were underwater. The day we closed.” Now we’re back to the fundamentals. I’ve been having conversations with real estate agents who are representing sellers right now, who haven’t been able to move their property. I’m getting discounts of 150,000 or more from what their original asking price was just because they didn’t time the market right, so these conversations are happening. They’re happening every single day. My team is cleaning up.

Dave:
That’s really encouraging to hear. I want to just reiterate for everyone listening and watching this that Jamil is not saying he’s going on the MLS and just buying something that is at list price. He’s able to negotiate with sellers because the dynamics of the market have shifted. Six months ago, a year ago, it was probably the strongest sellers market ever, probably. I think sellers are starting to see that the scales are tipping a little bit more in buyer’s favor. In these transitionary periods, it can be an opportunity to buy. James, I know that’s something you always talk about is looking for opportunities in these transitionary periods. You are a buy-and-hold investor. I know Jamil, we might have convinced him to do his first buy-and-hold the other day, but-

Jamil:
Closing July 11th.

Dave:
… are you seeing the same kind of dynamics in the buy-and-hold market as well as in the flipping and wholesaling market?

James:
Yeah. We’re seeing things across the board. It’s kind of amazing, because everyone keeps talking about, “Hey, rates are so high, you can’t make anything pencil,” and that is just not true. We looked at four deals on market on Monday that all cash flow above 10% cash-on-cash returns at 30% discounts and really good BRRR opportunities. We’re definitely seeing that things are balancing out now to where you can look at a property and go, “Okay, does the math work or not?” Then you get the time to evaluate it correctly, and then you can write your opera accordingly. But the market is definitely balancing out and it is making for great opportunities, and that’s why we’re just changing numbers around. We have lots of people reaching out to us on a daily basis right now like, “Hey, what will you pay?” We’re giving them the numbers. They might not be happy with them, but people are definitely starting to play ball.

Dave:
That’s really interesting. I hadn’t even thought about the fact that lower competition in the market right now means that you have more time to underwrite your deals and you can actually sit and think about something probably for the first time in two straight years. Everything was going in four or five days before, so now you can actually have some time.

James:
Yeah. Before you start throwing out hundreds of thousands of dollars, you actually can think about it for a second. The last 12 months was like, “Okay, cool. I’ll buy it. Here’s a half million dollars.” It’s like, what is going on?

Dave:
It is. It is a benefit to investors to be able to have some time to think about this. Now, I’m sure there are people watching this thinking, “These are three successful investors with sophisticated marketing apparatus, great deal flow, and they’re biased,” because you all like real estate investing. That’s your business. Henry, what do you say to that? Do you think there is some validity to the fact that we are all biased, and how do you respond to something like that?

Henry:
I think the bias comes from the success and not just success, but life- changing success that we’ve seen and how this vehicle has not only provided us a return on our investment, but provided us the ability to be good stewards of other people. We spent the first half-hour before we started recording talking about something really kind, James was able to do with some money that he made. So the bias comes from us understanding how powerful of a tool this is to change people’s, not just their lives, but their family tree.
It’s a generational wealth building tool, so I say that if we are biased, that should excite you, because we are biased because it’s such an amazing vehicle. You look at the stock market and you think about you’re building wealth, you’re generating some income. It’s more just like thinking about individually, what that can do real estate gives you that and the ability to be a blessing beyond just yo because of the abundance it can provide. So if we sound biased, we probably are, but that should be super exciting to you, because we just want you to be able to experience some of the amazing things that this tool provides.

Dave:
A lot of people ask me and they say you’re biased or people feel that there’s fear. Basically, they’re thinking that there is going to be a market correction seems to be the idea that people in the real estate space are either deliberately or are blindly ignoring the fact that there is going to be a market correction. The only true answer is, no one really knows what’s going to happen. I certainly have my opinion. I think I know you all have your opinions about what’s going to happen, but there is a genuine fear that people don’t want to buy at the top of the market. I think even people who want to invest in real estate and are bought into the idea long term of investing in real estate say, “Why would I buy right now? Interest rates are high and the market could correct.” So Jamil, I’m curious, how do you handle that fear and how do counsel other real estate investors to managing that?

