BiggerPockets Real Estate Podcast Episode Summary
Title: Investor Who Timed Market (3 Times!) Says Now May Be Bottom
Host: Dave Meyer
Guest: Brian Burke
Release Date: June 27, 2025
Introduction
In this episode of the BiggerPockets Real Estate Podcast, Dave Meyer hosts seasoned real estate investor Brian Burke to discuss the current state of the housing market and provide actionable strategies for investors navigating a potential market correction. With home prices anticipated to dip slightly, the conversation delves into optimal investment tactics, risk mitigation, and the nuanced art of market timing.
Current Real Estate Market Overview
Dave Meyer opens the discussion by highlighting the emerging trend of decreasing home prices across various regions in the United States. According to forecasts from Zillow, Redfin, and other reputable sources, a 1% year-over-year decline in home prices is expected in the latter half of 2025.
Key Points:
- Market Shift: Transition from a consistent price appreciation since 2012 to a mild correction.
- Opportunity Window: Investors who have been waiting for price drops may find favorable conditions approaching.
Notable Quote:
"Home prices are dropping in many parts of the country... there are going to be big opportunities to buy investment properties,"
— Dave Meyer [00:00]
Investment Strategies in a Market Correction
Brian Burke shares his philosophy on investing during market downturns. He emphasizes the importance of purchasing properties as the market is bottoming out rather than anticipating the very bottom, which can be elusive and risky.
Key Strategies:
- Long-Term Horizon: Focus on properties that offer sustainable cash flow, ensuring investors aren't reliant on the market solely for returns.
- Value Addition: Seek properties below market value that can be improved to enhance their worth.
- Tax Optimization: Utilize tax strategies to maximize returns in a fluctuating market.
Notable Quotes:
"If you're investing your own money and you have a long term horizon... buying at a lower basis is always a good thing,"
— Brian Burke [02:07]
"You have to buy stuff at kind of a discount to market value,"
— Brian Burke [02:55]
Risk Mitigation Tactics
Both Dave and Brian stress the importance of cash flow and value add as pillars of a robust investment strategy. They caution against "catching a falling knife," advising investors to ensure that any acquisition can remain profitable even if the market continues to decline slightly.
Key Points:
- True Cash Flow: Incorporate all expenses, including maintenance and repairs, to ensure positive cash flow.
- Value Add Opportunities: Actively enhance property value through renovations or improvements to drive appreciation independently of market trends.
Notable Quote:
"It has to be real cash flow where you're really not coming out of pocket,"
— Dave Meyer [04:53]
Market Timing and Positioning
Using a compelling water analogy, Brian Burke illustrates different market conditions and the importance of being strategically positioned to capitalize on favorable shifts.
Water Analogy:
- Appreciating Market: Like a body of water with a strong current, making it easy to move downstream.
- Stagnant Market: Comparable to a lake, requiring occasional effort to gain momentum.
- Upstream Market: Similar to paddling against a current, necessitating more significant effort.
Current Market Assessment:
- Mild Upstream Conditions: Brian categorizes the current market as mildly challenging but navigable with the right strategies.
Notable Quotes:
"You think about the real estate investing environment is like a body of water... and that's kind of what these markets are."
— Brian Burke [04:50]
"We are starting to see those deals far more today than I have in a year or two at least,"
— Dave Meyer [20:33]
Selling Strategies in a Correction
The discussion shifts to the nuanced decision of when to sell properties during a market correction. Brian emphasizes evaluating portfolio composition and investment goals to determine the best course of action.
Key Considerations:
- Return on Equity: Assess whether the property's return is meeting expectations; consider selling if returns are suboptimal.
- Portfolio Simplification: Offload high-maintenance properties to focus on more efficient investments.
- Arbitrage Opportunities: Harvest gains from appreciated properties to reinvest in undervalued assets.
Notable Quotes:
"If you have properties that you bought 20 years ago... your return on equity is probably extraordinarily low,"
— Brian Burke [29:52]
"If you have an asset that requires more time and effort, it's a good candidate for offloading,"
— Brian Burke [34:01]
Leveraging and Financing
Brian shares his insights on leveraging debt to maximize investment returns while mitigating risks. He advocates for 30-year fixed-rate mortgages as a cornerstone of financing rental properties.
Key Points:
- 30-Year Fixed-Rate Debt: Offers stability and is ideal for long-term investors.
- Refinancing Strategy: Transitioning to shorter-term loans (e.g., 15-year mortgages) to build equity faster and enhance cash flow for retirement.
- Leverage as a Double-Edged Sword: While it can amplify returns, excessive or inappropriate leverage can jeopardize investments.
Notable Quotes:
"I've always been a big believer on single family of doing 30 year fixed rate debt because it's the most incredible financing available,"
— Brian Burke [35:11]
"Leverage is a double edged sword... it can amplify your returns and give you some incredible results."
— Brian Burke [37:22]
Final Insights and Conclusion
Dave Meyer and Brian Burke conclude the episode by reiterating the importance of disciplined investment strategies, staying informed about market trends, and maintaining flexibility to adapt to changing conditions. They encourage investors to remain proactive, continuously seek out undervalued opportunities, and ensure their portfolios are resilient against market fluctuations.
Final Thoughts:
- Stay Informed: Continuously monitor market indicators and news to guide investment decisions.
- Be Disciplined: Avoid impulsive buys; focus on strategic, well-researched acquisitions.
- Long-Term Focus: Embrace a long-term perspective to weather market volatility and capitalize on future growth.
Notable Quote:
"This is a business that carries risk. And I will tell you, it is a lot easier to lose a million dollars than it is to make a million dollars."
— Brian Burke [39:29]
Conclusion
This episode provides a comprehensive examination of real estate investment strategies amidst a potential market correction. Brian Burke's experienced perspective, coupled with Dave Meyer's insightful questions, offers listeners valuable guidance on navigating the complexities of the current housing market. Emphasizing cash flow, value addition, strategic positioning, and disciplined selling, the podcast equips investors with the tools necessary to make informed and resilient investment decisions.
Listen to the Full Episode:
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