Dave Meyer (0:00)

You can get into real estate at almost any age and still pursue and achieve financial freedom. Do you feel like it's too late to start investing in real estate? It's not. And today I'm sharing my Late Starter's Guide to Real Estate Investing. So whether you're 30, 40, or even 50, investing in real estate today will likely improve your financial situation and allow you to retire early. If you have a stable career or already own a home, you even have some advantages over the 20 year olds you see on social media showing off their massive portfolios. On this show, I'll explain how to maximize the benefits of starting later, and I'll share the exact strategy I think works the best for anyone starting in this age range. Hey everyone, it's Dave Meyer, head of real estate investing at BiggerPockets. I've been investing now for 15 years, and on this show we teach you to pursue financial freedom through real estate. One of the questions I get most as a real estate investor and a real estate investing educator is, is it too late for me to start? And I can tell you right here at the top of this episode that the answer is definitely no. You can absolutely and should get started in real estate investing because there are just so many benefits regardless of when you start. But there are real good reasons why this question about whether it's too late to start come up. First and foremost is just social media. You probably see this all the time. You see these really young people seeing incredible success. They might be exaggerating or straight up fabricating that success, but nevertheless, we see it all the time. And then the second reason is that the benefits of compound interest are real. The longer you are in the real estate market, the better. But even though that is true, it is still better for you to start today than not get started at all. And that's what we're gonna talk about in today's episod. In order to address this question, we do need to also answer what starting late means in the first place, because I've had people who are 25 years old ask me if it's too late to start, which is kind of crazy. But I've also had people who are 60 years old ask me that question. And the span of what people think is the right time to start or too late to start is really, really broad. So for the purposes of this episode, I think we sort of need to hone in on an age as an example. And I'm going to use the age 40 for the example, not for any real reason, but I just figured sort of quote unquote, midlife would be the most relevant example. But the lessons and the strategies I'm going to talk about today will really apply to anyone who is starting from basically their late 20s up until their 60s. So with that, here it is, the Late Starter's guide to investing in Real Estate. So we're going to walk step by step how someone who's again as our example, 40 years old should start investing in real estate. And one more time just want to re emphasize that if you're 35 or 45 or 30, these are probably the same things. I'm just going to be using the example of a 40 year old. So what then is the first step in the Late Starter's guide? It is setting your goal. And I know if you listen to the show, you're probably like, you say that for everyone, whether they're 20 or 40 or 60. And, and that's exactly the point. Setting your goal and figuring out your strategy is always the first step. I wrote an entire book called Start with Strategy to emphasize this point and help people set their goals. Because I really genuinely believe that is the most important thing that you get started. So we know that we gotta set our goals. But what is a good goal and what is a realistic goal? Because if you just pick something outta the hat, you might say, I want to retire in three years. Sure, most people do, but that is not really a realistic goal regardless of when you're starting. Now I have done the math repeatedly and what I've shown is that almost regardless of what your current income is or where you're starting, if you dedicate yourself to real estate investing for 10 to 15 years, you can replace your income. I want to say that again because this is an amazing goal. This is what's so cool about real estate investing is if you start today at 4:40 when 10 to 15 years. So by age 50 or 55, you can absolutely replace your income and retire early. So that is the goal that I recommend most people anchor themselves to, is trying to create a sustainable, low risk, high probability strategy that is going to take you from where you are today, which can be zero rental properties and get you to full income replacement through, through real estate in the next 10 to 15 years. That is the goal that has always gotten me excited and hopefully that's getting you excited because it can cut your time from now to retirement in less than half. Even if you're starting at 40, that is 10 to 15 years less of work. If you start investing in real estate today. So if you agree with this goal, which I hope you do, because it's an exciting one, we can then move on to step two, which is to assess your resources. This is a big point I often make with people, and I wrote a whole lot about this in my book. It's called the resource triangle. It's basically this concept that every single deal and every single real estate portfolio needs three distinct resources to be successful. That's capital, otherwise known as money. You need to have money to purchase real estate, even if it's not your own. But you need some money. You need time, because real estate is not entirely passive. Regardless of what people say, you need to at least put some time into it. And you need skill because someone needs to operate your business with some degree of proficiency to actually make sure the things that you buy wind up producing money for you. And the cool thing about real estate is even