Podcast Summary: BiggerPockets Real Estate Podcast

Episode: 3 Types of Rentals That STILL Make You Rich

Date: December 31, 2025
Host: Dave Meyer
Guests: Henry Washington, Kathy Fecke, James Dainard

Episode Overview

This end-of-year episode revisits a fan-favorite roundtable discussion. Host Dave Meyer and his co-hosts from the "On the Market" podcast—Henry Washington, Kathy Fecke, and James Dainard—each share a real-world rental property deal they closed in 2025, spanning various investment strategies and price points. The episode explores how investors can succeed with rentals in today’s diverse and challenging real estate market, whether starting with $55,000 in Arkansas, $214,000 for new construction in Texas, or executing creative multi-exit deals at the $600,000 range in Seattle.

Key Discussion Points & Insights

1. Henry Washington’s Spider-Filled Lake House Renovation (00:55–11:14)

• Property Overview:
  • Location: Across from a lake in Arkansas
  • Purchase Price: $55,000
  • Needed Renovation: $90,000
  • ARV: $265,000–$285,000
  • Rental Potential: $1,800/mo long term, est. $3,000/mo short-term
• Investment Strategy:
  • Heavy rehab of the “second nastiest house” he’s ever seen, filled with spiders and rotten floors.
  • Converted a 3 bed/1.5 bath into a full 3 bed/2 bath.
  • Multiple exit strategies: flip, long-term rent, or short-term rent (personal use as vacation home).
• Unique Element:
  • Plans to install a golf simulator for both personal enjoyment and as a draw for renters.
• Financing:
  • Used hard money to cover nearly 100%, including the renovation, with only $5,000 down. Plans to refinance into a DSCR (Debt Service Coverage Ratio) 30-year fixed loan after rehab.
• Real-World Relatability:
  • Emphasized the importance of relentless deal-finding and flexibility in lower-cost markets.
  • “I am not saying it’s easy. I am saying it’s repeatable.” (Henry, 09:09)
• Controlled Risk:
  • Cautions that controlling costs is crucial—novices could easily spend $125k–$150k on similar rehabs, but still likely stay profitable due to high ARV.

Notable Quotes

• “Who wants to buy a house where you’re going to fall down and get killed by spiders within the first 30 seconds? It’s realistic though, Henry.” — Kathy Fecke (04:00)
• “There are markets like this all over the country where you can buy houses for a reasonable price point and you can figure out a way to monetize them.” — Henry Washington (09:09)
• [On the process] “There’s a level of consistently looking for opportunities and then when we find one, we’re able to capitalize on.” — Henry (09:23)

2. Kathy Fecke’s Turnkey New Construction Rental for Busy Professionals (15:53–22:06)

• Property Overview:
  • Location: North Dallas suburbs (near McKinney)
  • Purchase Price: $214,000 (well below median of $395,000)
  • New construction 3 bed, 2.5 bath
  • Rent Potential: $1,825/mo
• Investment Strategy:
  • Assisted her daughter in leveraging a HELOC (home equity line of credit) to buy her first investment property.
  • Purchase of a brand-new home in a rapidly growing suburb with strong job and population growth.
  • Negotiated builder concessions, specifically rate buydowns under 6%.
  • Targeted for investors in high-cost coastal markets who want a low-maintenance, growth-oriented rental.
• Market Analysis:
  • Emphasized the importance of understanding micro-markets and “the path of progress” — targeting affordable areas with incoming businesses and strong demographics vs. macro fears about Dallas market inventory levels.
  • “The city is very different than the suburbs. You’ve got to know where the growth is headed.” (Kathy, 18:14)
• Low Maintenance, High Predictability:
  • Compared the lower cashflow/maintenance risk to buying a new car—lower immediate income than a heavy value-add, but greatly reduced hassle and vacancy risk.
• Long-Term Play:
  • Strong appreciation and tenant stability anticipated.
  • Kathy and her daughter are both buying properties in the same development due to the numbers.