Jamil:
Well, that fear always exists. I’ve been hearing people tell me that the market was at its peak so many times on the ride up. Look, I can absolutely say that we’ve hit a threshold. We’ve hit a threshold of affordability. We’ve hit a threshold of interest rates. We’re in an interesting spot. At the same time, I believe that when you’re looking at real estate and you’re looking at it over time, we’ve gone up. We always go up, and even though you get these little blips where values can decrease, you got to look at the use case. Like, what are you doing with the property?
My friend, Pace Morby, has a saying, and I love it. It rhymes. He says, “The equity comes, equity goes, but the cash will always flow.” So if you’re looking at a deal and if you’re looking at it from a short-term perspective and you might lose a little bit of money in equity, well, are you still making money in cash flow? You’re really only losing anything if you sell at this time. So I’m about to make a purchase for $12.5 million on a multi-family building. I was talking to James before we started the show today, and does it make me nervous? Absolutely, guys. It, for sure, makes me nervous, but I have a plan and I know the fundamentals of what I’m doing. I love the location of the property.
There’s an absolute opportunity for me to increase rents. I’m going to depreciate a lot of my income, so I’m going to save money on taxes. This makes financial sense. I’m using the fundamentals of real estate to increase my wealth. In a hot market, in a not-so-hot market, I’m still making money. One more thing, yesterday, I was able to trade a $25,000 assignment fee. In this crazy market where all this fear is everybody’s talking about, “Oh my God, this and that,” well, what about the $25,000 that I made yesterday? Is that biased or is that actual money?” That’s money, so if you understand how to do this and how to make proper moves, and if you’ve got the liquidity partners, you’ve got the buyers ready, you’ve got sellers ready to have conversations with you, you can always make money.

Dave:
That’s great advice. Obviously, it really just depends on the strategy, and there’s so many different ways you have to operate differently in each type of market. You said something, Jamil, that you use Pace’s rhyme. You said that the cash will always flow. James, you often hear, and there are fears of recession. I saw something recently where Bloomberg said that the risk of recession is about 75% right now. In my experience, I haven’t seen rent go down, even in recessions. I haven’t lived through as many as other investors have, but you can look at the data for this and see that it hasn’t. Are you afraid that rent is going to go down if there is a recession? If so, how do you mitigate that possibility in your own investing?

James:
I think it depends on the market that you’re in. Some markets are definitely really elevated. People living in secondary home areas that moved out for pandemic reasons, I do think those rents are going to come down. Those are pretty juiced up right now. How we do it is, we focus on where the money is and the jobs are, and we’ve always had good success. Even back in 2008, when the market crashed, I didn’t see a lot of rent drop. They actually stayed very stable. The big difference was it took 60 to 90 days to fill rather than a week or two, and it was just a longer time to fill up your units, but we didn’t see a lot of rent drop. Things that we’re looking at is, like right now, we just wrote an offer on a 90-unit building up in Everett, Washington, but it’s downtown. It’s next to the jobs. It’s still very affordable.
Our average rent or unit per rent or, it’s a 1.75, a foot that we’re performing and out, and so we’re staying where the affordability are. Then, we’re also looking at staying away from different types. I wouldn’t go buy luxury apartment buildings right now, because I don’t want to go chase those really, really high rents. When those rents went from 3,000 to 4,000 in Washington, that’s a huge jump and that can come back pretty aggressively. But the affordable stuff, if you’re around that median home price and you are staying in that median price range, that stuff doesn’t really flex much.
Then, the other thing that we do is we make sure we get good tenants in and we don’t slum board. Everything gets renovated to a high caliber because our quality of tenant that’s coming in is good. They appreciate living in a good spot, so they’ll actually rent quicker and they don’t mind paying more money for a good unit. So everything that we look at right now, we have full stabilization numbers in. We have big budgets, and that deal has to work with all of this in there, or we won’t buy it because we want it turnkey. We want low maintenance. Then also, with inflation going up, we also don’t want this building to bleed us out for two to four years. So by stabilizing these correctly, you get better tenants, rent don’t fall, less money out of your pocket.