though you need all three of these resources for every single deal, you don't need to bring all of them to the table. When I got started, I had time and I had a little bit of skill, but I didn't have any money. And I was able to trade my time and tiny bit of skill at that point for other people's money. Some people, particularly those who are starting a little bit later, might be in a different position. You may have saved up some money right now, and that means you can bring that to the table when you're figuring out how to grow your portfolio. And as I mentioned earlier in the show, a lot of people talk about the amazing benefits of getting started early. But most 22, 23 year olds that I know don't have any savings. And that's a disadvantage for starting really early. Whereas if you're 40, you may have some money that you can contribute. Even if you don't, that's fine. But I'm just saying this is one potential advantage of starting a little bit later. But regardless of what you have, this second step of assessing your resources is, is really important. You need to figure out what you're going to bring to the table. Because even if you have a lot of hustle, you can't create something out of nothing. You can't create a portfolio out of thin air. You need some resources that you can bring to the table. Whether it's capital, time or skill, you need some of that to make your dreams of a real estate portfolio of retiring early more realistic. So I recommend what you do is sit down and think through what you can bring to the table. Start with money look at a couple of different things. First, look at how much money you actually have saved up and that you can realistically contribute to real estate investing. Now, even if you have $50,000, let's call it 50 grand saved up, that's a lot of money that can absolutely get you started in real estate. But you may not want to invest that all into your portfolio. You may have kids or a family or people that rely on you. You might want to save some money for emergency funds. All of those are really important. So think through that and subtract those other funds that you have from your savings to figure out what you realistically and responsibly can put towards real estate investing. So maybe that's $40,000. That's great. That's a great place to start. Even if it's $10,000, just, just knowing that number and how much money you can contribute to your portfolio is going to be really, really beneficial to you. That's the first part of capital. The second part of capital that I think is really important for late starters is figuring out whether you want to stay in your job or not. And this is a really sort of controversial thing that always comes up in real estate. A lot of people want to prioritize quitting their job, which is totally fine. Some people choose to stay in their job longer. My recommendation for late starters is to really think through how you can maximize your current income. The sooner you can get more income in the door to invest into your portfolio, the better it is going to be for you. We talked about this a little bit earlier. That compound interest is a really important, powerful force. The more money you get to invest in the market sooner and it's just going to grow and grow and grow and help you achieve that retirement faster. And so when people ask me, should I quit my job to go into real estate, should I stay in my current job? My recommendation for late starters is which option is going to help you maximize that income short term? If you're in a high paying job that you can live with, that's not making you miserable, it doesn't even need to be your favorite. But if you are in a high paying job, that that's going to allow you to get loans and is going to give you excess money that you can save and then put towards your portfolio. If you want to retire early, I would do that. I know a lot of people want to retire right now, but remember, retiring in three to five years if you're just getting started is not super realistic. So prioritizing and Thinking sort of long term about how do I retire in 10 years. Maximizing your current income is going to be really important. There are some people though that are out there who are like, I hate my job, I literally can't stand it. That's a different story. Or I actually like my job or hate your job, whatever, but I just don't make a lot of money. Then those to me are then scenarios that you may want to consider going into real estate. If you think you can make more money as an agent or a loan officer or a property manager, go do that. You're going to get the benefit of learning the business and you're going to make more money. And you might get real estate tax professional status at the same time. Like, if you can make more money doing that, go do that. And if you would like it, right, you know, if you would like it, do that as well. So this is again the first sort of steps in assessing your resources. How much do you have saved up? And then how are you going to get money to pour back into your portfolio? So to make a decision for yourself, is that going to be staying in your current career or switching into one that can make you more income in the short term? All right, so that's the first assessment in the resource triangle. But we got to talk about time and skill. Super important audits you need to do to allocate your resources. But we got to take a quick break. Break. We'll be right back. This week's bigger news is brought to you by the Fundrise Flagship Fund. Invest in private market real estate with the Fundrise Flagship fund. Check out fundrise.com pockets to learn more. Do you know that feeling when you're about to leave the house and you pause to double check the locks? I used to get that feeling all the time until I got Simplisafe. Here's why I trust it. Most security systems only act after somebody's already inside. Simplisafe takes action before anything happens. Their AI powered cameras and agents keep an eye on things 24 7. If someone's hanging around your property, the agents can talk to them, activate spotlights and even call the police. All in real time. I've had peace of mind since day one. Setting it up is a breeze and I'm honestly not very handy. And it could be done in just under an hour. 