Notable Quotes

• “How do you try to buy an old house and fix it up? It’s really hard. So an alternative is to buy a new house that doesn’t need any work and that still cash flows… for busy professionals.” — Kathy Fecke (16:25)
• “You’re buying below replacement cost. And that’s what I really do love about that deal.” — James Dainard (20:04)
• “That is almost a no-brainer if you’re…at $214,000, $1,825 rent, in a market that’s going to appreciate.” — Henry Washington (21:02)

3. James Dainard’s Creative Urban Land Deal with Multi-Exit Potential (26:13–33:34)

• Property Overview:
  • Location: Central District, Seattle
  • Purchase Price: $600,000 (cheap for Seattle)
  • Existing: 2 bed, 1 bath house on 4,000 sqft lot
  • Renovation Budget: $120k–$135k for front house
  • ARV: Front house $899,000; Back lot new build sale est. $1.2M
• Investment Strategy:
  • Identified underpriced lot with valuable zoning (LR3)—allows for “row house” in backyard.
  • Plan: Rehab original house, sell it, and effectively secure the subdivided back lot “for free,” then build a new house and sell, or refi and keep as a rental/flip to a fourplex using a 1031 exchange.
  • Multiple exit routes: Flip front, develop back, sell lot if construction costs spike, or hold for cashflow.
  • Emphasizes the importance of creative deal structuring and professional due diligence—worked with architect and surveyor, stress-tested the value if backyard parking couldn’t be secured.
• Navigating High-Cost Markets:
  • “In expensive markets…this is how you do it. You have to get creative to come up with cash flow…” (James, 26:22)
  • Process required multiple feasibility studies, deal redesigns, and persistence (“Said no to this deal three times before finding the right angle.”)
• Key Lessons:
  • Allows collecting rent from the front house during permitting/building.
  • This model is transferable to other urban markets with high land values and permitting for accessory dwelling units (ADUs).

Notable Quotes

• “They only make so much land and I’m getting the land for almost free on this one.” — James Dainard (26:56)
• “It’s all about that plan and how you lay it out. And just because you can build in the back doesn’t mean you should…This is not guessing. This is all done in our feasibility when we bought the property.” — James (31:50)
• “I love a no-man’s-land deal when everyone doesn’t want it…How can we make this work?” — James (31:57)

Panel Reflections & Takeaways (33:34–36:16)

Mutual Votes for "Best Deal" (34:03–36:16)

• Everyone sides with another’s deal, reflecting different preferences:
  • James votes for Henry: “I love a massive fixer. Cheap, high equity growth. Straight over tackle reno.”
  • Kathy votes for James: “I love opportunities like that, multiple exits, and all the options you could do with it.”
  • Henry votes for Kathy: “We have to remember that real estate is a long-term wealth game…those are the legacy properties.” (35:27)
• Dave Meyer breaks the tie:
  • Picks Henry’s deal, swayed by the golf simulator, but admits Kathy’s new construction is usually his style.
• Big Picture Emphasis:
  • The strategies showcased are applicable for various markets, wealth levels, and lifestyles. The episode demonstrates the importance of adaptability, creativity, and knowing one’s market.

Memorable Quotes & Moments w/ Timestamps

• On the Lake House’s Condition:
  • “It’s arguably the second nastiest house I’ve ever bought. It was so riddled with brown recluse spiders and webs.” — Henry (02:55)
• On Building Wealth in Any Market:
  • “You can make real estate investing work for you in almost any market at almost any price point.” — Dave Meyer (00:33)
• On New Construction Rentals:
  • “You’re going to have equity and appreciation plus the tax benefits on a property like this. This is almost a no-brainer.” — Henry (21:02)
• On Creative Urban Deals:
  • “You have to look at creative ways in expensive markets…in Seattle, it’s expensive, so the reason I love my deal is because they only make so much land and I'm getting the land for almost free on this one.” — James (26:22)

Important Timestamps

• Henry’s Deal Deep Dive: 02:55–11:14
• Kathy’s New Construction Buy: 15:53–22:06
• James’s Urban Land Play: 26:13–33:34
• Panel Reflections & ‘Vote’: 34:03–36:16

Conclusion & Listener Takeaways

This episode demonstrates that successful rental investing isn’t one-size-fits-all. From fixer-uppers and strategic urban plays to low-stress turnkey builds in growth markets, smart investors tailor their approach to their resources, market, and goals. The panel’s banter and candid insights make it clear: whether you want sweat equity, passive appreciation, or creative development, there’s still opportunity in real estate—if you’re willing to work for it and think flexibly.

Episode Recap by BiggerPockets Real Estate Podcast Summarizer