Dave:
Love the idea of just producing a great product that attracts a great tenant or a great customer. It’s a surefire way to continue to generate the same kind of income that you are expecting or that you underwrite your deal with. Just for reference, James is right. Just to provide some data here, back in 2008, housing prices dropped nearly 20% nationally and rents, they stayed pretty flat. Of course, it depends market to market, but just on a national basis that is pretty dramatic, because if people do stop buying as many homes, maybe they need to rent. Just for some further context, right now, vacancy, as James is saying, it could start to go up in a recession. It is at its near all time low.
Vacancy is extremely low for the same reasons, or one of the same reasons we’ve seen housing prices go up so much is because there’s just not enough homes. Some of what, basically, what I’ve heard all three of you talking about so far is that we need to adapt. You can’t just go out and buy anything in this kind of market. You have to be smart. That’s always true. I guess maybe the last two years you could have just shot from the hip and done okay, but we’re getting back to the area where we need to be smart and considerate. Henry, what’s one strategy or one niche within the whole realm of real estate investing that you think makes sense in this type of economic climate?

Henry:
Oh man, absolutely. I’m always going to be a big proponent of house hacking, because when you’re looking at a tough economic climate, one of the things you want to be able to do is create more income, or reduce expenses and then be able to invest the difference, some sort of hedge against the economic factors that are pushing against you right now. So when you look at something like house hacking, it is fairly low ceiling to get into it. You can find a deal that works from a house hacking perspective, pretty much on the market and almost any market because you are also going to factor in that you are going to be eliminating a mortgage or reducing it substantially by creating income from that property that you’re living in. It’s also low barrier to entry as far as cost to get into the property, because you can utilize a convention or an FHA owner-occupied loan and get in with 5% down, sometimes even three-and-a-half percent down if you can qualify for an FHA; sometimes even less, if you can qualify for a VA loan.
There’s no down payment, or there’s assistance programs like NACA, Neighborhood Assistance Corporations of America, where you can get into it without having to pay a down payment and they will pay your closing costs. So there’s all these types of programs that you can leverage to get into a multi-family asset or even if it is a single-family home and you rent out rooms, there’s multiple options, and that’s what I like about it is, you can take the place that you live, use it to create income and decrease expenses, which gives you this surplus, if you will, of money that you didn’t have before, which now you can use to either make your ends meet if you’re in that position, or set it aside so that you can invest in something that potentially you’re not living in, but it’s one of the easiest ways to do all of the things, which I think you need to do when economic constraints are tight, which is, save money and figure out a way to make more money.

Dave:
That’s awesome. I think house hacking is just such a no brainer for people, especially if you’re just trying to get started. Rent is so expensive right now, you’re probably not saving that much money renting. Even if you’re fearful of the market, you can probably reduce the amount you’re spending. We actually mentioned this on the On the Market podcast in a recent episode, but I did create a tool. It is a calculator where you don’t just look at whether you buy or own, there’s plenty of things out there in the media where you can do a buyer or a rent calculator, but this is a buy, rent or house hack calculator that can show you if and how much money you can actually save. We will put a link to that in the description below. You can download that completely for free on BiggerPockets. Jamil, what about you? What would your one niche or strategy advice be for people who are looking to jump into real estate investing right now?