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Backed by over $1 billion in assets under management, PPR has provided passive returns to thousands of investors since 2007. Don't miss out. Learn more today@biggerpockets.com PPRCAR that's biggerpockets.com PPRCAR so I tried explaining a sandwich lease to my insurance guy once and he just blinked at me like I made it up. And that's sort of the thing, right? Most insurance companies don't understand how we invest. You go vacant for a few weeks, you switch strategies, you hold stuff in an LLC and suddenly your coverage doesn't fit. That's why I recommend National Real Estate Insurance Group. They actually get real estate investors their coverage adjusts as your property changes and you one monthly bill for everything. No matter how weird your portfolio is. You can check them out@nreig.com bppod that's n R-E-I g.com bppod there's something surprising a lot of investors don't realize landlords actually file more insurance claims than homeowners. But most of the big traditional insurance companies, they're just not set up to handle those claims quickly or easily. That's why so many real estate investors are switching to steadily they focus exclusively on landlords. So whether you got a single family rental, need a builder's risk policy for a brrrr or focusing on growing your portfolio, you get fast quotes, flexible coverage, and protection for property damage, liability and loss of rental income. It's a good idea to review your rates and coverages every year on your rentals. So go get a quote in minutes@biggerpockets.com landlord insurance today steadily Landlord Insurance for the Modern Investor welcome Back to the BiggerPockets podcast we're here talking about the late starter's guide to getting into real estate. Our goal here is to help, on average, someone who's about 40 years old, give or take 10 years, retire in 10 to 15 years using real estate, which is entirely possible. The first thing I told everyone to do is to set that goal. The second thing is to do a resource audit and figure out what you can bring to the table to build your portfolio. The first step was assessing finances, but we have two more to go. We got to talk about time and we have to talk about skill. Time, I think is one of the most overlooked elements of building a portfolio for real estate investors, especially when you're first getting started. Because in reality there's this big spectrum of how much time it takes to own and operate a real estate investing business. You could be house hacking and self managing everything, you could be flipping properties and that's super time consuming. And for some people, that might work. On the other end of the spectrum, maybe you're super wealthy and you just want to invest in syndications, or you want to split the difference and you buy duplexes and hire someone else to manage them. All of them work. It really just depends on your own personal resources. If you're someone who's going to prioritize a high paying job that maybe takes 40 or 50 hours a week, you might not want to be self managing every property because you're going to burn out and that's really tough. So maybe you lean towards the more passive end of the real estate investing spectrum where you hire a third party property manager. Maybe instead you work a job that you're okay with that has flexible time and you work 35 hours a week and you have 5 to 10 hours a week to manage your own property and that will increase your cash flow. You should do that again. The whole idea of this resource assessment is to just figure out what's realistic for you and your lifestyle. And as a late starter, you may have a family, you may have responsibilities, and it's really important to think about what time you can sustainably put into your portfolio. Because one of the worst things you can do is get into real estate, take on deals that are super time consuming and not be able to put the requisite time to make those things successful. You're either going to burn out or you're going to fail. And that's worse than just hiring a property manager. Like if you hire a property manager, you could just make these successful and sustainable over the 10 to 15 years that you need to make this sustainable for in order to realistically retire. So that's the second thing. And the third thing is your skill set. This again, another thing people overlook. But it takes a variety of skills to be a successful real estate investor. And figuring out what you're good at and what you're bad at, what you're going to hire for, what you're going to do yourself is another really important part of building your portfolio. As an example, I'm good at data analysis. I like analyzing deals, I like analyzing markets. I'm not very handy. So I outsource a lot of my property management, all of my repairs and maintenance. I outsource my billing and my CPA work because I'm not good at that either. And again, could I realistically do this all myself? Sure. Am I going to do that? Well, no. And as someone who is, I'm not 40 yet, but I'm getting pretty close. I have other priorities and things in my life and I don't want to spend all of my time working on real estate. So just thinking through the things that you like doing that you think you're gonna be good at versus the ones that you would rather hire out is going to help you. Every successful investor I know hires out at least some of the skills and stuff that you need