3 Cash-Flowing Real Estate Deals in 2025 (& Where We Found Them)

Summary

BiggerPockets Real Estate Podcast Episode: 3 Cash-Flowing Real Estate Deals in 2025 (& Where We Found Them) Release Date: May 26, 2025

In the latest episode of the BiggerPockets Real Estate Podcast, Ashley Kerr takes the reins from host Dave Meyer to delve into three distinct real estate deals presented by Garrett Brown, a short-term rental expert and host of the newly launched Bigger Stays YouTube channel. This episode, titled "3 Cash-Flowing Real Estate Deals in 2025 (& Where We Found Them)," offers listeners a comprehensive analysis of each property from multiple rental perspectives, providing invaluable insights for both novice and seasoned investors.

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Introduction

Ashley Kerr opens the episode with a warm welcome, emphasizing the abundance of profitable real estate investments available in the current market. She sets the stage for an engaging discussion by introducing Garrett Brown, who brings three distinct property deals from different locations and price points. The primary focus is on evaluating each property as both a short-term and long-term rental, highlighting the strategic considerations necessary to maximize returns.

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Deal 1: Fredericksburg, Texas

Property Overview:

• Location: Fredericksburg, Texas
• Type: Single-family home
• Size: 1,800 sq. ft.
• Price: $449,000
• Features: 3 bedrooms, 2 bathrooms

Short-Term Rental Analysis:

Garrett Brown presents the Fredericksburg property as a high-performing short-term rental market, especially appealing due to its proximity to Austin and its burgeoning local attractions like wineries. He states, “This city rings bells with anybody within Texas of a travel destination here” (Garrett Brown, 01:29).

• Projected Revenue:
  • Baseline: $74,000 annually (Garrett Brown, 03:15)
  • Potential with Enhancements: Up to $120,000 annually by adding amenities such as a hot tub and improving the backyard (Garrett Brown, 04:10)
• Occupancy and ADR:
  • Occupancy Rate: 46% (AirDNA baseline)
  • Average Daily Rate (ADR): $437

Long-Term Rental Analysis:

When analyzing the property as a long-term rental, the numbers reveal a less favorable outcome.

• Estimated Monthly Rent: $2,490
• Monthly Expenses:
  • Mortgage (20% down, 30-year fixed at 6.63%): $2,200
  • Taxes: $378
  • Insurance: $150
• Total Monthly Costs: ~$2,800
• Conclusion: The property does not pencil out as a long-term rental, yielding a thumbs down for this strategy (Ashley Kerr, 08:55).

Key Insights:

Garrett emphasizes the critical role of amenities in boosting short-term rental revenue. He notes, “The secret sauce for short term rentals is it's the purchase price. … and how you can get up to that 100,000, 120,000 gross revenue per year is the amenities that you add and then being able to get your average daily rate and your occupancy goals up” (Garrett Brown, 03:50).

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Deal 2: Wheeler, Oregon

Property Overview:

• Location: Wheeler, Oregon
• Type: Single-family home
• Size: 1,300 sq. ft.
• Price: $339,000
• Features: 3 bedrooms, 2 bathrooms, ocean and mountain views

Short-Term Rental Analysis:

Garrett introduces Wheeler, Oregon, highlighting its natural beauty and tourism appeal. The property boasts immaculate views, making it an attractive short-term rental option.

• Projected Revenue: $65,000 annually
• Occupancy Rate: 55%
• ADR: $330
• Cash on Cash Projection: ~4% (baseline)

He explains the potential for increasing returns by enhancing property amenities and possibly adding a tiny home or ADU (Garrett Brown, 14:30).

Long-Term Rental Analysis:

Using BiggerPockets’ rent estimator, Ashley assesses the property as a long-term rental:

• Median Monthly Rent: $1,100
• Mortgage and Expenses: ~$2,000 monthly
• Conclusion: The long-term rental does not financially support the property, resulting in a monthly deficit of approximately $900 (Ashley Kerr, 15:10).

Mid-Term Rental Opportunity:

Garrett pivots to explore the mid-term rental market, considering Wheeler’s proximity to natural attractions which attract professionals and academics seeking furnished accommodations.

• Potential Monthly Cash Flow: $3,000 - $4,000
• Strategic Consideration: Diversifying rental strategies to include mid-term rentals can mitigate risks and enhance cash flow (Garrett Brown, 18:00).