Jamil:
Well, I think if you’ve got fear of holding a property and worrying about the equity potentially disappearing, really understanding the fundamentals of wholesaler. I don’t just say that because I’m a wholesaler, I’m saying that because if you are fearful, then trading is the way to go. I was fearful coming out of the last recession because I got burnt in 2008. I lost millions of dollars. This is my second go around, so I learned what not to do last time, and that was collect a ton of leverage and get overextended. I’m not in that position, but I can tell you this, that I traded property on the way down. I traded property at the bottom and I traded property all the way up, and I made money being able to do that. I sustained my life because I was able to understand how to wholesale contracts.
So I’m telling anybody who’s out there right now, if you’ve got fear, if you think, “Hey, I don’t want to buy a property and hold it right now, because I’m worried I might lose 10 or 20% in equity if a correction happens,” understand the fundamentals of wholesale, get yourself involved. You can wholesale a transaction. You can wholesale a house with an earnest deposit and just understanding the values and understanding the fundamentals of what a property is worth. Guys like myself, Henry, James, we’ll buy those deals from you, so you can actually make tons of money understanding how to wholesale properly. I think right now, especially if you have any fear, that’s the way to go.

Dave:
That’s great advice, because it’s relatively low-risk compared to a lot of other real estate investing strategies. Jamil, you previously on our podcast gave away some underwriting advice and a spreadsheet that we were giving away on BiggerPockets. Now that I just talked about giving away my calculator, would it be okay if we linked to that in the show notes as well to that people can go download?

Jamil:
Absolutely. Absolutely. They’re called the Appraisal Rules, guys, and you can follow them to understand how to really hone in on how much a property is worth and what its potential is.

Dave:
Awesome. Well, thank you. You can download that for free, again, in the description below. We’ll have the link there. All right, James, what about you? What strategy would you bank on here in 2022?

James:
All of them, because [inaudible 00:24:16] at the end of the day, a deal’s a deal. It can be a great wholesale deal. It can be a great flip deal. It can be a great buy-and-hold and not all those are the same, but the biggest thing that I have had to do in the last 90 days is really establish my buy box. I see a lot of people, the people with fear are the ones that go, “I don’t know what’s going to happen and I don’t know what I want to do.” So the first thing you want to do is narrow down what you want to do. So for each sector that we work in for wholesaling, we have a buy box like, “Are we going to keep that deal or sell it?” We know what deals we’re keeping, what deals we’re going to wholesale off.
We know if we’re looking at a buy-and-hold, whether it’s a two to four unit or 20, 40, 50 units or above, we’d have our buy box and our process set in play. If it hits this return and we can get this kind of debt, we will buy the deal. Then with fix-and-flip, it’s the same thing, because fix-and- flip, I keep hearing that it’s very risky. It is. It’s always been very risky. It’s been very lucky the last 12 to 24 months. If you flipped a house and you made a lot of money in the last 24 months, half of it was luck. I’ve flipped a lot of homes, and I know that I got lucky the last 24, but you can flip in any kind of market. 2008, we were crushing the market flipping and that market was dropping, like you said, 20% in a year and we still made margins.
So you just have to buy your right plan behind your buy box. We don’t go and buy a house, design the whole thing before we have architect plans back. We want to know where our window schedule is. We want to know how it’s laid out. What’s the actual theme of the house. If we went and designed that down the road, we’re going to have a disaster. So you don’t want to just go buy without really putting together that core fundamental, which is, “This is what we’re doing. This is what I’m trying to accomplish, shrink my numbers down. If I still want to flip, I’m just going with bigger margins now. I want 20 to 25% returns and I want to have 10 to 20% on my construction budgets, and then I’m padded all the way through.” The more people walk away from flipping, the harder I’m looking at it because that’s my biggest opportunity area.

Dave:
This isn’t theoretical, you’re actually doing this. You’re finding these deals right now.

James:
Oh, yeah. The margins we’ve seen have been at least 2X what we’ve been seeing the last 12 months. I got a call yesterday from a seller that we actually gave an offer to nine months ago, a builder beat us out. They beat us out by 50 grand, but they had a very long close and they were supposed to close actually today. The builder just walked away from their earnest money, $40,000, and they’re out that deal. These people have already packed their house up and moved, and they just got notified two days before. So they call us panicked and they say, “Hey, can you buy this?” Then, for us, we’re not going, “Hey, well, how do we get this just for nothing?”
We’re going, “Okay, well, we have to reevaluate this property. Here’s our new margin.” We educated them on what’s going on in the market and they know, but then we educated a little bit more about the impact of rates and the math behind it. Now, they just took an offer, we gave them an offer 150 grand less than we gave them nine months ago. It’s in a great neighborhood, and they’re going to take it because it’s very logical at that point. So for us, by not getting that deal nine months ago, I just made $150,000 more in value. So as things get scarier margins increase. The last 12 to 24 months were not normal.