to successfully run a portfolio. This is not copping out, it is not cheating, it is not being lazy. It's just smart business. This, like, this is just what you gotta do. And so take some time to think through this. This is the resource audit, thinking through how much money you have, how much time and how much skill you have. That is step two in your late starter's guide and brings us to step three, which is mapping out your strategy. Strategy, the definition of it is a plan to achieve a goal. And we know our goal right now. And so the strategy that we need at this point in our plan for Late Start is to figure out like, how am I actually going to get from here today to the goal that I have of replacing my income in 10 to 15 years? And that might involve rentals, that might involve short term rentals, but at this point I really think you need to kind of go a little bit higher level. And of course every person is going to have their own approach to this. But because you're listening here and I'm giving you a guide, I'm just going to tell you what I think is the highest probability strategy for trying to retire starting at age 40 in 10 to 15 years. Here are my strategies. Number one, I already told you this one, maximize your current income however you can, whether that's staying in your current job, working a side hustle, going into real estate. Get as much money as you can to put into your portfolio as quickly as can. That's the best strategy. Second, focus on building equity for the next seven to 10 years so you can build your net worth as quickly as possible. And this means not focusing as much on cash flow. I'll explain that in a minute. But I think the real focus when you are getting started and trying to scale up is get that net worth, your investable assets, the total amount of equity you have. Grow that as quickly as you can. That can be passive, that can be active, that can be flipping, that can be brrr. However you want to do it. The strategy behind it is to grow your net worth in equity as much as you can as soon as possible. The third part of the strategy is once you reach an appropriate amount of equity, which may be $2 million for some people, it might be $1 million for other people. But once you figure out how much money you need and how much equity you need to achieve that, then you shift to a cash flow focus. This can be in year seven, it can be year eight and year nine, but that's it. That's my plan for retirement. Maximize your current employment, spend the first 2/3 of your growth stage building equity, and then the last third of your growth stage, shifting from an equity focus to a cash flow focus. That's it. Then you retire. I don't often prescribe strategies to people, but I really like this one. So. So for the purpose of this episode, I'm going to assume you like this one too, and we're going to use it. And I'll share an example of you so you all understand sort of what I'm talking about, maximizing income and also the shift from equity to cash flow over time. I'll explain that all in an example as we keep going. Okay, so let's just talk about goals and sort of working backwards towards, once you have this strategy, how this might actually play out for you. So when we talk about goals and doing this resource audit, one of the things that you should do at this point when you're building out your strategy is figuring out what income replacement means to you and what retirement actually means to you. Do you need $10,000 a month? Do you need $5,000 a month? Do you Need $20,000 a month? That's going to vary a lot per person. But the cool thing about real estate Is that if you figure out what amount of money that you want, you can pretty easily work backwards and figure out one, how much cash flow that you're going to need monthly from your rental properties. But two, how much equity that you're going to need to actually generate that cash flow. And this is a super important concept that I really want everyone to think about here. Cash flow is really a function of two things. How much money you have invested into your portfolio and the rate of return that, that you earn on that portfolio. Just as an example, if you had $1 million invested into your portfolio and you earned a rate of return, like a cash on cash return of 10%, you can know that you're going to have $100,000 per year. That's amazing, right? On the contrary, if you only have, let's say $400,000 invested into your portfolio, which is still a lot of money, and you have that same 10% rate of return, you, you're only going to be earning $40,000 a year. And I don't know your personal lifestyle, but I would imagine you can all see that earning $40,000 a year from your rental portfolio versus $100,000 a year in your portfolio is pretty different. And although conditions change and the rate of return that you can earn will change based on where you live, how good of an investor you are, what's going on in the macroeconomic environment, the rate of return doesn't change all that much. You know, on the low end, you might be getting 5% cash on cash return. On the high end, if you're crushing it and doing value add, you might be getting a 15%. So that is a pretty big range. But I think for the average investor, for who's just getting started, you need to assume that you're probably going to be getting a cash on cash return, let's call it of 8%. Let's say you average an 8% cash on cash return. So if you spend the next 10 to 15 to 20 years putting all the money that you have into your investment property, and you wind up building up enough equity, let's call it $250,000 of equity, that's an amazing amount of money, right? You have an 8% cash on cash return, pretty good cash on cash return, your cash flow at that point is $20,000. Nothing to sneeze at, but probably not retiring off $20,000. Even if you got that cash on cash return, let's