Key Insights:

The discussion underscores the importance of flexibility in rental strategies. Garrett advises new investors to analyze properties from multiple rental perspectives to ensure adaptability in changing market conditions.

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Deal 3: Waco, Texas

Property Overview:

• Location: Waco, Texas
• Type: Single-family home
• Size: 1,400 sq. ft.
• Price: $275,000
• Features: 3 bedrooms, 2 bathrooms, furnished

Short-Term Rental Analysis:

Waco, driven by the influence of Chip and Joanna Gaines, has emerged as a vibrant short-term rental market. Garrett highlights the property's strategic location near major metro hubs and Baylor University.

• Projected Revenue: $42,000 (baseline) vs. neighborhood comps of $52,000 - $65,000
• Occupancy Rate: 52%
• ADR: $220
• Cash on Cash Projection: Negative 15%
• Furnishing Advantage: The property is already furnished, reducing upfront costs significantly (Garrett Brown, 22:55).

Long-Term Rental Analysis:

Ashley uses the rent estimator to evaluate the property's long-term rental potential:

• Median Monthly Rent: $1,600
• Monthly Expenses: ~$2,100
• Conclusion: Similar to previous deals, long-term rental does not support financial viability, leading to a monthly deficit (Ashley Kerr, 28:00).

Mid-Term Rental and Co-Living Opportunity:

Given Waco’s proximity to Baylor University and the bustling local economy, Garrett considers mid-term rental and co-living strategies as viable alternatives.

• Potential Monthly Cash Flow: $3,000 - $4,000
• Additional Strategies:
  • Dividing the lot to sell a portion and offset costs.
  • Combining short-term and long-term rental strategies for diversified income streams (Garrett Brown, 29:30).

Key Insights:

Garrett emphasizes the significance of understanding local market regulations and leveraging existing property features, such as furnishings, to enhance rental attractiveness and financial performance.

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Operational Strategies and Investment Advice

Throughout the episode, both Ashley Kerr and Garrett Brown provide strategic advice for real estate investors:

1. Importance of Amenities:

   • Enhancing property amenities can significantly boost short-term rental revenue. Simple additions like hot tubs or improved outdoor spaces can elevate a property's appeal and justify higher ADRs (Ashley Kerr, 04:10).

2. Diversifying Rental Strategies:

   • Investors, especially those new to the market, should consider multiple rental strategies (short-term, mid-term, long-term) to maximize returns and mitigate risks. This flexibility is crucial for adapting to market fluctuations and tenant demands (Garrett Brown, 06:12).

3. Negotiation Tips:

   • Properties lingering on the market for extended periods may offer negotiation opportunities. Engaging with experienced agents and making strategic offers can secure better purchase prices or seller credits, enhancing cash flow potential (Garrett Brown, 30:07).

4. Data-Driven Decision Making:

   • Relying on data sources like AirDNA and BiggerPockets’ rent estimator ensures investment decisions are grounded in accurate market analysis rather than emotions. Analyzing comparables and understanding local market dynamics are essential for making informed decisions (Ashley Kerr, 05:28).

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Conclusion and Final Takeaways

The episode concludes with a recap of the three deals, emphasizing the importance of comprehensive analysis and strategic planning in real estate investing. Ashley and Garrett reiterate that while some properties may not initially seem viable under certain rental strategies, creative approaches and thorough market research can uncover profitable opportunities.

Final Thoughts:

• Stick to the Numbers: Avoid emotional attachments to properties by relying on solid financial analysis (Ashley Kerr, 31:37).
• Be Adaptable: Flexibility in rental strategies can unlock hidden potential within properties (Garrett Brown, 22:57).
• Leverage Expertise: Working with knowledgeable agents and utilizing expert tools can enhance investment outcomes (Garrett Brown, 30:18).

Garrett and Ashley invite listeners to engage further by visiting the Real Estate Rookie Channel and Garrett’s Bigger Stays YouTube channel for more in-depth analyses and real estate insights.

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Notable Quotes:

• Garrett Brown (03:50): “The secret sauce for short term rentals is it's the purchase price… and how you can get up to that 100,000, 120,000 gross revenue per year is the amenities that you add and then being able to get your average daily rate and your occupancy goals up.”

• Ashley Kerr (04:10): “That's one of the highest performing short term rental markets in the country… it's a great market for you.”

• Garrett Brown (05:28): “…make sure that it can also possibly work as a long term rental or even a midterm rental because you want a few different exit strategies.”