Dave:
Is the same true for you, Henry? Are you seeing pretty good deal flow? Can you share with our audience, I’m assuming you’re getting pretty good deal flow, but assuming that you are, where are you finding those deals?

Henry:
Yeah. Yeah. Real quick, to piggyback on what James and Jamil both said, the best insulation for risk is to buy great deals. I know that that sounds generic, but in essence, what that means is, you have to figure out how to go find people who have motivation to sell and equity. We’re buying situations. You heard James just explain a situation that caused him to get a good deal. We’re not buying houses, we’re buying situations. So if you can get good at finding those situations, and they need James, they don’t have another option, and so when you create those win-win scenarios by providing people who need to sell with a solution, then you can get good deals.
The better margins you have, the better deal you buy, the more you insulate yourself from problems. So if the market shifts, James can either reduce his asking price and still make a profit. He can potentially put a tenant in there and keep it as a rental. When you have the margins of buying a good deal, then you can have multiple exit strategies and multiple exit strategies is what helps you reduce the risk. If he goes over on his renovation budget, he’s got cushion. It eats up some profit, but if you’re making 80 grand instead of 92 grand because you went over 12K, you’ve given yourself some cushion.
So being able to figure out how to find and purchase good deals or put them under contract, in Jamil’s case, is how you’re going to be able to insulate yourself from the things that most people are scared of when it comes to real estate investing. For me, Dave, we’re absolutely still finding good deals. I am getting more leads coming to me now than before when I was having to go out and push for leads. So now people are trying to come find me, because again, it doesn’t matter what the market is doing, if the market’s high or the market’s low, it doesn’t dictate if a person’s going to be in a tough situation. People get in tough situations, no matter what the market’s doing.
In fact, there’s more tough situations when economic conditions are the way they are now, it creates more difficult situations where people are going to struggle to sell. It also thins the pool. It thins the pool of investors and buyers to the ones that are the most serious and the most prepared. So if you are consistently trying to align yourself with the people who are moving and shaking in the industry with the people who are getting deals done, then you won’t have a problem making money in those environments because whereas, a year or so ago, maybe even six months ago, if you put a house under contract, there was a million hands going up to buy that deal.
There’s less hands going up to buy that deal now, and so the people like Jamil and James and myself who are connected with the people who are ready to jump and do those deals are the ones who are going to make the money. So right now, there’s more deal flow coming. Access to money is what’s getting a little more difficult, traditional money that is. So it’s always going to be a two-pronged approach. You’re going to have to figure out how to solve your deal flow problem and solve your money flow problem so that you can buy those deals. So if you can solve both of those problems, I think you’ll be able to make money in any market, but man, we’re getting great deal flow right now, Dave. Mostly I do direct mail and cold calling, but as of, I would say, the past two weeks, people have been calling me.

Dave:
That’s amazing. For people out there who want to get started, maybe they are listening to this, hopefully they’re inspired by all of you and your wise advice. Jamil, what advice do you think, what would you give people in the next 30 days? If they just want to start and take action and jump in on these opportunities you’re describing, what is one or two steps that they can take right now to move towards that first deal?

Jamil:
Well, direct mail can take some time and cold calling can obviously take some resources and time, but there is nothing that costs less money than going to the MLS. Guys, listen to this. You can go to the MLS right now and look at anything that’s been on the market 30, 60, 90 days. Believe me, realtors right now are more sensitive to this situation than sellers are. You can pick up the phone, you can have a conversation with a realtor right now and ask them, “I see this property isn’t selling, and the world has changed. Is your seller ready to have a real conversation about where this property’s going to trade at?”
Use that listing agent as your buyer’s agent and incentivize them with a double commission and go offer on that property at a number that’s going to make sense for somebody. Come to me and I’ll be your buyer. I’ll tell you what to lock it up at and make a profit. That’s the first step. You can get a deal done right now in a matter of weeks by having that one hack. Go right directly to the MLS, go get some agents, build some rapport with them, have them represent you as well so they’re double incentivized to work with you. Bring me the opportunity and go make a check.