just say you had a fantastic cash on cash return and you got it up to 15%. That's great. That's a really high cash on cash return. At that point, you're doing better, but you're still only earning $37,500 per year in cash flow. That's a big difference. But again, it's probably not that retirement number that most people want. Instead of focusing on getting our cash on cash return from 8% to 15%, if we spent the majority of our growth period of our portfolio building trying to build equity, instead, let's say we had a million dollars in equity at the end of seven years, which may sound like a crazy high number at this point, but trust me, if you commit yourself to real estate investing, that is an achievable goal. So if you say you have a million dollars of equity invested and then you go back to that lower rate of return of 0.08, you would actually be earning $80,000 a year. Now that is getting pretty darn close, I think, to almost everyone's retirement number. That is actually higher than the median household income in the United States right now. And of course, I'm pulling numbers out of thin air. But what I'm trying to illustrate here is that what's going to matter to your retirement more is how much equity you build up in the first few years, not how much cash flow you're earning in the next few years. If you can build 500 or a million or a million and a half dollars of equity in the next seven or eight years, taking that equity and generating cash flow from it is actually going to come easy. You could buy properties for cash, you could buy it for low leverage, you could do all sorts of things. Having that equity to invest at the highest rate of return close to the date when you actually want to retire. That's what's going to empower your retirement for sure. Almost every real estate investor I know has this realization that focusing on cash flow in the first few years is, is not that important. What you need to do is maximize your equity and then focus on cash flow later. So again, this is why I'm proposing this strategy. Again, three part strategy. Number one, maximize your current income however you can, because that's going to help you invest and build up that equity. Number two, focus on deals that will help you build equity in the next 10 years, seven years, whatever it is, as quickly as possible. And then three, when you're getting close to the date where you actually want to retire, shift to a cash flow focus. And that's it. That's the high level strategy. This is what I would recommend to most people. This is what I do myself over the last 15 years of my own investing career, I have focused majority of my time and effort on building equity. And you could do that through tons of different deal types. You can do it through rental properties, you can do it through the BRRRR method, you could do it through house hacking, you could do it through flipping. But it does represent a difference between going out and just buying the highest cash flowing deal right away. There is a inherent trade off in real estate. Some of the properties that cash flow the most are probably not going to have the same amount of appreciation, especially if you're not doing a heavy renovation. If you do a renovation you can get both which if you can do both, absolutely do that. But as a newbie, what I would recommend to you, if you want a retirement in that 10 to 15 years, is to pick the deals that are going to give you those big pops of equity and prioritize that more than generating the maximum amount of cash flow in the short term. So that's my strategy. I'm giving you all the strategy that I use and I recommend to pretty much everyone. But I want to hammer home this point a little more with a more specific example and just share with you the numbers behind how this can actually work. Because I actually built an entire calculator that can show to you and prove to you that that this really does work. I'm going to walk you through it right after this break. Want to earn passive income every month without the hassle of property management? If you're an accredited or high net worth investor, PBR Capital Management offers a proven solution. Since 2007, PPR has helped nearly 2,000 investors earn over $100 million in consistent predictable passive returns. Headquartered just outside Philadelphia, PPR manages a $1.1 billion diversified portfolio designed to provide steady income and long term growth. With decades of in house expertise, their team strategically mitigates risk to help investors achieve their financial goals. See how a PPR fund could fit into your portfolio? 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So go get a quote in minutes@biggerpockets.com landlord insurance today steadily Rental Property Insurance for the Modern Investor Everyone. Welcome Back to the BiggerPockets podcast. We are talking through the Late Starters Guide to Real Estate Investing. Before the break, I shared with you my personal strategy and the one I recommend for any late start starters. As a reminder, it's basically maximize your current income, focus on equity in the short run and then turn to a more cash flow focus as you get closer to your retirement date. In this example I'm talking about a 40 year old who wants to retire. Let's call it 10 to 12 years. So I would say focusing on equity 7 to 8 ish years, trying to build up that net worth and then selling off assets or repositioning your money to more cash flowing assets for years 8 to 12. That's going to get you there. And I know that sounds overly simplistic, but it's honestly really not. I've done the math here and I can show you that this really works. I have this thing, it's called the Five Five Financial Independence Calculator. It's free on BiggerPockets. Go to BiggerPockets.com resources and download this for yourself and see the math for yourself. But