• Ashley Kerr (06:12): “You're looking at all perspectives and make sure there are comps that can support what you're planning on trying to do.”

• Garrett Brown (30:07): “There's nothing wrong with working with a good agent… list prices are just a suggestion.”

• Ashley Kerr (31:37): “Sometimes you'll be way more emotional with a property when it performs really well and cash flows great than if you just liked it when you walked through for the showing.”

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This episode serves as a valuable resource for real estate investors seeking to navigate the complexities of property investments in diverse markets. By dissecting real-world deals and offering practical advice, BiggerPockets continues to empower its audience towards achieving financial freedom through savvy real estate investing.

Transcript

[Ashley Kerr]

No matter what anyone else tells you, there are profitable real estate investments available on the market right now. You just need to know how to find them and how to implement the right business plan to maximize your returns. Depending on the property and the market, that might mean a short term rental strategy or a long term one. Today we'll show you how to project expenses, revenue and other key metrics for either strategy. Select the best one to achieve your goals and put yourself on the path to financial freedom.

[Garrett Brown]

Foreign.

[Ashley Kerr]

It's Ashley Kerr guest hosting the Bigger Pockets real estate podcast for Dave Meyer. Today I have Garrett Brown here with me, Bigger Pocket short term rental expert and host of the brand new Bigger Stays YouTube channel. Garrett, how are you?

[Garrett Brown]

I'm doing great. I am super excited to be back talking deals with you, Ashley, and it's one of my favorite things to do at any time.

[Ashley Kerr]

We have a really fun show lined up for you guys today. I gave Garrett some homework and he brought three real on market deal deals with him. They're in three different locations and at three different price points. We'll analyze each one as both a short term rental and as a long term rental so you can see the pros and cons of each strategy. Along the way, we'll share a few key methods we use to break down deals that you might be missing in your own property analysis. Okay, Garrett, are you ready?

[Garrett Brown]

Born ready.

[Ashley Kerr]

Okay, so Garrett, what is the first deal that you brought us today to analyze?

[Garrett Brown]

So the first deal is in Fredericksburg, Texas, which this city rings bells with anybody within Texas of a travel destination here, but maybe not for other people. This is one of the highest performing short term rental markets in the country. But it's also about 30 minutes away from Austin, Texas and it's a, it's, it's its own booming metropolis in many ways. It has many wineries. It's like a really cool tourist destination for a lot of people. But it's grown in just general size in the last few years. So there's a three bedroom, two bath property that has been on the market, the market for a good bit that I've had my eye on. It's about 1800 square feet and it's priced at about 449,000 right now. But when I analyze it as a short term rental, it can project the revenue of being almost $74,000, which was the shocking part about that is that's actually one of the lower projected revenues in the neighborhood that it's in. There's a few of them that are performing with $120,000 a year revenue, $100,000 a year revenue. But the secret sauce for short term rentals is it's the purchase price. I don't want to say it's irrelevant with short term rentals, but the thing that really pushes the needle and how you can get up to that 100,000, 120,000 gross revenue, mind you, per year, is the amenities that you add and then being able to get your average daily rate and your occupancy goals up. Air DNA, they're kind of the short term rental data expert, for lack of better words within the industry. And their projections are it's going to have a 46% occupancy rate with a 4, $437 average daily rate, which is what you could bring in as a short term rental. But the key with air DNA, and they'll tell you this themselves, is that's just a baseline number. You want to go in and really analyze your competition and comparables that are nearby. And after I did that, using Air DNA and tools like Airbnb, I see that something as simple as adding a hot tub and making the backyard just, you know, a little nicer and welcoming, that's how you could probably get to that hundred thousand, one hundred twenty thousand revenue side that we're kind of looking for. Because my current cash on cash projection, if we just use the baseline air DNA numbers, is pretty low. It's close to about 1%, which is, you know, I would never say anybody to do that deal. But where the true short term rental investors and the ones that have been winning in some markets is they go in and to analyze these and actually you're able to beat the Air DNA projections quite a bit if you're able to analyze your competition and see what they are doing so well, that is getting them to that top of the market to reach that, you know, 100,000, 120,000 that we're hoping for. If we add a few simple amenities and keep our renovation cost and furnishings in line, we should be able to get it up to closer to about 15%.