Dave:
All right. That is great advice. I do think, James, you told me the other day that you’re getting a lot of on market deals right now, but do you have any other tips, anything, not just deal flow, anything that you think could help someone achieve that first deal in the next couple of weeks here?

James:
Yeah. Just the first step is to find what you think is a good deal. That is the most important thing. If I don’t know what a good deal is, I can’t go out and go find it at that point. But yes, we are getting a ton of properties on the MLS. Honestly, the deals are really good because it is the market is telling them what the activity is. When someone lists a property on the market and they get zero showings in the first week, they are concerned, especially after what they saw from 90 days ago. So the market really tells them where it’s at, but where we’ve been getting most of our deal flow is, is we’re defining what it is, and we’re looking on the MLS. We’re using call rooms now to get mass coverage.
There’s a company call Magic we just used because we want to be able to hit more people, because as there’s more fear out there and people are wanting to make that next decision, I want to touch more people. So we’re able to hit five times as many more people. We ramp that up, so we’re doubling down on all of our marketing efforts, because as people stop contacting, I’m going to increase my contacts. Then the other thing is, like Jamil said, is talk to real estate brokers. Real estate brokers are the best avenues out there. They’re talking to tons of people.
They have tons of clients that have been thinking about selling for 12 months and now their clients are having FOMO and they’re going, “I missed it,” and they’re rushing to get to the market and they want to rack in whatever equity they still have in that property. So reach out to all your brokers and let people know what you’re looking for. Don’t just say, “I’m out buying deals,” tell them what kind of deals you’re looking for, what returns you want to be at, set the tone and then start talking to everybody and expanding your marketing network, and you will get more opportunities.

Dave:
It just seems like what’s holding so many people back is just the fear without any actual action. The things that you’re talking about, just going and actually calling someone, going and running numbers on a deal, even if you know that’s a bad deal, just teaching yourself the skill to be able to run the deal, know what a good deal looks like, these are the actions that you can take for free. It doesn’t cost anything. There is zero risk in doing research and learning whether you can actually find a deal, and I think a lot of people think, “Oh,” they come up with these ideas or these scenarios in their head, “There’s no good deals,” or, “It’s too risky,” but you don’t actually know that until you go out there and actually do something and actually look at a deal, talk to a broker.
For everyone watching this right now, there are so many free resources we have on BiggerPockets. If you want to find a investor-friendly agent, you can do that for free. If you want to download the stuff I was talking about, you could do that for free. You want to learn how to analyze deals, you could do that for free all on BiggerPockets. If you want to start taking action on real estate, if you agree like James, Henry, Jamil that this is a good time to invest in real estate, definitely head over to biggerpockets.com. It is entirely free. There’s a community of more than 2.5 million real estate investors who have found success in real estate through the same thing that these guys are talking about, and you can do it absolutely too, so go check that out.
James, Jamil, Henry, thank you all so much for being here. This is a super important conversation. If everyone watching this likes this kind of conversation about what’s new, what’s happening in the world of real estate investing, you should check out our podcast, we have one. It’s called On the Market, there will be a link below. We have our own YouTube channel. You can see all of their beautiful faces regularly there making some great content for all of you, and so hopefully check that out. Go take some action. Thank you all for being here. We’ll see you all again real soon. On the Market is created by me, Dave Meyer and Kailyn Bennett, produced by Kailyn Bennett. Editing by Joel Esparza and Onyx Media, copywriting by Nate [inaudible 00:37:36] and a very special thanks to the entire BiggerPockets team. The content on the show, On the Market are opinions only. All listeners should independently verify data points, opinions, and investment strategies.