I'm going to walk through the example that we're talking about. I actually googled what is the median income for a household at age 40 and it's about $85,000 per year. So I'm going to use that as my assumption here. So if I'm starting with $85,000 per year and I have $50,000 to invest up front now, not everyone might have 50 grand, that's fine. I honestly again just googled what is the median household savings for a 40 year old in the United States and it was about $50,000. So I'm just taking the average person in the United States making 85 grand has 50 grand saved up. If this person goes out and starts acquiring properties with the average property price of $250,000 and they do this as frequently as they can and the whole calculator will show you the math, but it's basically it does the math for you. How long is it going to take you to save up between properties? Is it going to take you three years, two years, one year? But basically trying to buy properties at that price as quickly as you can. This person would retire in 13 years. Think about that. Think about that actually for a second. This is the average person working an average job with an average amount of savings buying a totally average deal. This isn't some special off market deal. It's not some heavy value add. It's just following the strategy that I just laid out for you. They can retire in 13 years. Now if you're thinking 13 years is too long, fine. Go out and do a more advanced deal than I was talking about. Do a brrrr. Do a flip. Do a creative finance deal. If you can do one of those a year or you can sprinkle those in over the next six or seven years, you might be able to retire in 10 years, you might be able to Retire in eight years. Remember this 13 year number is the most bland, boring portfolio that you can possibly do. And it's still getting you retired in 13 years. So that is why at the beginning of the show I said when people ask is it too late to invest in real estate? No. If you have 13 years, if you're starting at 40, you could retire by 53. The average person in this country retires around 65, 66. So if you're starting at 40, YOU can essentially cut your time to retirement in half by just buying boring old rental properties. That's incredible. So that is why I'm so bullish on this strategy. If you want to check out the 5 calculator for yourself, you can get it for free. All you got to do is go to biggerpockets.com resources. There's a little section on there called Financial Freedom and Wealth Planning. If you go in there, there is a financial independence calculator. You can download that free. Free. Now that I've explained this and sort of just walked through how the math can work, I want to just leave you with a couple of tactical points here because we focus mostly on strategy here. But I want to talk about sort of the system that you need to be able to do this repeatedly because as I said, you're going to need to do this for somewhere between 10, 12, 15 years. So the things that you're going to need are first and foremost a market where you can buy at a rate that is affordable to you. So I picked 250,000 relatively randomly. Just I figured someone making 85 grand a year that is realistic for them to buy pretty frequently. So starting in the first year you would buy one deal, then two years later you would buy your second deal. Two years after that you would buy your third deal and then you'd buy every year after that. That's just kind of how the math works out. In the beginning it's going to take you longer to save, but as you have cash flow and you build up equity in your properties, you're going to be able to buy at an increasing pace. And so you need to be able to build a system to buy a property every two years and then every year after that. So what do you need? First and foremost, a market where you can buy at that affordable rate to you. For some people that might be in their backyard. For others it might be in other parts of the country. Figure that out. We have tons of resources on biggerpockets to help you. The second thing that you're going to need is to build a team. First and foremost you need an agent because you need deal flow. You need to be able to see all the deals in your neighborhood that are going well. And again, what I recommend to you is find an agent who could help you find, yes, cash flow. I always recommend people find deals that at least have break even cash flow. I should have said that earlier. When I say that you shouldn't focus primarily on cash flow. I still think if you're going to hold a property, it needs to be cash flow positive. It's just not the most important thing. You don't need to prioritize getting a 10% cash on cash return. If you get a 2% cash on cash return and build a lot of equity, to me that's better earlier in your career. So you need to find an agent who's going to be able to connect you with those kinds of deals that fit your strategy. Now every investor needs deal flow, but frankly with this approach, you don't need crazy deal flow. You don't do direct to seller marketing. You don't need to look at off market deals. You need to find a deal every two years and then starting in year six, you need to find a deal every year for the next four or five years. Right? That's pretty reasonable. So just find an agent who's going to be able to do that. We can connect you on biggerpockets for free. Biggerpockets.com agent if you want to be able to do that. The third thing is to be able to spot and close on deals where you can add value in a modest way. Right. Like I said, building equity is really important to this strategy. So you can't just go out and find deals that are perfect the way they are. You need to be able to add value. You don't need to flip houses, you don't need to break down walls, you don't need to do any of that. But find ways that you can build equity in