[Ashley Kerr]

Well, first I want to point out how you're taking into account the operational piece. So you're looking at the numbers of this property and like on the Rookie podcast, we constantly stress, like, what do the numbers say? Like, stick to the numbers, don't get emotional about a property. But I think the difference between long term rental and short term rental is that you have that hospitality piece, that operational piece, where you are able to almost manipulate the numbers. In a different sense because of that operational piece where as long term rentals like yes, you can have a better performing property because it has nicer amenities or your, you know, better property manager, people will pay more to stay there, whatever that may be, that's it's not going to move the needle that much. Like you have to stick to your projected rents where in your case you can manipulate to actually make the deal work for you based on the operations. And I think that's a really, really unique like strategy. And what is your advice on if you're a rookie investor going to buy your short term rental? Should you bank on that or should you wait until you get some experience under your belt before you're tying in that operational piece into your deal analysis?

[Garrett Brown]

I always tell people that are potential investors and things to analyze it from a short term rental side with the operations from day one. But then also make sure if you're newer to this and you're not 100% certain on a market or different things, or even if short term rentals are the strategy you want to go after, you want to make sure that it can also possibly work as a long term rental or even a midterm rental because you want a few different exit strategies. Especially when you're newer to this type of investing, there's a lot to it that you may not expect. And so if this is a strategy that's brand new to you, I think when you're looking at some of these type of deals, analyzing it from the midterm rental and the long term rental side is going to be extremely invaluable so that you can pivot if it's ever needed.

[Ashley Kerr]

That's a great point to have those exit strategies in place. And one thing I think that I want to make clear too is that when I say Garrett takes into that operational piece and how he can make the property unique, he's still looking at the numbers. He's just looking at the higher end because he's going to be able to get more. It's not that he's completely winging it and saying, oh my, you know, unique skill is worth $200 more a night. It's still looking at the numbers. But instead of taking, you know, what that median rent is or the average rent of the property, you know, he's going towards the higher end of the better performing properties because he knows he can get it there.

[Garrett Brown]

You know, like I said, this is projected about 74,000. I'm very confident that I can beat that number because there's proven comps within a, you know, a few block radius, four or five that are doing 90,0001-000001-10000. So that's how I have the confidence that I can get to there. But if you didn't see the comparables that are showing that your chances of just adding a few amenities and hitting that number start to dwindle down. So you just need to look at it from all, all perspectives and make sure there are comps that can support what you're, what you're planning on trying to do.

[Ashley Kerr]

Well, I wish I was as confident as Garrett that I could make this work as a long term rental. But looking over this deal, so the first thing I did, I went to the biggerpockets.com rentestimator and I put in the property address, I put in the bed bath cow and it's telling me the Median rent is $2,490 per month. Okay, on the low level 1200, to the high level 3200. So that's kind of a wide margin. But the majority, it kind of shows you the graph of where each of these places are very, very small amount are in that high 3200. Maybe if you went in and did an extensive rehab on this property you could get that to the high end. But then we're just adding more and more money that we need to put into this deal and refinance out of. So then I went and I did what would I estimate the mortgage payment to be. So I just did general 20% down, 30 year fix at a 6.63% rate, which honestly if you're going to use this for an investment property, it's probably going to be higher. But that came out to be $2,200 a month just for the principal and interest. And then taxes ended up being 378 per month, home insurance about 150. And that's just kind of going off an estimate. So this deal does not pencil out because already your monthly payments not including anything else besides taxes, insurance, principal and interest is going to be about 2,800. On the lower end you might have a higher interest rate that increases that or higher insurance because insurance rates are increasing. So I'm going to do thumbs down. No, this would not work as a long term rental.

[Garrett Brown]

I can agree with that. This is definitely a very, very, if you're a short term rental investor that has a little experience, it's a great market for you. Otherwise I think it's, there's, there's a better option coming in Deal three that I think might might be a little more appetizing for long term renters.

[Ashley Kerr]

Okay, well, we're heading across the country from Texas to the Pacific Northwest for Garrett's next deal. But first we must take a quick break. We'll be right back.

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[Ashley Kerr]

Okay Garrett, tell us about deal number two. We're in the Pacific Northwest right now. What area is this in?

[Garrett Brown]

So this is in Wheeler, Oregon market. I have never invested into the Pacific Northwest, but I've always just been completely enamored with the, the beauty of the, of nature they have out there, the amount of national parks, state parks and, and the, the vast amount of tourism they have that is driving out there. So this is a new market and area that I've been exploring some. They have a tremendous amount of tourism that comes in there. It's a three, two, it's about 1300 square feet. But one of the coolest thing and when you're thinking from a short term rentals perspective, which my brain always goes there, especially now that I'm have been doing this for so long. In the short term rental side, this has a really immaculate ocean view and mountain view. If there's a view, your chances of becoming a successful short term rental. When I say a view, like a spectacular view, this shoot through the roof and so this has that wow factor to me and it's in a great area that has very high occupancy and can achieve very high average daily rates. And there's even an opportunity that you might be able to maybe place a Tiny home unit or an ADU unit on side of it. You know, looking into the permitting and what the deed restrictions are in that area, it's. It's going for about 339,000. It's been on the market for a little bit, so you never know. There might be some wiggle room there. It's projected to have revenue of about $65,000 ann per year. The occupancy rates are pretty good. They're about 55% according to Air DNA. The average daily rate's pretty good. It's about $330 according to Air DNA as well. The cash on cash projection for this property is not significantly high. Just using the baseline numbers from air DNA. It's about 4%. And I'm not as confident as I am with the Fredericksburg market by looking at some of the comparables that I can add some amenities, do some extra things to get it to, you know, maybe 100,000 a year like I was in the Fredericksburg market because the nearby comparables are making about the same that Air DNA already projected. It's one of those things where you could add a hot tub, I'm sure, and probably get your amenities and occupancy up. My goal would be to get it to 12% cash on cash return, but I'm not as confident in this market based on what I'm seeing with the comparables nearby. So if we're able to negotiate the property price down and maybe get some seller credits, then I might be able to help, you know, the, the cash on cash return. But those don't move the needle too much in short term rentals. Getting your occupancy up and your average daily rate is really how you maximize your cash on cash return specifically for short term rentals. And I'm not as confident in this area now. So I've been looking at this deal just because the view and being able to probably be the highest performing in the market. But I'm a little worried that I'll still ne never be able to hit the exact revenue goals that I'm hoping for. What it takes with the oper side too of, of hospitality and short term rentals. What are you kind of seeing from what you're. You're looking into on the long term side and everything else.

[Ashley Kerr]

Yeah, so the first thing about the like negotiation piece, if you have a great agent, is it's already been on the market for 58 days. So maybe there is a little wiggle room there. But I did the same thing I did the Last one, I put it into the rent estimator. It's at eleven hundred dollars per a month. On the low end, 796. And then kind of on the high end was, was 1300. And then it was very weird. But there was two properties that were actually getting over 3000amonth. So those, I don't know if they were listed as like fully furnished or what, but that I think kind of skewed the data a little bit. So we're gonna take eleven hundred dollars per month for this property, then we're gonna go look at, you know, what the mortgage payment would be on this property. So I did kind of the same rules I did last time. The mortgage payment ended up being about $2,000 per month with property taxes and insurance included. So already this doesn't pencil out. You're looking at about, you know, a $900 deficit in cash flow every single month. But there was something that piqued my interest and could make this deal work. So in the listing it mentions that you could potentially divide the lot. It's a hundred by 100 lot lot. And, and you could build an additional structure. But what I think that you could do with this and go to the planning board, you'd ask for that, you know, the parcel to be divided, parceled off into its own separate piece. And I would sell that lot, especially as, as a long term rental. I don't need a big lot. You can maybe get a little bit more in rent. I mean this definitely is market dependent and I'd have to look into more of what, what people expect when they're renting. But like the bigger the lot, the more you have to maintain. As the landlord, even if you tell the, the residents their job to maintain, it doesn't mean they're always gonna, you know, trim the bushes, cut the grass, like do all these things to take care of a bigger lot. So I see the opportunity to parcel this lot and list it for sale, sell that, let somebody else build their own structure on that, but use the cash from that to offer offset some of the costs of this property. And that could bring your monthly payment down. And that could actually make the deal work too.

[Garrett Brown]

You also could combine strategies too. One, I have a property that one of my most successful ones is a piece of land that I divided some. And I have a long term rental on it and a short term rental and the long term rental tenant, which you have to find the right person. And you know, there's a myriad of things that come up. They actually help me run some of my short term rentals and they also rent from me for my for the long term rental and I give them a little bit of a discounted rate and we work out, you know, some payment things on like a 1099. But you also can mix strategies as well and possibly find something that can work for a little bit of both, especially if you're able to split the lot and and get added value on both sides. There's a myriad of ways within you know, real estate that you can be creative and make a deal, work to its highest and fullest potential and balance out the risk and rewards.