your properties. For most people that's just going to be doing cosmetic rehabs. Can you fix a bathroom? Can you update a kitchen? Can you add a third bedroom to a two bedroom unit so you can increase your rent? Can you find a place that in a couple of years that you can add a dadu or an extra unit onto it? These are all upsides for the deals that you're buying today that are going to really help you over the lifetime of your hold on this property and is going to again help you build that equity. You can turn into cash flow in the future. So find those ways that you can add value. That's number three. Number four is to get traditional financing. You know, if you're going to go into real estate, this might be a little bit harder. But I recommend that people get fixed rate debt in almost every circumstance. A lot of people get ahead of themselves and start thinking about like, oh my God, I can only get 10 mortgages. Like how am I going to manage that when I get more than 10 mortgages? You may not need more than 10 mortgages. You may be able to buy five duplexes and retire. You may be able to buy three triplexes and retire. So don't get ahead of yourself. Focus on leveraging one of the best assets to any real estate investor which is long term fixed rate residential debt. It is an incredible asset to anyone, but especially to a late starter. If you want to find great deals and lock them up long term so you can retire, get fixed rate residential debt. So that is another part of the system that I highly recommend is finding a rate lender who you're going to be able to do this repeatedly with and that shouldn't be that hard. If you have a job and you have decent credit and you are buying at this kind of interval, that should not be a problem to you. But you need to build out that system. Last is you got to manage your deals well. People always say you make money in real estate when you buy. There's some truth to that. I think you make money in real estate when you operate well, because a property when you buy, that's when you get the potential to make money. But if you don't do it well, you are not going to be able to reap the rewards of that potential. And so think really hard about the best way to manage your property. If you live close to your properties and you have the time to it self manage, you're going to make more money. You save a lot of money not paying a property manager. Having your hands on the property every single day is going to give you just a better pulse on what's going on is going to allow you to, you know, just maximize the efficacy of every single deal that you buy. But if you're not going to do a good job of it, if you don't have time for it, if you live out of state, it's totally fine to get a third party property manager. I have third party property managers, but I was just saying all things being equal, if you want to make more cash flow up front, you might want to self manage. So that's it. Build a system like this. Find a market that works for you, get a great agent, find ways to add value, use traditional boring financing and find a great property manager. Like if you follow the strategy that I've been talking about about maximizing your income, investing for equity, then transitioning to cash flow, the rest is honestly really easy. I'm not talking about buying really complicated deals or doing anything unusual. All I'm saying is go out, find a great agent. Find a great lender and buy deals every couple of years as quickly as you can. And you could retire in 10 to 12 or 15 years. That is unbelievable. That's it. I know this might sound incredibly simple, but that's honestly what it is. This is exactly the approach I've used to achieve financial freedom through real estate. I've seen tons of other people do this and it still works. If you're 40, it works. If you're 35, it works. If you're 50, it works. @ almost any age, if you're willing to give 8, 10, 15 years, depending on how involved you are, somewhere between 8 and 15 years, you absolutely can retire. And I know that might sound like a lot, maybe 12 years sounds like a lot to you, but I assure you working for another 25 or 30 years is a lot harder. And I've done it. I've been investing for 15 years almost exactly now. And I got to tell you, it's been fun. I actually enjoyed it. It is not that hard. And yeah, I got started pretty young, that is true, but I also worked full time during that time. I put myself through grad school during that time. I managed, self managed all my properties. I dealt with all the other stuff that comes up in everyone's life. And I just want to show that, you know, even though I got started early, there were some advantage to that for sure. But there are disadvantages to that as well. I was pretty immature, I had very little money to start with and I couldn't scale as quickly as I wanted to. So remember that even if you're starting a little bit later, there are absolutely advantages. There are resources that you can bring to bear that younger people or people who started earlier may not have. Think hard about that. Think hard about the resources and the skills that you can bring to your portfolio. And I promise you, if you want to achieve this, if you're willing to be responsible for the outcome, you absolutely can do this. That's what I got for you guys today. That is our Late Starter's guide to investing in Real Estate. Hopefully this has been helpful to you. If you have any questions about this, please let me know. You can always find me on Bigger Pockets or on Instagram where I'm Hedata Deli. Thanks again for listening. We'll see you for another episode of the Biggerpockets podcast in just a couple of days. I'll see you then. Thank you all for listening to the Biggerpockets 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 remember 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.