[Ashley Kerr]

Well, we have one more deal to share today which is at an even lower price point. It's well under 300,000. But first we're going to take our last break. We'll be right back in a few minutes.

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[Ashley Kerr]

Okay, welcome back from our short break. And we are here with Garrett who has brought us a couple deals today. And we're going to be talking about the third one now. So where is the third deal today, Garrett?

[Garrett Brown]

This is in Waco, Texas, which I'm not sure if we have any Chip and Joanna Gaines fans.

[Ashley Kerr]

I was just going to ask, is that that from.

[Garrett Brown]

Yes, that is absolutely. So it kind of blows my mind like and I'm a native Texan for a long time, like how popular Waco has become in the last, you know, maybe 10 years. And a lot of it is solely dedicated to Chip and Joanna Gaines. They have built like an amazing infrastructure out there. It's, you know, all. That's where all the Fixer upper episodes were filmed for most of them. So it's become a pretty popular destination because they've added, added a lot of other things too. They have some really cool tourist destination like these old silos that people go tour. There's a lot of, it's kind of hustling, bustling. It's near all the major metro hubs of Dallas, Austin and Houston. It's kind of like a midway point for all of them. So it's become a pretty popular short term rental market. But it also has a lot of real estate metrics overall that make it a great area in general from long term to midterm rentals. And I've had my eye in this area for a while. This property is a 3:2. It's about 1400 square feet. One thing I really like about this property is that it comes furnished. You spend a lot of money up front, you know when you're furnishing a short term rental. And I did a breakdown on bigger stays YouTube channel talking about how much it actually costs to start a short term rental business, one that you own. And one of the biggest price differences that comes in is when you have to furnish it yourself. Because if you get into a property that already has furniture, the cash you're having to put out immediately is almost cut in half sometimes depending on how the price point, something like this, it's going to be close to that. So it's listed at about 275. This is not a vacation destination only area. You know, like the other two that we kind of mentioned first, those were definitely more tourist vacation areas predominantly. This one has metrics all around. The occupancy is pretty good. It's about 52% according to Air DNA. The average daily rate is around $220. So they're a little bit on the lower end, but there's not much renovation that you need to put into it. There's not much furniture that you need to put into it. Maybe $10,000 each for both of them. The issue here that I want people to pay attention to for when you're getting into this type of market that may not fully be a vacation destination area is Waco has started to crack down on the amount of short term rentals that are able to get permits in the area. I was able to look at the city code, look at their short term rental restrictions and different compliances they put together. They're usually available online. A simple Google search can at least find most of it. Just type in, you know, Waco short term rental regulations. This property sits on a street that you're able to do short term rentals on. So I'm looking at the competition nearby. There's a few of them that have gotten to 52,000. There's two of them that one does 60,000, another one does 65,000 gross revenue annually daily. So I at least know there's a little upside compared to what Air DNA is projecting at the 42,000. When I'm looking at a short term rental, I really want to see if the backyard has room for improvement. There's usually two reasons why people will book short term rentals over a hotel, especially in this type of area. If you have a really cool backyard that has the amenities that cannot be provided privately at a hotel and if you have a stellar kitchen, you know, that's the one thing I always tell people is, is your kitchen. You need to have all the utensils and it needs to be nice because this is one selling point versus somebody going book a hotel with their family is that you have the kitchen and backyard. If you look at the cash on cash return for this type of project though, it is, it is definitely nothing that I would personally want to get into for this exact property from a short term rental side because even with the furniture in it and not having to spend much on it, you're going to be looking at Probably a negative 15% cash on cash return, which immediately turns you off. And I, my brain was like, okay, maybe I can get to that, you know, 60 to $65,000 annually that a few properties are doing nearby as well. But even if I got close to what they were doing, I'm still probably at around a 4 or 5% cash on cash return. So I started to pivot and think like, okay, if I was going to really go into this deal because I do love the Waco market and I think this is a great property for you know, numerous different reasons. This would be one that I might possibly look into the midterm rental side side because there's a lot of hospitals over there. You know, between all of the chip and Joanna Gaines dynamics that they're bringing in over there, there's actually a pretty high influx of midterm renters going into this market looking for furnished properties. And I think that I could probably cash flow as a midterm rental which is a lot less on the operation side than it is a short term rental. Something in the, you know, maybe this is just cash flow. After you know, mortgage and other things are taken out, we probably could get get in between 3 to 4,000 per month. And so I'm sure you probably have been analyzing to see what it looks like as a long term rental. So I'd be curious what your thoughts are between some of the different, you know, short term midterm rental ideas I had or if you think this is maybe a better long term rental play.

[Ashley Kerr]

Yeah, I actually after you mentioned the midterm rental I went to Furnish Finder and I looked in here what it would be and it looks like just for a two bedroom is going for around 2,200 per a month month. So I think you could get a very decent rate with a three bedroom here for a midterm rental. On the long term rental side I went again to the the rent estimator. It, it says about 1600 per month but it's pretty like confident in its score. Like it's showing that there's quite a few properties that are in that kind of realm. There's one that's like price super high at 2300 and then the lowest is about 1100. When you go to kind of the monthly payment on this property you're looking about $2,100. So you know just comparing those two numbers, they don't work. But I did see in the listing that it is located near a university. So maybe there is that option for midterm rental. You know if you have adjunct professors coming in or something like that. But I did think too that, that I believe that 2025 the hottest strategy is co living. You know short term rentals were for a while glamping was midterm rentals were and I think this is the year that co living. So this is a pretty nice property. One thing that I would have liked to see is this kind of has an open floor plan where there's a huge opportunity to take a single family home and turn like if it has a separate, separate dining room, turn the dining room into another bedroom.

[Garrett Brown]

Yep. I didn't even mention that Waco is, you know, home of Baylor University, which is a major university within Texas. So the midterm rental market and co living, like, I think those could be great, you know, options to explore in this. And it's been on the market for a good bit too as well. So this is another one working with a highly qualified agent through, you know, the bigger pockets agent finder, you will probably have a lot of leverage to work on that negotiation, the purchase price or do seller credits, you know, and so there's a lot of options when something has been stale for a little bit and you know, coming furnished is actually might work in your favor because that might not be as appealing to other people looking to properly buy this property.

[Ashley Kerr]

Yeah, 245 days, yeah. Spent on market. Like doesn't that automatically make you think like what's wrong? And it could be nothing. It could be nothing wrong with it.

[Garrett Brown]

You'll be shocked sometimes like I make, make, you know, luckily I'm an agent and so I can always make offers on properties I like and not feel bad of making my age, like oh, make low ball efforts, you know, but you'll be shocked at some of the offers I'll put out there sometimes and they'll entertain it. Like maybe they're finally getting to that point now where they're like, all right, I'm at my wits end. Like let's, let's see if somebody has a deal for me. So there's nothing wrong with working with a good agent, setting that standard with them and telling them like I'm going to buy something. I might, might lowball a few like, you know, don't hate me for that. And you know, most agents, if they're an investor friendly agent that like the ones that come from bigger pockets agent finder, they're going to fully understand that strategy and also help you really understand that market, you know, list prices are just a suggestion. So yeah, you know, you, you give your suggestion for what you think it's worth and stick to your numbers. If you have a number, once you do your deal analysis that you're like, I like this property, but I would only buy it at 235. Don't get emotional, don't go above that, you know, and, and go to the next one and get your repetitions in and this will start to slowly work your investing memory muscle. And then you'll eventually be able to knock a few of those deals out the park, and a few of them will start going your way. It's It's a numbers game.

[Ashley Kerr]

Sometimes you'll be way more emotional with a property when it performs really well and cash flows great than if you just liked it when you walked through for the showing.

[Garrett Brown]

Yep.

[Dave Meyer]

Yep.

[Garrett Brown]

Absolutely. You'll be way more emotional if you buy the wrong deal. So that's why I stick stick to your numbers. Yeah.

[Ashley Kerr]

Well, Garrett, thank you so much for bringing those deals on today and for sharing with us. Thanks to everyone for listening to the show today. I'll see you over on the Real Estate Rookie Channel and you can find Garrett on his new channel, bigger stays on YouTube. Dave Meyer will be back soon with another episode of the Bigger Pockets Real Estate Podcast in a few days. Thanks for watching.

[Dave Meyer]

Thank you all for listening to the Bigger Pockets Real Estate Podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. Copywriting is by Calico, Content and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. the content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk, so use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose and REM past performance is not indicative of future results. BiggerPockets LLC disclaims all liability for direct, indirect, consequential or other damages arising from a reliance on information presented in this podcast.